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Visual impairment: The cost of socialist intervention so far

Today's Financial News - Posted February 9, 2009

At a current tally of close to $10 trillion, government spending on “fixing” the economy shows little effect. We wonder why…

 

by J. Christoph Amberger

Baltimore—TFN: “What an incredible article,” writes TFN eNews subscriber Gary H. in response to our “Hope and Change in Action: How government-directed business stimulus looks like”.

He continues: “As an American living in ’socialism light’ Canada, I see the suffocating, dependent-making results of big government daily. Your newsletter is a breath of fresh air…”

Thanks, Gary. We try to do our civic duty… even though the idea that socialism does not automatically become beneficial if it is propagated “eloquently” by an Administration endorsed by Oprah makes us downright un-American these days!

An article by Mark Pittman and Bob Ivry that was published on Bloomberg.com today tallied up the cost of government intervention in the economy so far: “The stimulus package the U.S. Congress is completing would raise the government’s commitment to solving the financial crisis to $9.7 trillion.”

“The $9.7 trillion in pledges would be enough to send a $1,430 check to every man, woman and child alive in the world. It’s 13 times what the U.S. has spent so far on wars in Iraq and Afghanistan, according to Congressional Budget Office data, and is almost enough to pay off every home mortgage loan in the U.S., calculated at $10.5 trillion by the Federal Reserve.”

"Let them eat bait!" — $10 trillion in government bailout hasn't exactly bought filet mignonI might also point out that this sum is quite close to my own “U.S. bailout” proposal here in the eNews… to cut every man, woman, and child a check for $30,000… with the condition that half the money has to be spent servicing debt. That would prevent some (but not all) home foreclosures, jump-start car sales and new home purchases, raise net worth, get the consumers consuming, manufacturers manufacturing, and services servicing. Plus, sales and income tax revenues would allow communities again to squander money on all kinds of non-productive venues.

But of course, that solution would be way too simple and direct.

Instead, I open our local newspaper’s financial sections to such useful articles as “Save with your library card.”

The Baltimore Sun’s Jay Hancock wrote last Friday: “The movies you rent. The books you buy for $25 and $35 apiece. The video games costing $50 and more. Barney DVDs. They’re often at the library, in most cases for free. The Baltimore County Public Library might be exaggerating when it estimates you can save $2,432 a year by using your library card instead of your VISA card. (It figures adults spend $450 a year just on books.)”

Good advice for the newly frugal. But I would’ve chosen a different title for the article. Something like “Not quite dead yet: How you can put your local bookseller, video rental place, and software store out of business, too. So they, too, can join the government breadline and call for Change.”

Make that “change,” lower case.

*** Meanwhile, Nissan and Toyota Motors are bringing the belated proof that the Congressional panels interrogating U.S. car industry executives last year had it wrong, too. While they were haranguing Ford, GM, and Chrysler for building vehicles they had demand for… SUVs and light trucks… the oh-so-much-smarter and greener Japanese manufacturers were experiencing the same plummeting sales as anyone else.

Nissan Motor Co. posted its first loss in nine years and now expects to lose $2.91 billion for their fiscal year ending March 31. U.S. sales plunged 31 percent in January.

Last week, Toyota Motor Corp. had announced that its loss will be three times greater than earlier estimates. Honda Motor Co. has cut its full-year net income forecast by 57% while Mazda, Mitsubishi, and Fuji Heavy Industries have all announced full-year losses.

Looks like it wasn’t the lack of supply of politically correct vehicles that did U.S. car manufacturers in after all… but consumer fear to commit large amounts of money to replace old cars with new.

In the thought pattern of the New Order, the solution is to have city contractors renovate schools and state road crews lay asphalt. At the same time, what we Germans call Neidgesellschaft (”society built on envy”) is going into warp drive, capping the discretionary spending of those who have a history of frivolous and indiscrete spending on high-ticket items and ostracizing companies for pumping taxable revenues into the economy. Like private airplane purchases.

It would be funny. If it weren’t just so dumb.


Next Article: Stimulus Bill contains Stealth Program for socialist healthcare reform

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Posted by J. Christoph Amberger · Filed Under International Investing 

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