Archive for the 'Finance' Category

Obama to Grow Government, Step Up Regulation Ahead of Election

By Caomhin

Liberals and Democrats know they are going to get clobbered at the polls by the people of our great nation for exploding the deficit, weakening our economy,  expanding government, and reducing our freedoms.  All signs point to the Democratic Party doubling down and ramming through even more bills that a are highly unpopular with the American people and further harming our nation.  I suppose from their perspective they have nothing to lose, they know they are going to lose the House this November, and will lose a number of Senate seats as well.  Rather than listen to what the people want, they will only listen to what they want yet again.  In doing so, we will suffer the repercussions.

Obama is planning to revive the Cap and Tax bill, which will have long term implications for businesses and individuals.  This bill is nothing more than a broad based tax increase.  The results of this bill will be more bureaucratic red tape, barriers to market entry, increases in production cost, increases in consumer taxes, more expensive gasoline, heating oil, natural gas, and other essential needs for Americans.  This bill will further the death grip that Obama Administration is attempting to put on our free market system when coupled with the health care bill and the other piece of legislation that he is pursuing, “financial reform.”

His “financial reform” bill is again, another attempt at a tax increase that will also allow for perpetual bailouts in the future.  Rather than listen to business leaders, member of the public, the GOP, and people from all walks of life, Obama is simply listening to liberals and hardened leftists for guidance on what types of reforms he will attempt to implement.  The changes he will seek will result in great harm to the American consumer, one in which fees and taxes will be passed directly on to banking and investment clients.  Liberals can pretend this will not be the case, but this is a lie, and they know it.

Obama recently mocked Tea Partiers by saying that he should be given credit for cutting taxes.  I suppose this is his lame attempt at humor.  Obama has raised scores of taxes thus far and he will continue to seek to expand the revenue and scope of the federal government.  We need a strong, fit, and efficient federal government for the good of the people, but Obama’s Administration has cast the government into a sea of debt, bloated the government, and harmed its efficiency, which of course, negatively impacts all Americans.  The Cap and Tax and “Financial Reform” bills are two more attempts by the Obama Administration to continue this trend, and unless we speak out and oppose these bills as they exist, we will continue to suffer well into the future for the action of self serving politicians with a penchant for power and control.


Obama is destroying the American Dollar

By Caomhin

I have long since argued that the economic policies employed by the Obama Administration are foolish, reckless, and dangerous.  There have been many signs foretelling of a highly weakened American economy in the long term in part of Obama’s policies.  I have also stated that the American economy will strengthen in spite of, not because of, Obama’s economic policies.

Obama has accelerated the accumulation of federal deficit to astronomic proportions and most experts are forecasting deficits as far into the future as they can model. The deficit increased by $220.9 billion in February, the shortest month of the year, which if you do the calculations works out to a loss of $91,311.722 per second.  This is alarming at best, truly a devastating number.

It now appears that the Canadian dollar is poised to overtake the American dollar in strength by year end.  I recall many articles in the past when, for a short period of time the Loonie had gained parity or surpassed our dollar, it was sign of just how dire our economy was doing, and I mean this in disrespect to our great neighbors to the North.  For the second time now in two years, the dollar will drop below the value of the Canadian dollar.

Since the Democrats took control of Congress, the economy has suffered greatly.  We are still in the midst of a depression (again, the media does not have the stones to call it as such).  President George W. Bush was hardly the most fiscally conservative president we have ever had, and there is no excuse for him or the GOP adding to the national debt when the GOP had control of Congress, but nearly all economists had agreed that the debts that were accumulating were at least sustainable.  Since the Democrats have seized both Congress and the Executive branch the debt level has become unsustainable and we are racing towards a crisis the likes we have never seen before.

Obama’s policies, his insane spending levels, his assault on the private sector, including the auto, financial, and health care industries, coupled with his lack of foresight and leadership are leading us into what could become a death spiral.  His radical left wing agenda is moving our nation towards insolvency.  It is our duty in November to hit the polls and take down the radical left wing congress in order to restore sanity to our nation.  This is not an excuse to simply vote in a member of the GOP who will not adhere to strong fiscal conservative philosophies or are lacking in leadership skills.  We must use the primaries in order to ensure that those who are given the opportunity to seek office will address these problems before it is too late.  The American people have already stood up and said “No More!” it is time for our leaders to do the same.

