Tag Archives: Government Spending

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How Obama rewards Democrat special interest groups

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One way to reward your favored special interests is to exempt them from the taxes that everyone else has to pay.

Consider this article from CNS News. (H/T ECM)

Excerpt:

President Barack Obama on Thursday announced a plan to impose a new tax on banks to cover an expected $117 billion shortfall in the Troubled Assets Relief Program (TARP). The tax would apply to 50 financial institutions, which have assets of more than $50 billion, and would constitute a 0.15 percent tax on the TARP liabilities of these institutions.

However, auto companies General Motors and Chrysler, which are not expected to pay back all of their $66 billion of TARP money, will not be subject to the tax. Also exempted from the tax would be mortgage institutions Freddie Mac and Fannie Mae, which are largely responsible for the financial meltdown in 2008.

What do you suppose that businesses do when the government tells them to pay more taxes? Well, they just pass that on to their consumers.

But there’s more.

Consider this article from the Heritage Foundation. (H/T ECM)

Excerpt:

After a long-week of negotiations, unions have won an exemption from the excise tax on high-cost “Cadillac” health insurance plans. The excise tax would fall on health insurance plans that cost more than $8,500 for individuals and $23,00 for families (the union deal reportedly slightly increases these thresholds) starting in 2013. It is one of the many tax hikes proposed by Congress to partially offset the cost of its take over of the health care system.

Obama’s union supporters are getting exempted from another tax that will be paid by non-unionized workers.

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Unemployment for young Americans surges to record high of 52 percent

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Here’s a story from the New York Post. (H/T Gateway Pundit)

Excerpt:

“The unemployment rate for young Americans has exploded to 52.2 percent — a post-World War II high, according to the Labor Dept. — meaning millions of Americans are staring at the likelihood that their lifetime earning potential will be diminished and, combined with the predicted slow economic recovery, their transition into productive members of society could be put on hold for an extended period of time.”

“The number represents the flip-side to the Labor Dept.’s report that the employment rate of 16-to-24 year olds has eroded to 46.6 percent — the lowest ratio of working young Americans in that age group, including all but those in the military, since WWII.”

And they’ll have to pay for the trillions that Obama is adding to our national debt, too.

Remember, young people really liked Obama during the election:

I’m thinking that those young people should be more careful about considering a politician’s voting record instead of listening to their government-funded public school teachers. It seems to be that government-run public schools will always indoctrinate children to vote for bigger government, and that means higher unemployment in the private sector, especially for entry-level job-seekers. Maybe the young people didn’t think that far ahead, but then they should be more cautious about forming opinions without asking their parents for input.

You may also be interested in a wonderful video linked here that shows several prominent Democrats assuring us that the stimulus bill was needed to create millions of jobs and keep unemployment below 8%. They don’t understand economics – they’re Democrats. The know less about economics than my keyboard. If young people want to learn about economics, then they need to read Thomas Sowell and Walter Williams. Those are the two greatest living economists, and they teach economics so that regular people like me can understand.

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Why the mortgage cramdown bill would hurt consumers

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The Democrats are pushing a “cramdown” bill which is a bill designed to allow federal judges to renegotiate the terms of delinquent mortgages when the person who entered into a contract to borrow the money cannot repay it. The problem with this bill is that it hurts the very people it is intended to help – because as soon as banks see that they cannot rely of the courts to enforce contracts, they will immediately stop making loans to those with mediocre credit ratings. So, the people who most need to borrow money will be the hardest hit. And it opens the door for the government to then seize control of the banks and force them to make the loans, so that we turn into Venezuela.

Consider this article from the Heritage Foundation:

Just as the housing market is showing definite signs that it is stabilizing after a lengthy drop in housing prices, the House of Representatives is about to vote on proposal that would destabilize it once again while also raising the cost of mortgages for future home buyers.

The proposal – to be offered by Rep. John Conyers (D-MI) as an amendment to the financial regulation bill now before the House -would allow bankruptcy judges to reduce the principal owed on a mortgage, a practice often referred to as a “cramdown.” Judges would also be able to reduce interest rates or lengthen the term of the mortgage.

This is a huge policy mistake that would help only a few people while raising the cost of borrowing for thousands of moderate-income and first-time homebuyers.

Fortunately the bill failed to pass, but it does show you the fatal flaw of Democrat emotion-based policy-making. They hurt the very people they are trying to help – the cause the very crisis they are trying to alleviate. That is standard operating procedure for Democrats. They don’t understand the incentives they are creating when they pass “compassionate” laws.

Democrat secures TARP funds for unemployed homeowners

On another subject, take a look at this AP article. (H/T Michelle Malkin)

Excerpt:

Call it the $6 billion boycott.

By boycotting a key House committee vote last week and threatening to abandon support for banking regulations, members of the Congressional Black Caucus got $4 billion added to a Wall Street regulation bill and $2 billion to a proposed House jobs bill in spending they sought for African American communities.

House Financial Services Committee Chairman Barney Frank, D-Mass., this week inserted $3 billion to the legislation to provide low-interest loans to unemployed homeowners in danger of foreclosure. He added $1 billion for neighborhood revitalization programs.

The money would come out of the $700 billion financial rescue fund.

“For those of us who walked out, it was absolutely essential that we have parts of that legislation directed toward helping people who have been left out of all of these bailouts,” Rep. Emanuel Cleaver, D-Mo., one of 10 black caucus members in the Financial Services Committee, said…Among the caucus’ demands were greater assistance for minority-owned auto dealerships and banks that lend in African-American communities and more government advertising in minority-owned media.

This is taking money out of the private sector, which creates jobs, and bailing out people who bought too much house. Taking money out of the private sector destroys economic growth. And that is why we have a 10% unemployment rate.