Stimulus or No Stimulus?

Education

• Expanding the FAFSA Pell Grant program at a time when a frozen credit market is preventing millions from going to school is an absolute necessity.  I've always said, if they banks don't lend to students and the U.S. Government refuses to bail the students out, our economy will never recover because there won't be an educated people to push its recovery.  That is why I support $15.6B to the Pell Grant program.  Impoverished people used to rely on loans as well as government aid to go to school but this crisis has taken away their loans.
• Within education is the $56B in state aid that Sen. Collins and Sen. Nelson agreed upon (Nelson implied that the cut was not for himself but for Collins, Snowe and Specter on the Rachel Maddow Show).  This will prevent layoffs of teachers and might be used to also prevent layoffs of police and firefighters.  It will save (or create if people have already been laid off) a great deal of jobs.
• $26B will go to local school districts.  Not to belabor the point, education spending is stimulative.

Healthcare

• Doctor's handwriting used to be a joke...until it started causing 7,000 deaths per year.  $19B will go towards smart technology in our healthcare system.  It will save money too and the more money we save the more people will get to see doctors based on need rather than money.
• $2B will go to preventative healthcare.
• Something similar to the 1994 Clinton Healthcare bill is required to save businesses money.  If businesses did not have to worry about healthcare costs, they'd be laying off a lot less people and we would not be as far in this recession as other parts of the world like Japan.

Welfare Relief

• There is no more stimulative thing we know of than foodstamps.  They're guaranteed to be spent, they create jobs in the retail sector and they keep people from going hungry in the United States...something that should never happen.  $20B will go to that program to "defray" rises in food prices.
• $13.6B will go directly to families to help them through the housing crisis...Pres. Obama just discussed that topic today.
• $4.8B will help the unemployed find jobs and train workers.
• What's missing here?  A four month extension of unemployment benefits from 12 to 16 months.  The Republican Senators did away with it...hopefully Maine doesn't have too many unemployed or Sens. Collins and Snowe will have a fun time explaining that decision.

Public Sector

• As mentioned before, fiscal relief will go to states for the purpose of education spending.
• $4B will also go directly to law enforcement officials local and state.

Other Economic News

Some other healthcare related news...the New York Times reported late Wednesday that Gov. Kathleen Sebelius is the top choice to be Secy. of Health and Human Services.  No, she never received a free car or driver from a friend who never told her she had to pay taxes on it.  Don't worry about it.  She brings eight years of experience as Insurance Commissioner of Kansas to the department.  Obama has reportedly decided on her aides say.  But we still need a commerce secretary...hmm...Gov. Corzine (D-NJ)?  Mayor Bloomberg (I-NYC)?

It may have been a photo-op, but it was a great symbol.  Just after the bill was signed into law yesterday, a Missouri bridge project began as the first project to be financed by the President's stimulus package.

Pres. Obama has also unveiled a $75B plan to aid homeowners.

Resign Roland/Concede Coleman

Roland Burris is guilty of purgery.  I wasn't sure of that just two days ago, but now new revelations confirm that.  For the purpose of this article I will refer to the former Governor of Illinois as Rodney (not his real first name but it'll prevent confusion with his brother, Robert).

Burris intentionally evaded a question about talking to a list of people including Robert Blagojevich, the former Governor's brother, about the Senate seat during an impeachment hearing.  Then he snuck an affidavit on February 5th that stated he discussed the Senate seat with Robert Blagojevich and was asked to help raise money for Rodney Blagojevich.

Now, the Senator (for now) admits that he atempted to raise funds for the then Governor even as he was expressing interest in the Senate seat that would be vacated if Senator Obama were elected President.  Now, we know how that turned out.

Yesterday, my guess is Patrick Fitzgerald had no inclination of prosecuting Burris.  Today, that might've been a hot topic at Justice.  Unless, of course, Fitzgerald already well knew about it and Burris wanted to break the news before Fitzgerald could.

Senators Reid and Durbin, the top Democrats in the Senate, had no idea that Burris had talked to anyone near Blagojevich.  They were lied to...sitting Senators lied to...while at the same time, in a different Washington, D.C. building prosecutors discussed cases involving baseball players who lied to sitting Congressmen.  

And more importantly, he lied under oath to the Illinois Senate.

This blog is taking a firm and official stand in favor of the resignation or expulsion of Senator Roland Burris of Illinois.

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To Norm Coleman of Minnesota.

You just failed to silence thousands of proper absentee votes for Al Franken for reasons your Supreme Court found baseless.  A bipartisan board declared Al Franken the winner in your state.  Your former colleague, Sen. Klobuchar (D-MN), needs help securing your states fair share of federal grants from the stimulus package.

