Tag Archives: Dependency

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Democrat Steny Hoyer: unemployment checks and food stamps stimulate the economy

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Why are we in a recession? Maybe it’s because the people running the country believe that unemployment checks and welfare are better than earned paychecks for “stimulating” the economy.

Here’s CNS News to explain what Democrats are trying to achieve:

House Minority Whip Steny Hoyer (D-Md.) said Tuesday that food stamps and unemployment insurance are the two “most stimulative” things you can do for the economy.

During a pen and pad briefing with reporters on Capitol Hill, Hoyer was asked if any Democrats are “reconsidering the wisdom” of letting the Bush tax cuts expire at year’s end for the top income earners given the still struggling U.S. economy.

“I haven’t talked to any who are of that mind,” said Hoyer. “If you talk to economists, they will tell you there are two things that are the most stimulative that you can do — one’s unemployment insurance, the other’s food stamps, okay?”

“Why is that?” he said.  “Because those folks who receive those resources must spend them. And they’ll spend them almost upon receipt. Most economists with whom I talk believe that those with significant discretionary income, that that’s not the case.”

Unless action is taken by Congress, the Bush tax cuts will expire on Jan. 1, 2013.  Originally enacted in 2001 and 2003, President Barack Obama and Congress renewed the cuts for all income-brackets for two years in 2010.

[…]The Congressional Budget Office (CBO has projected that if the Bush tax cuts are allowed to expire at the end of 2012, coupled with the defense cut sequester, it will lead to a 1.3 percent contraction in GDP after Jan. 1, 2013.

If the Bush tax cuts are allowed to expire, it is expected that 710,000 people will lose their jobs. This will achieve the Democrats goal of “stimulating the economy” with higher unemployment and more food stamps. This continues the Democrat plan of increasing the record number of people on welfare and food stamps. They will pay for this “stimulus” by adding more debt to the $8 trillion they have already run up since January 2007. The debt will be paid by young people and children. The real plan behind making millions of people dependent on government is, of course, to be able to buy their votes and to control them. Democrats are the anti-freedom party. You have too much freedom when you have a job. It leads to “inequality”. If everyone received their daily bread from the government, and rode on mass transit to labor camps instead of driving in cars, and slept in identical apartments with identical furniture and identical television programs to watch, then the world would be more equal. And equality is what Democrats want most.

So what is the Republican alternative plan for the economy? To let job creating businesses keep their own money and hire people to do work. Republicans want to stop taxing and regulating job creating businesses so that people can be put back to work, and have the confidence to spend money. That’s how you stimulate the economy – we know this because it has worked for Reagan and Bush before. Obama’s approach has never worked. The Democrats have been running the show since January 2007. And that’s why we are down 5 million jobs since Steny Hoyer became the House Whip in January of 2007. This is not going to end until the Democrats are voted out.

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Obama ends welfare reform and calls for $12.7 trillion of new welfare spending

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From the Heritage Foundation explains the 1996 Welfare Reform Act and its detractors.

Excerpt:

Last Thursday, the Obama Administration quietly issued new bureaucratic rules that overturned the popular welfare reform law of 1996. This was an illegal move, and it completely undoes years of progress that helped millions of Americans.

The 1996 reform replaced the old Aid to Families with Dependent Children (AFDC) program with a new program called Temporary Assistance to Needy Families (TANF). At the core of the TANF program were new federal work standards that required able-bodied welfare recipients to work, prepare for work, or at least look for work as a condition for receiving aid. Welfare reform turned “welfare” into “workfare.”

Under the old, pre-reform AFDC program, welfare was a one-way handout: Government mailed checks to recipients who did nothing in return. Reform changed that. The new TANF program was based on fairness and reciprocal responsibility: Taxpayers continued to provide aid, but beneficiaries were required, in exchange, to engage in constructive behavior to increase self-sufficiency and reduce dependence.

The TANF work requirements were not onerous. Under the law, some 40 percent of adult TANF recipients in a state were required to engage in “work activities,” which is defined as unsubsidized employment, subsidized employment, on-the-job training, attending high school or a GED program, vocational education, community service work, job search, or job readiness training. Participation was part-time, 20 hours per week for mothers with children under six and 30 hours for mothers with older children.

