The Price of Liberty is Eternal Vigilance
Shrimp 'n Grits
The Stimulus Bill Ė Words! Just Words!Lee Walton
As this nationís fledgling president prepares to sign a nearly $800 billion economic stimulus package in response to the growing world-wide financial crisis, itís timely to review the relative success of Congressís most recent stimulus attempt, the much touted Troubled Asset Relief Program, TARP -1, intended to save the nationís largest banks from impending financial collapse. If the downward paths of Bank of America and Citigroup are any indication of bailout success, the current Stimulus Bill will provide much more hurt than help.
Each of these pillars of national finance received $45 billion in TARP -1 money last fall, and each is now valued at less than what they borrowed! Bank of Americaís pre-TARP value was $159.7 billion; its current value is a shocking $37.1 billion. Citigroupís post-TARP fall from grace mirrored its larger rival as its value fell from $110.4 billion to its current $22.9 billion. If the next round of TARP negotiations and loans are as fruitful as the last, Congress and the new fledgling president will likely end up having to nationalize our banking system. Our nation will be fortunate to survive if the fall-out of the current Stimulus Bill mirrors that of TARP Ė1.
The Obama-Pelosi Stimulus Bill being signed into law this week will be the largest government-spending bill in U. S. history. Unfortunately for the currently unemployed and countless thousands to soon follow, this bill is not stimulus legislation, but rather truck loads of borrowed money being thrown at social programs and redistribution efforts that Congress has debated for years, albeit now cloaked in seemingly beneficial arguments that the federal government and new president are finally doing something for the good of the economy. Tragically, the failure of previous stimulus legislation and bailout efforts is now being used as rationale to justify more of the same deficit-funded attempts that are likely doomed to failure.
Leading economists have long maintained that government intervention cannot effectively stimulate long-term private sector economic activity, but only redistribute wealth and income from the private sector. Such action tends only to create an inefficient nationalized economy in which the private sector must struggle to compete for scarcer resources while simultaneously paying for governmentís meddling economic folly. If stimulus efforts are deficit-funded, to succeed, that cost must be offset by newly created wealth from private sector activity that does not have to be paid back as future taxes; to do otherwise would be counterproductive to the objectives of creating new wealth in excess of stimulus cost.
Regrettably, our nationís new president and current crop of far left-wing, socialist-leaning congressional leaders seem only to be motivated by long denied socio-political objectives, pent-up partisan frustrations, and countless slabs of pork earmarked for special interests. This is their chance, and theyíre going for broke. Tragically, they may break this nationís financial back in the process.