Speaker Nancy Pelosi has released a draft of the proposed stimulus package that is now standing at around $825 billion. It didn’t take too long to grow $50 over what Obama was asking for (read draft here). Needless to say, that in order to get bi-partisanship off on the right foot, she had to make sure to give Bush a parting shot by indirectly blaming him for the current crisis (“Since 2001…” gee, who began their presidency in 2001?). I also found this statement curious:
The economy is in such trouble that, even with passage of this package, unemployment rates are expected to rise to between eight and nine percent this year. Without this package, we are warned that unemployment could explode to near twelve percent. With passage of this package, we will face a large deficit for years to come. Without it, those deficits will be devastating and we face the risk of economic chaos. Tough choices have been made in this legislation and fiscal discipline will demand more tough choices in years to come.
The first interesting point concerns unemployment. In Obama’s economic team’s analysis they said that with a stimulus plan unemployment would rise to 8% and without it, rise to 9%. Pelosi is now saying it could explode to 12%. Can we get on the same page, here? Which is it? The next point is that with the stimulus we will face large deficits for years to come, but without the stimulus the “deficits will be devastating and we face the risk of economic chaos.” So we’re damned if we do, and damned if we don’t because Congress can’t keep themselves from spending more damn money than they take in.
But don’t worry folks, this time (really) there will be unprecedented accountability. Do you feel better? I do. After all, don’t we have Barney Frank to thank for making sure Fannie Mae was fically sound? No? Let’s recap.
- In 2000, then-Rep. Richard Baker proposed a bill to reform Fannie and Freddie’s oversight. Mr. Frank dismissed the idea, saying concerns about the two were “overblown” and that there was “no federal liability there whatsoever.”
- Two years later, Mr. Frank was at it again. “I do not regard Fannie Mae and Freddie Mac as problems,” he said in response to another reform push. And then: “I regard them as great assets.” Great or not, we’ll give Mr. Frank this: Their assets are now Uncle Sam’s assets, even if those come along with $5.4 trillion in debt and other liabilities.
- Again in June 2003, the favorite of the Beltway press corps assured the public that “there is no federal guarantee” of Fan and Fred obligations.
- A month later, Freddie Mac’s multibillion-dollar accounting scandal broke into the open. But Mr. Frank was sanguine. “I do not think we are facing any kind of a crisis,” he said at the time.
- Three months later he repeated the claim that Fannie and Freddie posed no “threat to the Treasury.” Even suggesting that heresy, he added, could become “a self-fulfilling prophecy.”
- In April 2004, Fannie announced a multibillion-dollar financial “misstatement” of its own. Mr. Frank was back for the defense. Fannie and Freddie posed no risk to taxpayers, he said, adding that “I think Wall Street will get over it” if the two collapsed. Yes, they’re certainly “over it” on the Street now that Uncle Sam is guaranteeing their Fannie paper, and even Fannie’s subordinated debt.
- By early 2007, Mr. Frank was in charge of the House Financial Services Committee, arguing that he had long favored some kind of reform. “What blocked it [reform] last year,” Mr. Frank said then, “was the insistence of some economic conservative fundamentalists in the Bush Administration who, to be honest, don’t think there should be a Fannie Mae or a Freddie Mac.” What really blocked it was Mr. Frank’s insistence that any reform be watered down and not include any reduction in their MBS holdings.
- In January of last year, Mr. Frank also noted one reason he liked Fannie and Freddie so much: They were subject to his political direction. Contrasting Fan and Fred with private-sector mortgage financers, he noted, “I can ask Fannie Mae and Freddie Mac to show forbearance” in a housing crisis. That is to say, because Fannie and Freddie are political creatures, Mr. Frank believed they would do his bidding.
So, I for one am really glad that we will now have A Recovery Act Accountability and Transparency Board, to keep an eye on things. Whew, I was concerned there for a minute.
What’s Included in the Package
- Clean Efficient, American Energy
- Transform Our Economy with Science and Technology
- Modernize Roads, Bridges, Transit and Waterways
- Education for the 21st Century
- Lower Health Care Costs
- Help Worker’s Hurt by the Economy
- Save Public Sector Jobs and Protect Vital Services
- Tax Relief
Clean Efficient, American Energy
“To put people back to work today, and reduce our dependence on foreign oil tomorrow.” Wow, sounds like, Drill Here, Drill Now, doesn’t it? Not a chance. Oil drilling is no where to be seen. After over 1 million signatures on a petition to tell Congress to stop blocking our ability to drill for our own oil, Congress agreed, until the election that is, and then nothing more. Also, nothing about nuclear energy either.
What is included:
- Reliable electric energy grid — $11 billion
- Renewable energy loan guarantees — $8 billion
- Renovations and repairs to federal buildings, including energy efficiency — $6.7 billion. Why are our federal buildings in such need of repair? Why hasn’t Congress been maintaining them?
- Local government energy efficiency block grants — $6.9 billion. This is taking money out of the left pocket and putting it in the right pocket. The federal government’s money comes from individuals and businesses in all fifty states. Why do we send our money on a round trip ticket to Washington, only to have our local politicians grovel to get it back?
- Energy Efficiency Housing Retrofits for HUD sponsored housing — $2.5 billion
- Energy Efficiency Research and Development — $2 billion
- Advanced Battery Loans and Grants — $2 billion. I’ve got a better idea. Do you want to see innovation in battery and energy efficiency? Eliminate the Capital Gains tax. It will boost the stock market and bring in a lot more investment in new technologies
- Energy Efficiency Grants and Loans for Institutions — $1.5 billion
- Home Weatherization — $6.2 billion. That’s $20 for every man, woman, and child in America. Does every house in America need weatherization or is this a but much?
- Smart Appliances (rebates for new appliances) — $300 million
- GSA Federal Fleet (replace older vehicles with alternative fuel vehicles) — $600 million. Are they saying that today the Federal Government buys inefficient vehicles?
- Electric Transportation (new grant money to encourage electric vehicle technology) — $200 million. Did any of these politicians go to the Detroit Auto Show? It was chock full of electric vehicles. Didn’t we just give GM and Chrysler $14 billion? Are we saying they need another $200 million for encouragement?
- Cleaning Fossil Fuel — $2.4 billion
- Department of Defense Research — $350 million
- Alternative Buses and Trucks for state and local governments — $400 million
- Industrial Energy Efficiency for demonstration projects — $500 million. There are dozens of things we can do to improve Industrial energy efficiency. We need demonstrations?
- Diesel Emission Reduction — $300 million
That’s just the energy piece of the package. With regard to the renewable and efficiency spending on government buildings, there should be a reduction in energy costs going forward. Are the operating budgets for those buildings going to be reduced in future budgets to reflect the savings or is that money just going to be diverted to other uses?
It seems to me that we could get a lot more stimulus with some immediate tax breaks and if the problem with the economy is a lack of credit, perhaps loan guarantees is a better way to go. Having the government pick winners and losers, or set dollar amounts on each of the slop troughs, just opens the door to lobbying, corruption, and mismanagement. Who gets the money? How is it determined? Who gets to decide?
Tax cuts are there for everyone. As I have said many times, to me, many of our problems have been caused by the government. The government is not the answer.
