Friday, the U.S. House of Representatives rushed to restore funding to the Cash for Clunkers program. The wildly successful program has started a stampede to car dealerships where people could dump their 1984 or newer vehicle in favor a brand new more fuel efficient model.
Apparently, the program was a bit too successful as Americans drained the available funding in a mere 4 days. Hence the rush to dump more borrowed money into the program.
The whole thing seems a bit odd to us. We're in a financial crisis precipitated by excessive debt that could not be repaid. Obama and his allies in Congress - acolytes of John Maynard Keynes all - decide to dump TRILLIONS of dollars into the system in an effort to "stimulate" the economy. The idea was to make enough money available so that people would begin to spend again. The problem is all of the "stimulus" money is borrowed.
The Cash for Clunkers program gives up to $4,500 for qualifying customers (one must always say "qualifying customers" like a bad disc jockey) to apply towards the purchase of a new vehicle that meets all of the qualifications of the program and the old vehicle must be sent to the wrecking yard in the sky.
Now last time we checked, a new vehicle is considerably more expensive than $4,500. Most people - even with the $4,500 Clunker Check - will need to take out a loan in order to purchase their shiny new vehicle.
So, we're using borrowed money to encourage people to borrow money in order to get ourselves out of a crisis precipitated by the wrong people borrowing too much money. To make matters even worse, the program was so popular that it emptied the Clunker Coffer of borrowed money so quickly that we needed to borrow more money so that even more people can go out and borrow even more money.
Is it just us or does it bother you that we're using borrowed money so that people can borrow money so that we can fix a borrowing crisis? Not to mention the fact that it now quite literally takes an act of Congress to extend an automotive incentive program.
We're living in strange times indeed.
Showing posts with label Stimulus. Show all posts
Showing posts with label Stimulus. Show all posts
Aug 1, 2009
Jul 1, 2009
Common Sense Breaks Out at MRCOG
While Marty pines away for his personal choo-choo, it looks like common sense has broken out over at the Mid-Region Council of Governments (MRCOG). The Albuquerque Journal (subscription) is reporting that the group's Metropolitan Transportation Board has directed MRCOG to apply for a federal TIGER grant - a part of the stimulus bill passed by Obama's Congress - to pay for the $350 MILLION interchange.
When you compare the interchange renovation ($350 MILLION) to Marty's trolley ($240 to $300 MILLION) to the Rail Runner ($450 MILLION) and the number of people and jobs this interchange serves daily, the Paseo/I-25 project just makes sense. That's why it will never, ever happen.
The Obama administration and his bobble-heads in Congress are dead set against anything that emits carbon. 170,000 vehicles burn a lot of gas and emit a lot of carbon. Plus, it's the type of "stimulus" that creates an immediately useful, tangible, object that has a relatively small long-term fiscal impact on local budgets. Again, it makes too much sense.
Look, we believe it's fundamentally wrong to use borrowed money to "stimulate" the economy which is made up of people who ultimately have to repay that money. But if Obama and Company are going are dead set on wasting borrowed money, at least let it go to something that is eminently useful and won't create huge future demands on local taxpayers.
For now, we'll hold on to the good feeling that there seems to be some common sense breaking out somewhere in government and forget about the fact that it follows incredible stupidity.
It is also about fixing a "failing intersection" that connects the east and west sides of the metro area and sits in the middle of a major job center.Amazingly, the state DOT supports the move. So do we. After all, 170,000 vehicles a day, 200,000 plus people per day, and 6,000 jobs make the interchange an integral part of the city's infrastructure.
About 170,000 vehicles a day pass through the I-25/Paseo del Norte interchange, and "there are 6,000 jobs that are accessed daily from this intersection," according to MRCOG.
When you compare the interchange renovation ($350 MILLION) to Marty's trolley ($240 to $300 MILLION) to the Rail Runner ($450 MILLION) and the number of people and jobs this interchange serves daily, the Paseo/I-25 project just makes sense. That's why it will never, ever happen.
The Obama administration and his bobble-heads in Congress are dead set against anything that emits carbon. 170,000 vehicles burn a lot of gas and emit a lot of carbon. Plus, it's the type of "stimulus" that creates an immediately useful, tangible, object that has a relatively small long-term fiscal impact on local budgets. Again, it makes too much sense.
Look, we believe it's fundamentally wrong to use borrowed money to "stimulate" the economy which is made up of people who ultimately have to repay that money. But if Obama and Company are going are dead set on wasting borrowed money, at least let it go to something that is eminently useful and won't create huge future demands on local taxpayers.
For now, we'll hold on to the good feeling that there seems to be some common sense breaking out somewhere in government and forget about the fact that it follows incredible stupidity.
Feb 16, 2009
No to Stimulus
Last week's Eye Poll took up the issue of the over $800 BILLION spending... "stimulus" package. Eye readers are just as skeptical of the concept of spending borrowed money in an effort to stimulate an economy plagued with bad debt. 53% of readers do not support the "stimulus" package, 10% supported some of it, 1% had no opinion, 14% supported most of it, and 22% supported the package (view it here).
There's a fundamental problem with the Obama-Pelosi-Reed "stimulus" package in that unlike the private sector, governments do not create wealth because every government job necessarily takes resources away from private companies and individuals. FDR's New Deal is a prime example of the failure of government spending as a vehicle for economic recovery.
Most historians credit World War II with raising the United States and the world out of the depth of the Great Depression. Keynesians point to the massive government spending inherent to that conflict as validation of their belief in government spending as a vehicle for economic stimulus.
It's true that all of the parties involved in World War II spent massive amounts of money on the war. However, the war was also a time of rationing and privation where non-war related production was at an absolute minimum. The warring nations of WWII did not create wealth they quite literally destroyed it.
At the end of that brutal conflict, most of the industrialized world was left in shambles - their infrastructure in destroyed, their economies non-existent. The lone exception was the United States. A war weary world turned to the one country left standing to provided needed goods that they were no longer able to produce themselves.
It wasn't the war that brought the world out of the Great Depression - rather it was the end of the war and a return to wealth creation by individuals and private companies that brought about economic prosperity.
Obama's Neo-New Deal will have the same effect as FDR's - temporary jobs, massive debt, and a legacy of unsustainable government programs. The blind adherence to Keynsian principles will most likely deepen the current recession perhaps even pushing the world into depression.
There's a fundamental problem with the Obama-Pelosi-Reed "stimulus" package in that unlike the private sector, governments do not create wealth because every government job necessarily takes resources away from private companies and individuals. FDR's New Deal is a prime example of the failure of government spending as a vehicle for economic recovery.
Most historians credit World War II with raising the United States and the world out of the depth of the Great Depression. Keynesians point to the massive government spending inherent to that conflict as validation of their belief in government spending as a vehicle for economic stimulus.
It's true that all of the parties involved in World War II spent massive amounts of money on the war. However, the war was also a time of rationing and privation where non-war related production was at an absolute minimum. The warring nations of WWII did not create wealth they quite literally destroyed it.
At the end of that brutal conflict, most of the industrialized world was left in shambles - their infrastructure in destroyed, their economies non-existent. The lone exception was the United States. A war weary world turned to the one country left standing to provided needed goods that they were no longer able to produce themselves.
It wasn't the war that brought the world out of the Great Depression - rather it was the end of the war and a return to wealth creation by individuals and private companies that brought about economic prosperity.
Obama's Neo-New Deal will have the same effect as FDR's - temporary jobs, massive debt, and a legacy of unsustainable government programs. The blind adherence to Keynsian principles will most likely deepen the current recession perhaps even pushing the world into depression.
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