[…]As welfare dependence fell and employment increased, child poverty among the affected groups fell dramatically. For a quarter century before the reform, poverty among black children and single mothers had remained frozen at high levels. Immediately after the reform, poverty for both groups experienced dramatic and unprecedented drops, quickly reaching all-time lows.

None of this reduced the left’s antipathy for welfare reform. The left had strongly opposed work requirements in welfare in 1996. When TANF faced reauthorization in 2001, they again aggressively sought to repeal federal work standards; they repeated the attack in 2006. For the most part, they lost those battles. But they were not done.

[…]Having lost repeated legislative battles to abolish workfare, the left has now gone backdoor, using an arcane bureaucratic device called a section 1115 waiver to declare the actual work standards written in the TANF law null and void and grant federal bureaucrats carte blanche authority to devise new replacement standards.

Now that we are in an election year, I expect to see a lot of promises by the Democrats of more and more handouts, bailouts and rewards to all of their various constituencies. And all paid for by the job creators in the private sector, and their hard-working employees. After all, “the private sector is fine” and “if you’ve got a business — you didn’t build that.  Somebody else made that happen”.

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Moody’s downgrades credit rating of 26 Italian banks, Spain is next

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European Debt to GDP and Credit Rating
European Debt to GDP and Credit Rating

From Yahoo News.

Excerpt:

Moody’s Investors Service has downgraded the ratings on 26 Italian banks as they struggled with the effect of government austerity measures.

The rating agency said Monday that the banks are suffering because Italy is back in recession and government austerity measures are cutting demand for loans.

The banks are struggling with more loan losses, limited access to funding and weaker profits.

Moody’s noted that support of the European Central Bank lowered the default risk of many banks.

Its outlook for all 26 banks is negative.

From the Wall Street Journal.

Excerpt:

The ratings for Italian banks are now among the lowest within advanced European countries, reflecting these banks’ susceptibility to the adverse operating environments in Italy and Europe, Moody’s said in a statement. Two of the country’s largest institutions, UniCredit SpA (UCG.MI, UNCFF) and Intesa Sanpaolo SpA (ISP.MI, ISNPY), were included.

Moody’s move came hours after the firm raised an alarm on Spain, arguing the country’s banks remain vulnerable even after Madrid moved to increase the banks’ cushions against potential losses from real-estate loans.

[…]Italy, saddled with EUR1.9 trillion ($2.44 trillion) debt, has signed onto the EU’s fiscal compact that sets strict limits on the country’s deficit levels. In recent weeks, Mr. Monti has begun pressing Germany to give Italy more fiscal slack to stimulate its economy and create jobs. Mr. Monti has recently proposed that the EU create special exemptions to the budget rules when countries target their public spending on projects like broadband investments and infrastructure.

Moody’s downgrades come after the ratings firm in February placed various ratings of 114 financial institutions in 16 European countries on review for possible downgrade, highlighting the region’s banks’ vulnerability to the euro-zone sovereign debt crisis.

Moody’s is expected to follow the downgrade of Italian banks by cutting the ratings of Spanish banks. By the end of June, more than 100 European banks, as well as Wall Street giants like Bank of America Corp. (BAC) and Citigroup Inc. (C), are likely to have ratings that are at least one notch lower.

[…]Moody’s also alluded to J.P. Morgan Chase & Co.’s (JPM) recent disclosures of more than $2 billion in trading losses as a reminder of potential problems lurking at some European banks.

“Recent events highlight the risks for creditors from potential weaknesses in governance, controls and risk management, especially at some smaller, privately-held banks,” Moody’s said in its news release.

Moody’s says it will conclude its reviews by the end of June. In coming weeks, major U.S. financial institutions, Bank of America Corp., Citigroup Inc., Goldman Sachs and Morgan Stanley are likely to face downgrades.

Banks in Austria and Sweden are expected to see downgrades after Spain.

Italy’s debt is $2.44 trillion, ours is nearly $16 trillion.