Democrats Gearing up to Increase the Debt Limit by $1.9 Trillion

By Caomhin

$1.9 Trillion.  In order to finish up the current fiscal year.  To avoid putting the United States in default.

Let this sink in:

Senate Democrats on Wednesday proposed allowing the federal government to borrow an additional $1.9 trillion to pay its bills, a record increase that would permit the national debt to reach $14.3 trillion.

The unpopular legislation is needed to allow the federal government to issue bonds to fund programs and prevent a first-time default on obligations.

Less than a decade ago, $1.9 trillion would have been enough to finance the operations and programs of the federal government for an entire year. Now, it’s only enough to make sure Democrats can avoid another vote before Election Day.

Democrats are fine with a national debt of $14.3 Trillion, at least until after the elections in November, when they will vote to increase the limit again.  They are looking to increase the debt $1.9 Trillion dollars over the next ten months.  It’s no secret that the liberals in Congress have many, many schemes that they are looking to unveil, all of which would accelerate the accumulation of debt.  This level of debt is unsustainable and, frankly, it is immoral of this Congress to continue to find ways to spend money, unveil new programs, and increase the size of government and foot every man, woman, and child in this nation, for untold generations, the bill for doing so.

The amount of money that the Obama Administration and the Liberal controlled Congress have spent is staggering, and from all indications, this is just a microcosm of what they are looking to do.  Not only have they demonstrated that they possess no restraint or self control, they have also demonstrated a complete and utter lack of common sense and decency.  The spin and the lies they have been perpetrating provide no cover from the truth, and as such, they must deal with the consequences of their actions.

It is imperative that spending be dramatically cut.  The crushing debt threatens to break the back of our economy and severely impacts each and every American.  There is no excuse for the amount of spending and complete and utter fiscal irresponsibility.  The madness must stop or we are literally facing a bankrupt nation and a myriad of troubles that could make our current situation look like economic times of the Roaring 20s.

Obama’s Bank Tax and Economic Failures

By Caomhin

Only an idiot would raise taxes during an economic downturn.  Obama is proposing to raise taxes during an economic downturn.  I guess the logical flow there is self evident.

Obama is seeking to impose new taxes on the financial industry for engaging in risky business, such as lending to consumers even when firms know the risk but are forced to do so by government regulation.  As we all know, people like Barney Frank refused to let anyone investigate Fannie or Freddie prior to the financial meltdown, which was a key component to the exposure that tax payers faced when TARP was enacted.  Government laws and regulations, such as the Community Reinvestment Act, signed into law by Jimmy Carter and approved by a liberal Congress, helped to create and exacerbate the financial crisis by lowering underwriting standards on lending.  As the government and elected officials provided cover for the bubble to grow, when it finally popped, they immediately tried to shift blame to the private marketplace, which in fact, would not have allowed the bubble to grow to point that it did, absent government interference.  Liberal backing media supported the government in shifting the blame onto financial firms and the free market despite overwhelming evidence to the contrary.

When the bubble forced, TARP was enacted to shore up the bottom line of financial firms, essentially to cover them from insolvency due to the number of bad loans that were issued, which were, in part, issued due to government regulations.  As you also know, many firms, have already paid back TARP funds with interest.  Some firms never wanted TARP funds in the first place but were forced to do so.  They have also paid these funds back.  Yes, there are firms out there who have yet to pay back the funds are are not back on solid footing as of yet, but Obama’s new tax scheme punishes all financial firms as well as consumers alike and must not be allowed to pass.

From Fox News:

The proposed 0.15 percent tax would last at least 10 years and generate about $90 billion over the decade, according to administration estimates. It would apply to about 50 of the nation’s biggest banks, those with more than $50 billion in assets, and include many institutions that accepted no money from the $700 financial industry bailout.

