Who’s Going To Pay For It?

OK, now all of you folks out there (especially the Obama supporters) stop and think for a little bit on the following:

  • A multi-billion dollar “stimulus” bill was passed and signed that was full of waste and earmarks.
  • Multiple banking and finance institutions were bailed out with billions from the government treasury.
  • Two car companies were also given loans, declared bankruptcy, and were not only able to write the loans off but got more money to see them through the bankruptcy and reorganization.
  • A global warming climate change bill was just passed in the House this past week with carbon cap & trade as its centerpiece.
  • The President is pushing for a universal healthcare coverage policy for anyone that wants it.
  • We are constantly bombarded with information that Social Security and Medicaid/Medicare are going to go broke in the near future.

Now who do you think is going to pay for all of the above? 

From ABC’s commentator George Stephanopoulos:

White House senior adviser David Axelrod said the president won’t rule out a health care reform bill that includes a middle-class tax hike.

"The president had said in the past that he  doesn’t believe taxing health care benefits at any level is necessarily the best way to go here.  He still believes that," Axelrod told me on This Week, "But there are a number of formulations and we’ll wait and see.  The important thing at this point is to keep the process moving, to keep people at the table, to the keep the discussions going. We’ve gotten a long way down the road and we want to finish that journey."

I pressed Axelrod on whether Obama will draw a line in the sand and veto any bill that funds health care reform with tax hikes for people making under $250,000 a year — despite a pledge Barack Obama made during the 2008 presidential campaign not to raise taxes on the poor and middle-class.

"One of the problems we’ve had in this town is that people draw lines in the sand and they stop talking
to each other.  And you don’t get anything done.  That’s not the way the president approaches us.  He is very cognizant of protecting people — middle class people, hard-working people who are trying to get along in a very difficult economy.  And he will continue to represent them in these talks," Axelrod said.

"But they’re also dealing with punishing health care costs, and that’s something that we have to deal with."

This should be a clue for the clueless.  For those who don’t want to think because it hurts their brains, then here’s the answer:  You are!!

What people don’t seem to realize is that every time Congress passes laws and the President signs them, there is usually some cost attached to them.  If it is a spending bill, then the funds are drawn from the Treasury.  The funds from the Treasury are collected by taxes, and you pay the taxes either directly or indirectly.  It won’t matter where you are in the social ladder, you will pay one way or another.

And you thought that the TEA Parties were ladies socials instead of “taxed enough already” protests.

Just thought you would like to know…

Will Chrysler Survive?

UPDATE AT BOTTOM OF POST!!

My personal opinion is a qualified “yes.”  But it’s not going to be pretty by any stretch of the imagination.

Today is the day that all phases of the government’s requirements for more funding were to be met.  And they almost made it happen.

While I’m writing this post, the announcement came through that the White House will force Chrysler into bankruptcy.  Exactly how this will affect the deal with Fiat, the newly approved contract with the UAW, and the bondholders is anyone’s guess since the fate of Chrysler will now be in a bankruptcy court.

Where the situation stood before the announcement was this:

  • Fiat announced that they would sign an agreement to form an alliance with Chrysler.
  • The UAW overwhelmingly ratified an agreement to cut benefits, cost of living increases, overtime pay, and bonuses.
  • The largest bondholders that held 70% of the debt agreed to a reduced settlement of debt.

Where the deal fell apart is that the remaining 30% of debt could not be settled with the bondholders.  Apparently, the bondholders could not tolerate for less than 30¢ on the dollar offered.  And in many respects, I can understand their position – I would not want to settle for that amount if my investment was guaranteed with company assets which are probably worth more that the offer.

The bankruptcy route that Chrysler will most likely take is Chapter 11 with Section 363(b), which is a provision of the bankruptcy code that allows companies to quickly exit bankruptcy by selling their most valuable assets in an auction, and then creating a new company without the liabilities. The “bad” assets of the company remain in bankruptcy and are liquidated.

The most valuable assets of Chrysler is Jeep and the minivans.  After that, there are a bunch of ho-hum cars, fuel-thirsty trucks, and so-so powertrains.  So if Jeep and the minivans are sold to the highest bidders, then what’s left of the company?  Not much, I’m afraid…

Now with Chrysler on the verge of declaring and filing for bankruptcy, will Fiat still ink the deal?  If I were them, I wouldn’t.  Instead, I would sit back and make offers for the pieces I want – dealer networks, maybe a plant here or there to build product in the United States, and perhaps the Jeep nameplate.

Where the UAW is going to end up with this latest development is anyone’s guess.  In some respects, the just approved contract change just might be thrown out by the bankruptcy judge.

