Americanly Yours

In case you missed Rick Santelli’s “rant” you should check it out here.  Santelli spoke out strongly against the bailouts and floated the idea of organizing a Chicago Tea Party on July 4th.  There are also plans in the works for similar events all over the country.  So far over 5000 people have pledged to participate.  Check the site out here.

I have created a Facebook group for the purposes of organizing an “Atlanta Tea Party.”  Check it out.

Tomorrow at noon at the Georgia State Capitol, there will be a protest against the bailouts.  Check out the event’s page here.

Its gonna rain tomorrow, but thats no excuse.  I hope to see you there!!!

Americanly Yours,

Phred Barnet

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I found this chart at the New York Times.  It totals up all of the money already committed to bailouts by the United States Government.  It also shows the total amount of this money that has already been spent on bailouts of private sector industries by the government.

According to this chart, the US Government has committed $8,800,000,000,000 [$8.8 trillion] to these bailouts.  Of this, the government has already spent about $2,000,000,000,000 [$2 trillion].

This is insane.  The $2,000,000,000,000 [$2 trillion] equals $6,666.66 per American.  $8,800,000,000,000 [$8.8 trillion] in total bailouts adds up to a total of $29,333 per citizen of this country!

But, this money doesnt even include the $152,000,000,000 [$152 billion] “stimulus” last year or the $787,000,000,000 [$787 billion] bailout recently passed.  If you add those two bills to the total, the total swells to $9,739,000,000,000 [$9.739 trillion].

This equals $32,463.33 per American!!!

This amounts to about 3/4 of the annual US GDP and is nearly enough to double the national debt.  And, as Mr. Obama and others have reminded us, there is no guarantee that this will work.

The government just cannot justify spending this much of its citizens’ money on bailouts and “stimulus” that has no guarantee of working.

This is money that has to be paid back.  It will be paid back by Americans in the future.  Including the current national debt and the money that will be added to the debt due to these new bailouts and “stimulus” bills, a child being born today is born saddled with approximately $65,000 in debt.

We are selling our children into slavery for bailouts and “stimulus” bills that may not even work.

Americanly Yours,

Phred Barnet

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This past weekend, President Obama announced that he wanted to cut the deficit in half by the end of his first term in 2013.  You would think that this would make a deficit hawk like me happy.  It would–if it werent so misleading.

President Obama says that he wants to cut the $1,300,000,000,000 [$1.3 trillion] deficit that he inherited from President Bush down to a deficit of $533,000,000,000 [$533 billion] by 2013.  While this seems like a tough goal that will cut spending, this will actually result in increased spending.  The reason for this is simple:  the present massive deficit is an aberration from the normal, including hundreds of billions of dollars in spending that was supposed to be one time spending.  For example, included in the $1,300,000,000,000 [$1.3 trillion] deficit is the $700,000,000,000 [$700 billion] spent on the bank bailout, the additional billions spent on the bailouts of Bear Stearns and AIG, and last years stimulus plan that sent most Americans a $600 check.

In fact 2008’s deficit was $438,000,000,000 [$438 billion] a massive number, but a number that is dwarfed by the $1,300,000,000,000 [$1.3 trillion] deficit that is to be expected in 2009.  The vast majority of this money was supposed to be for one time things.  In fact, without adding the increased spending from the “one time items,” the deficit for 2009 looks a lot like the deficit for 2008.

President Obama’s 2013 budget deficit figure still represents an increase of over 21% from 2008’s number.  This “cut” looks more like an increase to me.

And Mr. Obama’s own numbers still admit that he will have a deficit of over $1,000,000,000,000 [$1 trillion in both 2010 and 2011].  No numbers were given by his office for 2012’s predictions, but lets give him the benefit of the doubt and assume that 2012’s deficit equals 2013’s deficit of $533,000,000,000 [$533 billion].  This means an increase in the national debt of at least $3,000,000,000,000 [$3 trillion]–equal to $10,000 per American.  I think the numbers will be much higher.

More on that later.

Americanly Yours,

Phred Barnet

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A year ago, America was completely different than it is now.  In the last year, the government has nationalized the banking industry, taken over the worlds largest insurer (wasting well over $100 billion in the process), and taken control of two iconic car companies.  Last week, Congress agreed to a plan that will cost nearly $800 billion.  Between actions by Congress and the Obama administration, as much as $3 trillion was pledged to government bailouts last week! This amounts to 21.7% of American GDP (US GDP is 13.7 trillion).  This new spending is more than government’s entire 2008 budget of just under $3 trillion.  Every penny of this money is being financed with debt.  This will raise the size of the national debt substantially.  Our national debt currently stands at roughly $10.7 trillion.  If we add another $3 trillion to the debt, our debt will increase by 28% and will be roughly equal to our GDP!

Of course, even Mr. Obama has admitted that there is no guarantee that these plans will work.  Even more interesting, he has said that these plans will have little effect before 2010.  This is particularly interesting because the non-partisan CBO recently estimated that the recession will supposedly be over in mid 2009 even if these “stimulus” plans werent passed, meaning that Mr. Obama’s plans wouldnt even begin working until after the economy has already started to heal itself.

But, lets pretend that Mr. Obama’s boldest predictions are correct and that this plan will create 4 million new jobs (although he says it will create or save 3-4 million jobs).  Let us also assume that each of these jobs is a high paying job of $100,000 a year and that these jobs are permanent jobs that will never go away in the future, regardless of future circumstances.  According to both H&R Block’s tax calculator and the Heritage Foundation’s much simpler tax calculator, a single person earning $100,000 pays $19,472 in Federal taxes.  So, the 4 million jobs that we are pretending this plan will create will return $77.888 billion in taxes per year to the federal government.  Excluding any interest (which will likely be a hefty sum and will go countries like China), it will take the government about 35.5 years to recoup the money!

If, however, this plan still creates 4 million jobs but these jobs pay $50,000 per year instead of $100,000, the government will collect $6,606 in taxes per person totaling $26.424 billion in taxes per year.   Under these circumstances, it will take the government 113.5 years to recoup the money!

However, I made a little Excel spreadsheet assuming that the government would have to pay 3% interest on these new loans.  This is a generous assumption, considering that the average rate on treasury bills has been much higher.  I used both of the above jobs assumptions in my calculations and found that the government will actually never be able to recoup this money if interest is factored in! Check it out for yourself.

Americanly Yours,

Phred Barnet

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The “stimulus” bill that President Obama is going to sign today gives $400 to every worker in the country. Last year, President Bush signed a bill that gave every American worker $600. It did nothing (or almost nothing) to stimulate the economy.

Only Congress would use this kind of backwards “logic.”

Americanly Yours,

Phred Barnet

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