Money for Nothing

The Commerce Department released the second revision to first quarter GDP and it is the second time it was revised upward.  Originally it was reported that GDP fell by 6.1%, not much different that the fourth quarter’s 6.3%.  Subsequently it was first revised to 5.7% and the last report pegs it at 5.5%.  So what does this mean?

The Economy Bottomed in 4Q08

These figures point to the economy hitting bottom in the fourth quarter of 2008, which means the economy was already on the mend before President Obama took office.  Since President Obama didn’t take the oath of office until 2/3 of the way through January, and rushing through the stimulus package that nobody read took until the mid-point of the first quarter,  the economy improved without any help from the new president.

Medicine or Poison?

With the massive government spending that the Obama Administration and the Democratic Congress is heaping on us, the other economic data bears watching.  The inflation rate nearly doubled to 1.6% in the first quarter from 0.9% in the fourth quarter.  The unprecedented borrowing that the government is undertaking will drive up interest rates and inflation and may likely kill the recovery.  Again, since the Obama effect has not yet kicked in, we haven’t seen anything yet.

Today, the House of Representatives is poised to pass the most massive tax increase in history with Cap and Trade.  Energy costs will skyrocket so that global temperatures will be curtailed by 0.2 degrees Celsius over the next 100 years.  I’m feeling better already.

Money Down the Drain

$787 billion is being spent to stimulate an economy that is recovering on its own, spread pork across the land, and saddle us with unnecessary debt.  That works out to $2,300 for every man, woman, and child in America.  Add in health care at $1 trillion to $1.6 trillion ($4,700 per man, woman, and child), Cap and Trade that will double the cost of gasoline, heating your home, cooking your food, etc.  When will this stop?  If you still believe that no couples making under $250,000 will see any increases in their taxes, snap out of it! We do not have enough rich people in this country to cover the bill even if we tax them at 100%.

At the state level we are already seeing the mobility of the wealthy.  Maryland slapped a new tax on the rich and then discovered that 1/3 of the rich moved out of the state of Maryland.  So you say, “What are the rich going to do?  Move out of America?”  While you giggle over that one, ask yourself this.  Why did the Beatles all move to America?  If you don’t know the answer to that one go read the lyrics to their song, The Taxman. It was to avoid the crushing tax burden in the U.K.  Don’t think that trend can’t reverse itself.

I’ll see you at the next Tea Party.