But it doesn’t matter if Chrysler emerges from whatever bankruptcy filing, agreements, or deals if it doesn’t do the one thing that keeps any business going.  That is to sell their product.  And here’s where I think that Chrysler will have trouble.

President Obama has stated repeatedly that the state of the economy is dire, and could take up to a year to improve.  Couple that with people either losing their jobs or fearing the loss of the job will inhibit buying a big-ticket item such as a new car.  Those consumers will either fix up their old car or buy a used car.  And that’s bad news for all the car makers.

Chrysler is just the beginning.  In 30 days, we will see what happens with GM, and I’m going to predict that that situation will be just as ugly as Chrysler.

UPDATE:  FIAT SIGNS DEAL WITH CHRYSLER!!

It was announced this afternoon that Chrysler and Fiat have signed an agreement.  Full details have yet to be announced.

In retrospect, I probably shouldn’t be surprised.  Fiat is only bargining with technology, not money, something they already have & can readily share.  In exchange, they get seats on the Board and 20% of the company with an option to aquire another 15%.

In a related announcement, Bob Nardelli, Chief Hachetman of Cerberus, is stepping down from the head of Chrysler.  About time…

America the Socialist Nation?

This is a long post.  My suggestion is to pour yourself a drink & make yourself comfortable before sitting down to read this post.


The American people will never knowingly adopt Socialism. But under the name of ‘liberalism’ they will adopt every fragment of the Socialist program, until one day America will be a Socialist nation, without knowing how it happened. – Norman Thomas, American Socialist

But how can this happen?  The short answer is through government programs, and the dependence on the American public on those programs.  The current economic crisis is a perfect platform on how such programs can be implemented.

For right or wrong, the government is propping up Wall Street (banks & other financial firms), and to a much lesser extent, the automotive industry.  But there is a price – further intrusion of the government into the market.  We also have to realize that the government has manipulated not only the market, but has inserted itself into the role of a social equalizer with disastrous results.  And quite frankly, this is wrong not only from a moral standpoint, but from a governmental one as well.

Now before anyone starts to scream obscenities at their computer trying to burn my ears (or other body parts), bear with me.  Everyone, regardless of their race, religion, etc., should have the chance to achieve their dreams through their own hard work, resources, persistence, and talents.  Our Declaration of Independence stated:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.

Please note that Happiness by itself is not a right nor is it guaranteed, but the pursuit thereof is.  For leaders within the government to state otherwise is a corruption of what our government’s purpose really is.

Our government’s purpose is not to restrict trade or commerce, but to enable it to compete on a level playing field.  If a person or company comes up with a superior product or service that sets them above their competition, then that person or company should reap the rewards instead of being penalized or demonized.  This has happened countless times to the oil industry, software companies, and numerous other businesses.

Nor is our government’s purpose is to restrict the rights of the populace.  The incessant furor over the rights of the People to Bear Arms is a prime example of this.  Lately, the rights of people to verbally disagree with the current President has come under fire with the White House attacking a certain outspoken radio host calling him, among other things, a traitor, unpatriotic, and un-American.  What did another member of the same party say about speaking one’s mind about the activities of a presidential administration?

We need to stand up and say we’re Americans, and we have the right to debate and disagree with any administration. – Hillary Clinton

Last, our government officials are to represent the populace that elected them, and not set themselves above the citizenry.  But they do – all the time, and often with impunity.  All anyone needs to do is look at the automatic pay raises without regard to performance, their health care and retirement plans, and other perks of the office to realize that these representatives have benefits rivaling many of the corporate CEOs that they are targeting, berating, demonizing, and punishing.

Now I know that I’ve wandered away somewhat from the original premise of this post, but bear with me…

We have all watched with more than a cursory interest in the pains of the funding of Social Security, Medicare & Medicaid, and it seems that every couple of years that there is a threat of these programs going under unless additional legislation was passed to continue funding the programs.  And there are many people that have bought into the premise that the government would take care of them.  To which I wrote:

To rely on the government for anything long-term is stupidity at best and insanity at worst. – Equal Diversity

Social Security, Medicare & Medicaid are social programs, and while they serve their purpose of providing a safety net for people who have fallen on hard times or couldn’t otherwise make it, they are, for the most part, manageable from a financial standpoint.  But what helped cause our current economic mess was the Community Reinvestment Act (CRA) of 1977.

To recap from an earlier post, the CRA was to help those people who would ordinarily not be able to afford buying a house to take out a loan to buy that house.  Those loans would be guaranteed by the quasi-government institutions of Fannie Mae and Freddie Mack.  Through creative bookkeeping, lack of government oversight (or Congressmen looking the other way), and regulations that allowed financial institutions to buy & sell mortgages like commodities, the number of risky loans & “toxic” assets grew to an unsustainable amount.  When the economy started to implode because the credit market could no longer bear the astronomical debts, the entire house of cards came crashing down, and took the rest of the country (and world) with it.

