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Obama Goes 'Japanese' — $447 Billion Of New Infrastructure Spending
This article originally appeared in the Daily Capitalist.
The President just finished his jobs speech and I can report with high confidence that it won't move the needle. In my article last week, "Unemployment Will Remain High Because Obama Will Do All The Wrong Things" I said that Obama would:
I suspect that President Obama in his speech this week will come up with the same remedies that his Administration has been proposing before, but repackaged to make it sound like bold new remedies. More tax breaks for employers, more “focused” spending on infrastructure, job training programs, and green jobs.
And that is exactly what he is proposing in his American Jobs bill that he announced tonight. He proposes to extend the payroll tax cut (50%) for another year, give more tax incentives to businesses hiring workers or raising workers' wages, and spend massively on infrastructure. He didn't exactly say "how much" spending, but reports are saying $447 billion. An outline of the bill can be found here. It is a piece of liberal trash and I urge you to read it, but not on a full stomach.
He made it sound exciting as if they were really doing something but not really. It all sounds very familiar. He proposes a lot of tax incentives or spending for specific classes of workers: companies hiring veterans, hiring workers jobless for more than 6 months, summer jobs next year for disadvantages kids, hiring more teachers, continue tax breaks for "average working famlies", some kind of incentive or penalty for corporations hiring workers in America, not abroad, and a mortgage refi incentives.
The President certainly made all the new spending sound exciting. We're going to have first class airports (a snub at the Chinese), great bridges and roads, first class schools. We're going to be a powerhouse based on all this useless spending. Look, I know there are lots of potholes on the roads, but are trucks having a problem getting goods to us?
How to pay for it? He noted the new budget deal cuts $10 trillion in the next ten years, plus another $1 trillion next year in cuts determined by the Congressional "Super Committee." He said we need to pass it right away but not let it add to the deficit. He proposed "cuts" in Medicare, Medicaid ("reform our health care system to strengthen Medicare") but he didn't offer anything beyond that except that "we've got to work together." He also proposed tax hikes for the wealthy and corporations. First of all he said even Warren Buffet agrees he should pay more taxes. Then he said we need to reduce corporate taxes and then he said we need to get rid of corporate tax loopholes. I don't know how you can lower taxes by raising taxes.
This is the Japanese approach to economic recovery. They spent trillions and have a first class wasteful infrastructure and a stagnant economy. The idea that you can spend more and cut the budget is a fantasy. My guess is that they will have some CBO or OMB study saying it's feasible, but the "cuts" will all be back-ended – if they are real at all.
He made a big pitch for the role of government in the economy and how, starting with Lincoln, the partnership of government and business made America great. "Where would we be without our colleges?" he asked. Ask Harvard or Stanford, maybe they know. To the Tea Partiers in the audience he asked, "Do we dismantle government and say you are on your own? That's not what America is. Yes we are a country of rugged individualism but we are also all connected as a people."
This is one of the things I really dislike about the guy. He trivializes the opposition. It's one of those "well, everyone knows ..." kind of put downs, well ... on you if you read this blog. It's like "economist's say ..." as an answer to you wack jobs who don't buy Keynesian economics.
This speech is another liberal fantasy by President Obama. He is clueless and apparently desperate because he cannot come up with anything that works. I wonder what he would say to the question, "why hasn't the $830 billion Recovery Act spending worked to create jobs as you said it would?" You are witnessing first hand the further destruction of our economy because this new spending will add debt upon debt to no economic gain. And to be clear, it is the failure of Keynesian economics on a grand scale.
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Spending on the wrong things me thinks.
New Nuclear to free up natural gas for uses other then electricity production.
High speed rail to replace city air routes in the 300 to 1000 KM range.
Increase Tram network density in the more rational cities.
Replace the long distance trucking network with nodal rail depots / light truck distribution.
Of course this will not work unless there is a dramatic change of tax policey - taxing Cars and the fuel that they use I am afraid.
Concrete & Cars is so 20th century.
If this is not done with much elan the monetory structure will have to change - maybe these guys really want debt free money ?
Only see 50 Billion ....... also 10 billion bank which may multiply to 100 billion ?
So 150 Billion at best !!!!!!! in a economy the size of the US !!!!!!
Obama wants to deindustrialize the country by introducing tax cuts into a physical economy that does not have the energy intensity to absorb the new consumer spending.
The tax cuts of the 80s was in a era of a global oil glut when long term capital projects were cut to sustain short term consumption - now America can no longer maintain even short term consumption.
A complete willful ignorance of energy and its fundamantal role in a economy.
John Holdren and his fellow malthusians are all over this spastic policy
Quit hoping and get ready to fight zombies. Nothing will save this turd sandwich now. It's the needle and the damage done my friends. The last freebase, the shot between the toes since all the arms and legs are tracked. It's the three blown out veins before the opiate mindfucks the masses. You think we hit bedrock? Fuck no. We're finding a new rock bottom so grab a shovel and dig. First you suffer some blowback from misallocation of capital. Then your capital becomes meaningless as you economy suffers permanent damage to the blowback. Then you dry up and blow away if you can't stop, AND YOU CAN'T STOP FOOLS.
If Obama was white, he would have been impeached a long time ago. His lying and devious ways go un reported by main stream liberal rags because they fear imaginary retribution from the likes of Jackson and "the black community". Give me a break."You lie down with dogs,you get up with fleas."
This is a shit article, Although i agree on the point of the impotence of this bill, not because im against it, but because its way too small to do its main job.