Fees and taxes, as history have taught us, are passed down to consumers as they increase the cost of operation.  If input costs are increased, we know then, that output costs are increased.  Economics is very clear on this lesson, both in theory and in practice.  At least part, if not all of these fees will be passed directly onto the consumer.  Obama is also seeking to “recoup” TARP funds from companies who didn’t receive TARP funds at all. Funny how that works, huh?

Also important to note per Market Watch:

The fee would also not apply to General Motors Co., Chrysler, Fannie Mae (FNM 1.10, -0.02, -1.79%) or Freddie Mac (FRE 1.38, 0.00, 0.00%) , but would cover most other large firms that benefited either from the TARP or from other federal assistance, including help from the Federal Reserve.

GM, Chrysler, Fannie, and Freddie, all have direct ties to the government, hence they are going to be exempt from Obama’s proposed fees.  I guess this means that if you are in part controlled by the government you are exempt from laws.  See my earlier post on Unions that also illustrates how those with close ties to Democratic Party are also being exempted from laws and taxes that Obama is attempting to implement.

Two things here seem to jump out almost immediately.  The first is that the Obama administration has no economic or business acumen.  With unemployment at 10% and rising, Obama has no answers, and the proposals he is generating will only exacerbate, not alleviate the issue.  His refusal to allow the free market to operate is crushing the American people.  The second is that Obama will only seek to punish those who oppose him and will attempt to shield his supporters from being subject to the laws that he wants to impose upon our nation.

With regards to government intervention in the mortgage market place, at least the President of the Federal Reserve Bank of Philadelphia, Charles Plosser, is speaking out:

“I believe it is important that we [complete the purchases] and reduce our participation in this market, so the private market can once again resume a significant role,” Plosser said. “It cannot do so as long as the Fed is the dominant player, and we would risk delaying the return to normal market functioning rather than promoting that return were our sizable purchases to continue.”

Plosser added that the Fed had been “crowding out” private-sector investors in the MBS market.

The Fed must unwind its other stimulus programs as well. “An appropriate exit strategy to withdraw or restrict the massive amount of liquidity that we have made available to the economy will have to be put into action to keep the inflation rate from rising to unacceptable levels,” he said.

The extra-low federal funds rate must be raised as the economy returns to growth, Plosser remarked. He expects the economy to grow between 3% and 3.5% this year and the next. However, the unemployment rate will probably remain elevated, restraining consumer spending.

There are those who recognize the disruptive force the government is having on the marketplace and it is a positive note that they are speaking up.  Not explicitly mentioned here is that Plosser is also warning about stagflation.  Reading those bolded sections makes this abundantly clear.  Plosser, as many others, included myself, have long argued, is alluding to the fact that government intervention is going to result in high rates of unemployment and inflation, aka stagflation.

Unless or until the Obama administration gets out of the way and allows the free market to operate, Americans will suffer and the economy will not be allowed to reach its full potential.  Foolish policies such as government take over of huge sections of the economy, raising taxes (see also the impending tax hikes coming next year if the Bush Tax Cuts are not expanding, impacting every tax bracket in the United States), a lack of transparency into the operations of quasi-government agencies, as well as poor fiscal and monetary policies will prolong the depression that the government has essentially created.  Whether it is pride, politics, or lack of knowledge guiding this administration we continue to pay the price for their failure.  Now, with looming tax increases, we are seeing it increasingly quantified.

Yes, We Really Are That Far in Debt

By Caomhin

It’s something that many of us have long warned.  The runaway national debt is going to do irreparable harm to our nation if it is not put under control.  With the power structure the way it is, with Liberals in charge of our finances, there is no chance of that occurring.  Almost every week they are proposing monstrous spending programs that are accelerating the expansion of the national debt.  For those of you who still do not see the nation debt figures as being completely unsustainable and dangerous to our nation, this is an absolute must-read:

Democrats in control of Congress, including then-Sen. Obama (Ill.), blasted President George W. Bush for failing to contain spending when he oversaw increased deficits and raised the debt ceiling.

“Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren,” Obama said in a 2006 floor speech that preceded a Senate vote to extend the debt limit. “America has a debt problem and a failure of leadership.”

Obama later joined his Democratic colleagues in voting en bloc against raising the debt increase.