Enter the government to clean up the mess that they created…with your tax money…from the future…waaaaay in the future.

So now there is legislation and loans and God-only knows what else traveling through Congress at the behest of the Administration that I do not believe will help the economy recover.  Perhaps the following statement is all the more disturbing in light of our current problems:

I think when you spread the wealth around it’s good for everybody. – Barack Obama

So what I’m getting from this is that Government, i.e., Big Brother is going to give us all money without earning it.  This is called entitlement.  From a post by Brian Russell at WorldNetDaily.com:

Pervasive entitlement attitudes are harming Americans in a myriad of ways. Debt created by entitlement-driven purchasing decisions can lead to legal problems, bankruptcy and foreclosure, which, in addition to destroying one’s credit and placing one’s financial well-being in jeopardy for years, can cause a tremendous amount of stress, which in turn, can pervade one’s life and strain one’s relationships. Successful interpersonal relationships require mutual sacrifice, but people with entitlement attitudes often expect sacrifice from others without expecting to reciprocate. While this creates resentment in others, people with entitlement attitudes tend to harbor plenty of their own resentment. They’re likely to be jealous and resentful of others who appear to have more or better possessions, positions, or relationships. Neither jealousy nor resentment tends to facilitate the formation of healthy relationships or to improve existing relationships. Entitlement attitudes make it easier for people to justify satisfying their interpersonal wants through dishonest or hurtful means, such as marital infidelity, and depending on the depth of a person’s belief that his or her wants are deserved, challenging that belief could even provoke the kind of anger that leads to abusive behavior.

The entire article is a must read, and I can relate to the comments on the educational system because I have witnessed the actions of the schools first hand with my son.

The obvious question is “Where is the wealth going to come from?”  The answer is “From the working taxpayer’s pocket.”  And if you’re working your butt off trying to make ends meet, that answer should enrage you, because you know it’s true. I’m not of a mind to cover the bad debts of others, especially if they’ve knowingly put themselves in the situation.

But here’s the ultimate outcome of these policies – there will be a two class society, the have’s & have-nots, and those classes will be much farther apart than they are now.  The middle class will be driven to extinction by onerous taxes and the sense of entitlement via government subsidies to the lower classes.  Class envy will be rampant, and success by the efforts of individuals to succeed will be downplayed if not discouraged.  The Haves (our Congress, President, large corporations, and political insiders & parties) will rule the Have-Nots (everyone else).

And these policies are being implemented as we sit and read this post.  I would suggest that you read this post titled Communist or Liberal Agenda? along with the comments. If you want to keep your head in the sand after reading this post & comments, fine – just don’t bitch when your rights & economic freedoms are minimized or outlawed.

I understand that there are many Taxed Enough Already (TEA) parties being organized throughout the country for April 15 to protest Congress and a President who:

  • vote for a $500 billion tax bill without even reading it?
  • are spending trillions of borrowed dollars, leaving a debt our great-grandchildren will be paying?
  • consistently give special interest groups billions of dollars in earmarks to help get themselves re-elected?
  • want to take your wealth and redistribute it to others?
  • punish those who practice responsible financial behavior and reward those who do not?
  • admit to using the financial hurt of millions as an opportunity to push their political agenda?
  • run up trillions of dollars of debt and then sell that debt to countries such as China?
  • want government controlled health care?
  • want to take away the right to vote with a secret ballot in union elections?
  • refuse to stop the flow of millions of illegal immigrants into our country?
  • want to force doctors and other medical workers to perform abortions against their will?
  • want to impose a carbon tax on your electricity, gas and home heating fuels?
  • want to reduce your tax deductibility for charitable gifts?
  • take money from your family budget to pay for their federal budget?

Participate, speak-up, and vote – those are your tools for implementing real change in our government, the political parties, and our lives.  The answer to our future is more with the American people to take responsibility for our lives, not looking to government to provide all the answers.

An Alternate Stimulus Proposal

Yesterday, the Senate passed an $838 Billion “stimulus bill,” of which a reported 42% percent of its $838 billion in debt-financed costs is tax cuts, including Obama’s signature $500 tax credit for 95 percent of workers, with $1,000 going to couples. In contrast, the House version is about one-third tax cuts.  At the time of this post, it sounds like that an $800 Billion compromise version of this monstrosity is almost ready for voting by Congress.

So where is the rest of the money going? In case you have forgotten, read the previous post – it’s all going to increase the size of the Federal Government and what I would term “special interests.” But what about the hardworking person that is fighting to keep a roof over their head? From MSNBC.com:

Obama’s “Making Work Pay” tax credit would be reduced from $500 per worker to $400, with couples eligible for an $800 credit, instead of $1,000, said a Democratic aide close to the talks.