Yet, now you baselessly accuse the canvasing board of double counting over 200 ballots.  And you want...votes to be included that weren't included before?  Like the ones you tried to throw out?

Shortly after the election, Citizen Coleman, you said that if you were Al Franken you'd step aside.  Well, for all intents and purposes, you are now Al Franken.  So step aside.

Stimulus or No Stimulus?

Here is a new feature on the recent passage and signing of the American Recovery and Reinvestment Act.  Twice a week during these next few weeks, I will disect this law item by item and describe how each item will or will not stimulate the economy.  Also in this feature, I will discuss the latest on how this money is actually being spent as told by the new government webpage, recovery.gov.

First, as preface, this bill is neccessary and in general a very effective bill.  If we do nothing other than bail out banks, which is what Herbert Hoover did in a nutshell, our economy will do exactly what Hoover's did...go from 3% unemployment in 1929 to 25% in 1933 (or in this case, 3% in 2008 to 25% in 2012).  And spending billions on infrastructure such as mass transit, broadband and highways as well as billions in state aid to keep unemployment benefits flowing and neccessary government officials like police and firefighters from being layed off will create millions of jobs.

It's priorities are sound and well layed out.  It will aim to create clean, renewable (and cheap) energy to end our dependence on foreign oil that funds terror and causes global warming.  It will modernize bridges, highways and roadways to prevent tragedies like the Minneapolis bridge collapse and daily breakdowns of our transportation services.  It will increase consumer spending with tax cuts targeted at the middle and lower classes, the most likely people to spend money.  And it will transform our education department for the 21st century while preventing mass layoffs of neccessary public sector jobs like mentioned before.

And while I may have criticized Sens. Nelson, Specter, Collins and Snowe last week for their watered down version of the stimulus package, most of their cuts will have no impact on the economy for years (the point of the cuts) and they were neccessary for us to have any package at all.  To get started, here are today's items.

Energy

• Five billion dollars will go to weatherizing modest income homes.  This will weatherize up to one million homes when all is said and done (source: Miami Herald).  This money will ideally be spent before next winter and will mainly go to purchasing materials hopefully made here in the U.S. and paying workers.  Rather than waste billions of dollars per year handing out cash to the poor for their heating bills, this section aims to fix the problem once and for all.
  
• Everybody by now has seen the recent IBM ad campaign lobbying for a new energy grid run by technologically advanced computer systems rather than inefficient, never upgraded grids.  It's called a "smart grid" and if it makes this country just 5% more energy efficient, it'll be like taking 53 million cars off the road (source: Wikipedia).  Well that's part of the next thirty billion dollars that'll go to smart grid technology and renewable energy.

Science and Technology

• Senators Collins and Nelson cut about 50% off of most science sections of this bill.  They left in a very important $7.2B in spending on broadband technology.  It aims to link up as may underserved Americans as possible to the broadband internet system.  That will create millions of jobs from building the nuts and bolts (in this case, wires and telephone polls) of the system to the jobs that the system itself aims to create through creating efficient businesses.
• The package aims to spend about $15B for creation of science facilities.  Obviously, science is a hit or miss so it's hard to say whether this will work or not.  It could create a cure for cancer or it could create a three-eared mouse...who knows?

Transporation

• $17.7B will go to creation and fixing of mass transit sytems.  This was raised significantly through grassroots lobby from such pubic interest groups as U.S. Public Interest Research Group (PIRG).  Across the nation, thousands of construction jobs on subway stations, bus terminals, busses, trains, etc have been halted due to bankruptcy of mass transit departments.  These jobs already have all the neccessary permits to restart...they just need money.  That's "shovel-ready".
• $18.8B will go to clean water, environmental restoration and flood control so that something with so many warnings like the levee breach in New Orleans (something that we'd been warned about long before Hurricane Katrina was even a tropical depression) never happens again.  And we have to end these constant "boil-water warnings" that have become much more than annual throughout major cities.
• $27.5B to highway construction...that's pretty much self-explanatory.  This creates a slew of jobs (at least 10 or 20) for every individual project, so collectively it will create millions of them.
• $16.5 will to go "other federal and public infrastructure" whatever that means.  Sort of a miscallaneous category.

This will continue on Thursday...probably Tuesday and Thursday of each of the next few weeks.

FDR, Clinton and Reagan...Let's Keep it Truthful

When the Republican party last lost its way in 1992 having their President unseated and still having minorities in both houses of Congress, the party needed a demagogue to follow.  They chose Ronald Reagan.  Now, in 2009 as they have again lost their way, they are choosing to target two great Presidents: Bill Clinton and Franklin D. Roosevelt.