Now Obama is asking Congress to raise the debt ceiling, something lawmakers are almost certain to do despite misgivings about the federal debt. The ceiling already has been hiked three times in the past two years, and the House took action earlier this year to raise the ceiling to $13 trillion.

Congress has little choice. Failing to raise the cap could lead the nation to default in mid-October, when the debt is expected to exceed its limit, Treasury Secretary Timothy Geithner has said. In August, Geithner asked Senate Majority Leader Harry Reid (D-Nev.) to increase the debt limit as soon as possible.

I’ve highlighted the first part to illustrate Obama’s sheer hypocrisy on the issue.  I’d have much more respect for him if he would have been serious about reducing the national deficit and working on ways to reduce our debt levels without raising taxes.  Yet, as is most things with him, it was simply a political ploy.  The fact that there are warnings going out about the United States going into default and Obama is seeking not only to increase the cap to meet current obligations, but is still proposing to nationalize the health care system, is shocking on so many levels.

I’ll say it again, they are worried about the United States defaulting on its debt.  That view alone should be alarming to every citizen and, one would hope, every single member of Congress who should understand the gravity of the situation.  Sadly, that is not the case.   The CBO has repeatedly blasted the Liberal proposal for a government take over of health care for the immense debt that it will add to our nation over the long term.  The arguments against health care are plenty and range from a decrease in the quality and supply of care, to the moral risks of putting bureaucrats in charge of making health care decisions for you rather than making the decisions for yourself.  That is not my point here, however.

It is seemingly unbelievable that as even Obama’s Treasury Secretary is sounding alarm bells about our nation going into default that the liberals are rushing through numerous pieces of legislation that will add to our debt significantly.  Precisely the opposite approach should be pursued at this time.  Obama spent added nearly $1 trillion in debt with his failed stimulus plan that I have repeatedly stated would only do harm in the long term while slowing the self corrections of the free market, thereby prolonging the depression (and yes, we are in a depression, we have seen more than enough quarters of negative GDP numbers to warrant calling it as such) while threatening to end the coming recovery prematurely when Obama and the Democrats raise taxes, which I will guarantee you they will do.  Either simply by letting the Bush Tax Cuts that every American enjoys, or by going even further and raising rates well above 2000 tax year rates.  They can not even fathom cutting spending and find it morally objectionable to live within our nation’s means.  It is inexcusable and unforgivable that politicians have kneecapped the long term economic security of every man, woman, and child in our nation.

More Jobs Shed in August Than Expected

By Caomhin

The economy may be stabilizing slowly but surely in some sectors due to free market forces in operation despite Obama’s best attempts to unleash Keynesian hell upon the nation.  The main effects of the government’s massive interference in the marketplace will be nothing more than larger than expected and prolonged unemployment even as Obama foolishly states that he saved the economy from “catastrophe.”  This of course is a complete and utter fallacy, as we will learn what a “jobless recovery” really is with the added pain of rapidly rising inflation rates coming from the Administration’s brutal “stimulus” plan.  We are again seeing troubling news for the American people, who seek nothing more than to make an honest living and provide for their families:

Companies in the U.S. private sector shed 298,000 jobs in August, according to the ADP employment report released Wednesday. The report comes two days before the Labor Department reports on nonfarm payroll growth for August. The decline in employment was more than the consensus forecast of Wall Street economists of a decline of 250,000 in nonfarm payroll in August, which also includes the government sector.

250,000 jobs lost is a horrendous number, but 298,000 is a full 19.2% worse than they expected.  We would have been much better off with a much more limited policy of targeted tax cuts for both individual wage earners and corporations which would have a a much more rapid and direct positive effect on the economy while saving us nearly $1 trillion dollars in debt when interest payments are factored into the equation.  The Stimulus Bill is exactly what we had billed it as, nothing more than a political kickback and Pork Barrel Sending which would help interest groups ahead of the American people.  Add to this the fact that our taxes will most assuredly be raised for a number of factors, including the passing of this legislation, and the net effect of the Stimulus Bill was and is by far, an immense net loss for the American people.