[Senate Finance Committee Chairman Sen. Max] Baucus had said earlier that $35.5 billion to provide a $15,000 homebuyer tax credit, approved in the Senate last week, would be cut back. There was also pressure to reduce a Senate-passed tax break for new car buyers, according to Democratic officials.

From another MSNBC.com article:

A provision limiting compensation for top executives of companies receiving federal bailout assistance appeared likely to be dropped altogether because of an unanticipated $11 billion budget cost.

So it should be obvious to even the most rabid political party supporter that our elected politicians do not have the best interests of the general populous in the forefront of their concern. Instead, their aim is to grow the government and take care of their supporters on the backs of the taxpayers. And they are going to do it with debt-financing, which is one of the reasons we are in this mess to begin with.

Now before I go further, let’s stop and think about the following points:

The bailout of the bankers cost the taxpayers $700 Billion, and the expected final tally for the Obama stimulus package is around $800 Billion. That’s $1.5 Trillion. To put it in perspective, that’s $1,500,000,000,000.00 that the Federal government does not have, and they are adding that to the current national debt ($10.7 Trillion). Additionally, I have heard rumblings that since the first $700 Billion to the banks didn’t work, more money may be requested.

Among the reasons for the continuing slow economic recovery (which some have termed a recession) is the lack of credit lending by the banks and other fiduciary companies due to the large number of bad loans. Even though these institutions have received Federal loans, they are not lending money to the public or businesses because of the downturn in the economy. To exacerbate the problem, jobs are being cut by the various businesses because of the lack of funding to the public for purchasing goods & services. This now becomes a vicious cycle.

But doesn’t it seem ironic that in order to stimulate the economy that was ruined by too much credit, we must now borrow money, i.e., more credit, to put back into the economy? Does anyone else out there think that this is insane, and only delays a total meltdown?

So here is my counter-proposal to the Obama Stimulus Plan – Tom’s Taxpayer Economic Relief Boost (TTERB). TTERB would work in the following manner:

  1. Each taxpayer would receive, without paying additional taxes of any nature, an amount from the Federal Government equaling the total of Federal Withholding Tax (Federal Income Tax) for the past five years. Those who have not paid any tax are not eligible for this refund.
  2. Each homeowner shall be able to deduct the entire amount of interest paid on home mortgages. For those with multiple homes, only the lowest amount of interest paid on an individual mortgage shall apply. For those who live in apartments, 20% of the rent paid during the year shall be eligible for deduction. This deduction will only be available for three years.
  3. The refunds and deductions as outlined in the above points shall first be applied to outstanding debt such as credit cards, past due bills, personal loans, back taxes & penalties, and the like before any other expenditures are to take place. Mortgages and car loans shall be exempt from this provision unless the taxpayer is behind in payments or is in danger of foreclosure.
  4. The refunds and deductions as outlined in the above points shall not be used to fund or otherwise apply for new debt or credit lines.

What this proposal will do is put money back into the hands of the responsible, tax-paying people that the Obama Stimulus Plan proposes, only without the government handouts and pork. The consumer is now able to not only pay off debt that may have been incurred, but should the person have lost their job, be able to pay his bills until the economy, spurred on by increased consumer spending, rebounds and is able to become employed again.

The entire idea is to put money back into the hands of responsible, hard-working tax-paying Americans who have put money into the system. It’s time to give these people a break. Of course, this proposal is discriminatory – deadbeats and tax-cheats will not benefit.

Yes, I know this is simple, probably too simple, for the great minds that we have in Washington to understand. But I’m a simple person, and keeping it simple works for me.

Where’s the Relief?

And no, I’m not referring to an upset stomach, but this almost qualifies for a triple dose of Pepto, Rolaids, and Pepsid.  If you are like me, you are watching your retirement funds losing over 25% of their value, and there’s almost nothing you can do about it.

One week after the Congress passed and the President signed the $700 Billion bailout bill to the credit markets, the economy of the world is tanking faster than a rock on steroids.  Wasn’t this emergency bill supposed to avert this crisis?

Is anyone else out there thinking that we just got shafted again?

If anything, this continued fiasco should tell all of us that our elected officials don’t know what they are doing except to find ways of extracting more money out of us on the pretense of "helping" us.  If this is helping, I would hate to think of what these clowns would do to hurt us!

Obviously, those who were elected are obviously unqualified to lead our country much less the financial sector.  I advocate that we pass the hurt on to them – vote for whomever is not in office, i.e., do not re-elect anyone!!  Register your dissatisfaction via the ballot box and vote these bozos out!  Perhaps some new people will take it to heart and do a better job.