January 07, 2009

Stimulus, post-partisanship and shitting blood

Even in 2007 during his irritating announcement, non-announcement phase I liked Obama. HOWEVER, I hated the retarded bullshit about 'the coarseness of our politics'. I hated, even more, the dimwitted fools who diligently tried to convince me that he was REALLY was just so awesome that Republicans would work with him and be his friend; that he would persuade them.

Oh, how much I agree with Barney Frank...

I think he overestimates his ability to take people — particularly our colleagues on the Right — and sort of charm them into being nice. I know he talks about being post-partisan. But I’ve worked frankly with Newt Gingrich, Tom Delay, and the current Republican leadership. … When he talks about being post partisan, having seen these people and knowing what they would do in that situation, I suffer from post partisan depression.

This is, of course, all about the stimulus package. Krugman has pointed out that the plan rolled out does too much on the tax cut side and too little on the actual, you know, infrastructure and job building side. Why on Earth would Obama do that? why to get the support of Republicans in the Senate like everyone's favorite obstructionist, Mitch McConnell

Look, Republicans are not going to come on board. Make 40% of the package tax cuts, they’ll demand 100%. Then they’ll start the thing about how you can’t cut taxes on people who don’t pay taxes (with only income taxes counting, of course) and demand that the plan focus on the affluent. Then they’ll demand cuts in corporate taxes. And Mitch McConnell is already saying that state and local governments should get loans, not aid — which would undermine that part of the plan, too.

While it's true that infrastructure spending takes longer to hit the economy than tax cuts, the velocity of infrastructure spending is FAR higher. Further, it leaves behind hard assets that will be desperately needed for the next leg of economic growth. Just in case you think Pauli is wrong, take a look at this work (and here's something else for good measure).

Tax cuts are going to spur some spending but it's going to be on imports and the balance will be saved or used to pay down debt. This would be great if you were talking about $2000 or more per individual. However, we're talking about $500. And this is all to get the economy moving again while the little bit of infrastructure spending takes effect.

Which is, simply, CRAPTASTIC. Lookit, what's really dragging on the economy is all the money on the sidelines. The Fed's have done a great job of stop gapping it but at some point banks have got to get back to lending. What Obama needs to be talking about is, on the afternoon of January 20th, nationalizing Bank of America as a warning to every other bank in the US to quit acting like scared children and get back to work. With credit loosened, people will start to get comfortable and start spending. That spending will drive job creation and we won't have to give everyone a stupid tax cut that will amount to $40 per paycheck and do fuckall to stimulate real economic growth.

DDay has this take and it's spot on. Obama promised, Obama delivers stupidly. And, as an added bonus, it's all to chase after some insanely stupid bipartisan agenda he doesn't need.

What's most dangerous about this is the effort to corral 75-80% support just for the sake of doing so. Not only is it unlikely, it will end up really eroding Obama's ability to draw on popular support to govern.

One last point... when Obama talked about cutting taxes on the middle class, I thought he was talking about increasing deductions, maybe lowering the rates. I never, in my wildest dreams, thought it would all be about giving me an extra $500 which I'll use to buy something from another country out of spite.

I absolutely can not believe this is what the team he assembled came up with. It's just too stupid. And then, you have the deficit hawks (like, again, McConnell) who are screaming about the debt burden "we're putting on our children" which is funny as hell because they were completely unconcerned with deficits and debt from 2001 until now. But still, let's look at this burden.

We are going to finance job creation and infrastructure improvement (which will hopefully be much more robust than currently envisioned) at historically low rates. That's right, folks, people are effective PAYING the Federal Government to take their money. Why? Because in a deflationary spiral, where everything loses value, your focus changes from making money to just preserving. And the way you do that is in government securities.

Sure, we'll have to pay this money back but we're paying for it at a rate of interest that's less than long term inflation. It's free money and we'd be stupid not to take it. The hawks, Democrats and Republicans both, ARE COMPLETELY IGNORANT OF MODERN FINANCE. Frankly, they're almost as stupid as the asshats bleating on about tax cuts as a panacea.

The bottom line is that what's being proposed here is like crushing up glass and putting it in a meal. Sure, it'll fill you up and you won't be hungry, but within an hour or so you're going to be shitting blood.

Posted by mcblogger at January 7, 2009 10:52 AM

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