Obamanomics is Kneecapping America

By Caomhin

Sound harsh?  In reality, that’s not harsh enough.  We here at have been trying to sound the alarm even while Obama was on the campaign trail and we spoke against against President Bush’s bailouts as well.  Liberals and big government GOPers are still trying to say that these plans are working.  They are not.  Obama, while hiding on vacation, released the horrendous news, unemployment to stay at near 10% (far above where he said it would be if his Stimulus Porkfest passed), with deficits exploding by over 22% over the next 10 years due to his spending…in 7 months.  Worse yet, they are killing our ability to be productive in the present and in the future:

The federal government faces exploding deficits and mounting debt over the next decade, White House officials predicted Tuesday in a fiscal assessment far bleaker than what the Obama administration had estimated just a few months ago.

Figures released by the White House budget office foresee a cumulative $9 trillion deficit from 2010-2019, $2 trillion more than the administration estimated in May. Moreover, the figures show the public debt doubling by 2019 and reaching three-quarters the size of the entire national economy.

Obama economic adviser Christina Romer predicted unemployment could reach 10 percent this year and begin a slow decline next year. Still, she said, the average unemployment will be 9.3 in 2009 and 9.8 percent in 2010.

I wonder people like Arlen Specter still feel good about themselves about passing that deficit exploding bill that produced nothing except an unemployment rate that will continue to climb into 2010.  I distinctly recall, not even three weeks ago Obama saying,

“While we have rescued our economy from catastrophe, we have also begun to build a new foundation for growth.”

Bumping the national debt up to $9 trillion dollars and unemployment staying near 9.8% in 2010 is not a “catastrophe?”  Does Obama even know what economics or reality is?  He can not truly believe this.  This has to be his ego talking.  Nobody can be that disillusioned about the economy.

Some members of the media are seeing the extreme danger in Obama’s deficit bloating and are calling him out on it, not even allowing him to use his “Blame Bush,” excuse anymore, because, well, it’s a huge lie:

President Barack Obama’s budget would produce $9.3 trillion in deficits over the next decade, more than four times the deficits of Republican George W. Bush’s presidency, congressional auditors said Friday.

Worst of all, CBO says the deficit under Obama’s policies would never go below 4 percent of the size of the economy, figures that economists agree are unsustainable. By the end of the decade, the deficit would exceed 5 percent of gross domestic product, a dangerously high level.

White House budget chief Peter Orszag said that CBO’s long-range economic projections are more pessimistic than those of the White House, private economists and the Federal Reserve and that he remained confident that Obama’s budget, if enacted, would produce smaller deficits.

Even so, Orszag acknowledged that if the CBO projections prove accurate, Obama’s budget would produce deficits that could not be sustained.

Oh, so we’re supposed to feel good about Peter Orszag saying the he thinks the CBO is too pessimistic?  This is he same guy in whom Obama relied to tell us that unemployment would not go above 8% if his Stimulus Bill passed, the man who was so far off the mark in all his projection (all on the wrong side) that people are starting to demand he resign.  This is who they roll out to try and convince the American people that Obama knows what he’s doing and that his numbers can be trusted?  From all appearances, I wouldn’t let this guy balance my check book.  Remember this picture, which it now appears that the CBO was probably too optimistic when it came up with their figures?


If you haven’t already read Pete DuPont’s article from The Wall Street Journal entitled, “The High Cost of Liberalism,” you owe it yourself to do so.  It’s a stunning look into the future at just some of the tax increases that are going to have a tremendously negative impact on all Americans, from Main Street to Wall Street.  For the record, he mentions that it’s possible that the Democrats will keep most of President Bush’s tax cuts (which need to stay into place…and FYI if you have a a Roth 401(k) that was a result of Bush’s tax legislation as well) but I don’t buy it.  The Democrats have put us in such dire straits that they’re going to look for every penny they can get their hands on.  The people who will face the greatest impact if the Bush Tax Cuts expire?  The people making between $26,500 and $32,500 who face an 87% tax increase if they let the Bush tax cuts expire.  We’re losing our ability to compete and maybe even earn a decent living in the present and the future if we continue down this path.  The madness must be stopped.