Trust an Austrian economic zealot like this writer to pick a fight even to altruistic spending for important public infrastructure like schools, publics roads, etc.
The "Free market" idealogy has not worked, and never will. What makes you think this time it would be different?
You know this pathetic thing is going to fail. Misallocation of more fake capital won't get you prosperity, innovation or hard work. It's the last piece of candy on halloween night before the gal vomits all over her bedsheets. It's the 23rd half drunk beer in a case between two frat boys. It's a BIG FAT NOTHING like your president and your union. Your economy is done and your brainless dogma won't fix it.
So how would you fix the economy? Cut taxes? Decrease regulations? Or like all Austrians do nothing & hope for the "Laissez Faire" free markets to do its job, We've been doing so long, its amazing people like you seem to think its still going to work, empirical observations will tell you emphatically NO IT WONT WORK! So its you who's ruled by idiotic dogma, not me.
Dont get me wrong, this bill is a step in the right direction, but its way too small to be doing its main job, we need trillions not billions to fix the economy, This money should be borrowed from the fed for 0% credit, These banks should stop getting 0% credit from the fed, All they will do is speculate with this money which excerbate the problem. The government should create another WPA (Work Progress Adminstration) This should put tens of million unemployed workers back to work,
This is whats needed! Not Laissez Faire stupidity, which has never worked, unless you're some rich parasite.
DOUBLE POST
Why does everyone rag on Japan? Two "lost decades" later, the streets of Japan are still the safest in Asia (if not the world) and there's far less real poverty there than in America.
If becoming Japan is America's fate, then I say bring on all the giant airports on man-made islands that we can borrow for!
Never mind the three reactor meltdown spewing toxic into the air and ocean. I'm not an environment hugger but even I know a huge phucking mess when I see one.
And that meltdown was totally related to Japan's economic policy!
Awesome ...Americans must be really impressed with Obamas somewhat predictible response, to piss away yet more money after the last $4 Trillion proved such a 'success'
President Delusional-Marxist-Retard is ahead of the curve, Govt intervention in the economy we all know is such a 'winner' so just hold your breath (or pinch your nose) for this latest brand of Charlatan perfume (stinker) to refresh the US Govt vandalised economy
I had a passionate comment here, but you know what? Let it all fail. Not like I have to do anything, these idiots in office will let it all go to hell without my input.
How long can they pretend everything is okay? Probably up to the point they are being choppered to their private enclaves, I'd guess.
Usually available here, but not accessible tonight for some reason:
http://penelope.uchicago.edu/Thayer/E/Roman/Texts/Rutilius_Namatianus/home.html
here is the google cache:
http://webcache.googleusercontent.com/search?q=cache:I3F5HLxrXC8J:penelope.uchicago.edu/Thayer/E/Roman/Texts/Rutilius_Namatianus/text*.html+Rutilius_Namatianus&cd=3&hl=en&ct=clnk&gl=us
Rutilius Namatianus' poem De reditu suo describes the author's journey from Rome back to his home in Gaul in the autumn of the year 417. He describes the Tuscan coast, the ruins, the depopulation, the vanishing of the Roman world as he sails past.
I had a Latin language instructor who was for all intents and purposes a defrocked monk who had gone classical 5th century Nihilist... he assigned us to translate the entirety, ...
I can't help feeling I"ve travelled through the modern equivalent as I drove through Appalachia the last three summers.
THe only reason the roads were paved is due to fiat currency, if not for the population still believing in the value of the US Dollar, there would be no crews of free men repaving those highways.
America already has the most roads, bridges, etc.
We need to really build more/repair?
not that i agree with the bill, but are you really questioning whether or not we should repair bridges, cause that seems like a good idea not by these means but ....really?
Taxes and fees are levied to maintain bridges & roads already.
Around 50 cents per gallon federal fuel tax. Then you have state tags, licsensing, tolls etc. The problem...again...is not how much "revenue" they are raising...its how they are allocating it.
They are simply too top heavy...the money is wasted on buildings, air conditioning, paper pushing, pensions, vehicles etc. instead of concrete & asphalt.
Well, the states are so flush with money, let them fix their roads and bridges. Or, contract out all that, pay toll fares to get anyplace - you got the cash, right?
I do NOT agree with all what and where Obama said the $447B should go to - it seems to be targeting pet projects of the GOP. Which, incidentally, a whole lot of what he as proposed have been pet projects of the GOP, until he came into office. I know, I know - you think I'm an Obama lover - not really.
But holy shit, can we get off the party line to try to fix this problem? Really, more deregulation is the cure, after Wall St? Oh, that's right, Socal cant ring in right now - love deregulating electricity providers. FEMA? Screw them, they are worthless - until Rick bitches about them not helping, after he's cut the budget over 30% to fight the fires here.
You can't have it both ways - ask all the people who just got burned out in Austin. Everyone wants tax cuts - yeah, those tax cuts for the 'wealthy have really produced lots of jobs in the last 10 yrs. Bush's tax cuts, had they expired, would have greatly helped lessen the deficit - continue them? Only if you're insane.
No creditor of the US was willing, and still is not, to call for drastic measures. The only ones who brought it up was the Tea Party. It's like your neighbor butting in to tell your creditor that you might be a tad bit of a worry about paying your credit card bill. If the creditor isn't worried about you - why should you suddenly freak out?
Yeah, paper chase, but with paper tigers.
But put a Republican into the White House, and you are guaranteed a couple of things:
A new war, probably Iran, and can you please charge that?
And, hello, Wall Street, baby - we're back - deregulate, and let the cards fall where they may!
(btw, gold is overpriced)