Saturday, February 14, 2009

Obama's Pork Pie In The Sky Package

Obama's $789 billion pork and pie in the sky dream rushed through Congress is being sold as an 'economic stimulus' when it is a spending bill which will saddle US taxpayers with massive debt for years to come. As Democrats embark on a huge spending spree for their pet projects, the measures have been slammed as a monumental waste of public cash. Now where have we heard that before? 

The package has been wrapped up in pretty pink ribbon and sold to the American people like soap powder, as the new president pushed through the spending spree with evangelical zeal. 

But disturbingly, there's no bi-partisan support, with Republicans and a handful of Democrats voting against it. As usual the devil is in the detail. 

The 1,071 page, 8-inch-thick stimulus/spending Bill has a welcome $281 billion in tax cuts but that's peanuts. More than a half-trillion dollars is earmarked for government spending on infrastructure, health care bureaucracy and state governments. 

At the heart is whether these measures will dig the US out of deep recession, create jobs and expand the economy. Some think it's garbage.

Borrowing from Winston Churchill, one Republican remarked: "Never have so few spent so much so quickly to do so little."

As the package did its rounds, the wording of the spinners on jobs carefully changed. Now it's 3.5 million jobs "that we look forward to saving or creating." 

The entire mess will eventually cost not $789 billion but $3.27 trillion when $744 billion in debt service and $2.5 trillion in spending over the next 10 years is included. And that will cost every US family almost $10,000 in added debt. 

The monster is full of pork-barrel politics.

$2 billion to Obama's favourite "community" group ACORN, that's accused of voter registration fraud, $30 million to Nancy Pelosi's pet project to restore wetlands and save the endangered salt marsh harvest mouse, another $1 billion for a Prevention and Wellness Fund.

Tens of billions will be spent on high-speed rail lines but only in key politically sensitive areas. And vote-catching broadband for everyone in rural areas

Take away the pork and the dollars left over for small-business tax relief amount to only "about one-third of 1% of the total bill," a mere $3 billion out of a $789 billion package. There are no tax cuts to boost investment.

The bulk of the spending comes not right away when the economy needs a boost, but in the dim and distant future. 

Japan, spent $6.3 trillion on infrastructure in the 1990s and racked up the biggest debt in the developed world. Yet all that spending failed to pull Japan out of its slump.

Sure as eggs is eggs, Obama will have to return to the trough, demanding more taxpayer cash. 

But the Obama administration is betting the relative small amount combining tax cuts with spending on unemployment assistance, social security and the Medicaid health program will stop the economy's spiralling decline. Sure that makes people feel better, but it won't boost the economy. 

Schools would receive $70 billion to prevent cutbacks and repair crumbling schools. There's about $50 billion for energy efficiency programs and renewable energy. It's all starting to sound eerily familiar. 

Many have already pointed out a whole raft of of questionable spending, including a massive Federal health care computer system - modelled on our own disastrous £12.7 billion NHS computer shambles - only bigger. 

Speaking for the first time since his presidential defeat, Republican John McCain said: "This measure contains much that is not stimulative and is nothing short—nothing short—of generational theft since it burdens future generations with so much debt."

Why should anyone care about a reckless spending spree across the Pond which will plunge the nation deeper in debt? Because that's exactly what Brown and his hapless chancellor are planning over here, as they face up to disaster in the June elections. 

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