Congress continues to write checks on our behalf

The House (mostly Democrats) just passed a $26 billion "emergency" bill to attempt to save their butts from political ruin in November:

Summoned back from summer break, the House on Tuesday pushed through an emergency $26 billion jobs bill to protect 300,000 teachers, police and others from election-year layoffs. President Barack Obama was to sign the measure by day's end.

Lawmakers streamed back to Washington for a one-day session as Democrats declared a need to act before children return to classrooms minus teachers laid off because of budgetary crises in states that have been hard-hit by the recession.

Republicans saw it differently, calling the bill a giveaway to teachers' unions and an example of wasteful Washington spending that voters will punish the Democrats for in this fall's elections. The legislation was approved mainly along party lines by a vote of 247-161.

The aid for the states is to be paid for mostly by closing a tax loophole used by multinational corporations and by reducing food stamp benefits for the poor.

House Speaker Nancy Pelosi said the bill was being immediately sent to the White House so Obama could sign it into law. Obama, joined by teachers at a Rose Garden ceremony earlier in the day, said, "We can't stand by and do nothing while pink slips are given to the men and women who educate our children or keep our communities safe."

Uh-huh. So, what happens next? What if the economy doesn't improve over the next year? Then what? More "emergency" bills signed for the benefit of the public service unions while those of us without union cards get stuck with the bill? Jeez.

BTW, this is yet another example of the failure of the "stimulus" package. It has done little to get our economy rolling again. I swear that we are all better off when congress is away on vacation where they can do little damage to the public finances.

Around The Horn...Newsworthy Links And Posts!

1) Good luck in trying to tax the rich to close the deficit.

2) Nearly half of U.S. homes escape taxes.

3) Mortgage rates jump higher as Fed stops buying mortgage-backed securities.

4) Another liberal crusade and another evil chemical that they need to save us from.

5) Milton Friedman on hope.

6) Is the Tea Party like the KKK?

White House, Congress projects record deficits

From AP:

The federal government faces exploding deficits and mounting debt over the next decade, White House and congressional budget officials projected Tuesday in competing but similar economic forecasts.

Both the White House Office of Management and Budget and the nonpartisan Congressional Budget Office predicted the budget deficit this year would swell to nearly $1.6 trillion, a record, and far above the then-record 2008 budget deficit of $455 billion.

But while figures released by the White House foresee a cumulative $9 trillion deficit from 2010-2019, $2 trillion more than the administration estimated in May, congressional budget analysts put the 10-year figure at a lower $7.14 trillion...

...Beyond the 10-year forecast, the nation will face further challenges posed by rising health care costs and the aging of the population, the CBO said. "The budget remains on an unsustainable path" over the long-term and will require some combination of lower spending and higher tax revenues, it said.

Both forecasts see unemployment rising to 10 percent before falling and both suggest growth will return to the economy later this year but that recovery will be slow after the longest and deepest recession since the 1930s

Comment: This is no surprise to fiscal conservatives that have been sounding the alarm since Bush was in office. With the threat of government interventionist policies like Cap and Trade and a massive overhaul of the health care system, the private economy will have to carry a burden that may be so large that any real and sustained growth will be difficult. The article didn't mention anything about inflation which would be another thorn to knead its way into our economy.

The Coming Storm

This video is a Ron Paul political advertisement but I think that it is still relevant. Baby boomers will start to retire in great numbers, they will begin to tap into Social Security and Medicare. Bottom line--The U.S. can not afford these liabilities AND all of the ponzi schemes Obama and the Democrats are proposing for our economy.

Obamanomics and the Dread of Inflation

Greg Mankiw posted the growth forecasts from the Obama administration (in Red) and a competing forecast from a group of private economists (in Blue). It should be no surprise that the Obama administration forecasts are far more optimistic that the "Blue Chip" private forecasters; administrations are notorious for forecasting rosy scenarios when their economic plans are concerned; politics is a strong influence and the Obama regime is no different than other administrations before it.

2009: -1.2% -1.9%
2010: +3.2% +2.1%
2011: +4.0% +2.9%
2012: +4.6% +2.9%
2013: +4.2% +2.8%

Needless to say, I agree with the sober forecast of the private economists. If and when the economy does have some growth, it will be slight and hardly robust due to the massive spending in the public sector. In my opinion, the biggest threat to the economy will be high inflation once there is a return of confidence and some GDP growth. The M2 money supply has been growing at a pace that has never been seen before--the printing presses are working hard printing money in order to pay for all of the bailouts and for Obama's kooky stimulus scheme. This will not end well.

U.S. spending obligations surge

Don’t let anybody tell you that the 110^th Congress hasn’t done anything lately. Oh, they have and big time. They have managed to create the sort of spending from the creation of Federal programs that would make a spendthrift blush. I hope Americans know what they are getting themselves into when they jaunt into those voting booths in November. Because if we get more massive spending programs from the next administration, there’s going to be a lot of financial pain to spread around and it won’t be just for the “rich.”

From CSM: WASHINGTON--The Democratic-controlled Congress and the Bush administration have presided over a surge in new federal spending obligations that may be the most enduring legacy of the 110th Congress.

From new entitlements such as a GI bill for military veterans to recent federal commitments to shore up a troubled housing market, Washington is taking on obligations with long-term consequences for taxpayers. At the same time, critics say, lawmakers aren't exercising the oversight needed to keep these commitments manageable.

"In the last three or four months, the momentum has really built up for more spending," says Michael Franc, vice president of government relations for the Heritage Foundation, a conservative think tank in Washington. "Congress has moved a whole range of bills that take the problem up another notch."

Here are some of the items.

•A new housing law, signed last week, commits the government to backing some $300 billion in troubled mortgages.

•A higher education bill adds $169 billion over the next five years.

•The GI bill that extends education benefits to veterans or their family members will cost $62 billion over 10 years.

•Congress boosted the statutory debt ceiling by $800 billion to $10.6 trillion. That's $4.8 trillion more than it was at the end of 2001. (Read More Here)