The So-Called, "Clinton Surplus Myth"

Most recently, Republicans have targeted the Bill Clinton surplus saying that the national debt increased every year of the Clinton administration.  That is true (source: treasury.gov), but it is too simple a way of looking at this situation.  Let's look at it at a more person level.

Now, I emailed a person with such a claim on his blog and he quickly responded.  His page has the explanation that if you borrow $500 from your friend and make $1000, spending $1200 then you've spent in deficit.  But that analogy applies to a government spending more than it makes and borrowing the rest...like now.  The following analogy applies to the late 1990s and early 2000s under Bill Clinton.

Let's say you owe $100,000 and you pay 5% per year in interest.  At the end of the year, you owe  $105,127 (using the continuous compounding equation).  You make $50,000 and spend $45,000 during that year.  So at the end of the year, you spend that $5000 to pay down the $105,127 debt you owe.  Yet, your debt has increased to $100,127.  You spent less than you took in, but your debt has increased.

Now think about this in terms of the national debt.  The national debt was between $4T and $6T during the Clinton administration.  The amount of interest that piles up on th

at debt is the hardest part of paying it off and will be an issue for many years to come.  

Now, in all fairness, most people present the so called "Clinton surplus myth" in the context of, "without condoning Pres. Bush's irresponsible spending" but the bottom line is, the problem Clinton faced with paying down the debt is doubled for President Obama thanks to Pres. Bush's doubling of it.  Republicans should find a new issue to work with because after Reagan, Bush41 and Bush 43, Americans aren't listening to their claims of fiscal responsibility.

"FDR Caused or Prolonged the Great Depression"

It started when Brit Humes of Fox News said, "now everyone agrees the New Deal failed".  Keith Olbermann rightly responded, "wow he must have a lot of invisible friends."  Mitch McConnell just said on the Senate floor, "we now know the New Deal programs did not work".  Many 

Republican pundits cite the New Deal "failure" as proof that spending is not stimulative.

Starting with Mitch McConnell...he stated that by 1936 the unemployment rate was still 15%.  That's absolutely true and that's an inexcusable number.  But it's inexcusable for President Hoover...not Roosevelt.  Because when FDR took office in 1933 the unemployment rate was almost 25%.  That's a 10% drop in just three years.  The only thing inexcusable about 15% is that Hoover let it get that high.

While Mitch McConnell was misleading, but other Republicans have fudged the numbers in an even more misleading way.  A lot of Republicans say that "the unemployment rate was still 18% by 1938".  That is also true...but again it is misleading.  In 1937, the unemployment rate was about 14% because FDR got nervous about the deficit and cut spending which is now considered his biggest mistake...the recession came back and FDR quickly put his foot back on the gas.

And to that point, that recession called the "Roosevelt Recession" is the most definitive proof we have that spending stimulates the economy.  For four years, unemployment crashed from its high of 25% at the start of the Roosevelt administration.  This was as he spent billions of dollars in deficit because it was absolutely necessary.  And then, he hit the brakes and most economists from all parts of the political spectrum agree caused the recession.  We have no more definite proof than that that spending is stimulative for the economy.

So let's not fudge the facts here.  FDR got us well on our way to economic stability and had WW2 not gotten us out sooner, we would have been out by fully recovered by the late 1940s, an incredible feat.  Under Herbert Hoover, the unemployment rate went from 3% to 25%...and he was a ONE TERM president.

In Hoover's second year, unemployment was just about where it is now.  Just two years later it was 25%.  That's what would have happened if we hadn't passed this spending bill.

Of course, there are the Glen Becks of the world who think that FDR "caused" the Depression but they're not worth elaborating on.  Clearly the Depression peaked in 1933 as FDR was inaugurated and the stock market first crashed in 1929 (right VP Biden?)...neither his fault.

The Reagan Legacy Project

The year was 1992.  There was a general feeling of pride throughout America after we stepped in to Iraq to help out the helpless Kuwait.  But then, the recession came into full swing and people began to question Bush's ending the war in Iraq with the dangerous Saddam still in power.  So when some no-name Governor from Arkansas who nobody ever heard of came along and unseated a man who had been in the White House twelve years between his own Presidency and his Vice Presidency, the Republicans were shell-shocked.

So the Republicans decided to take Reagan's mediocre Presidency and turn it into something great.  Now don't get me wrong, Reagan got us out of a bad economic way, but the way he did it is different from what the legacy project says.  And his views on foreign policy were at times criminal.

In 1981, Reagan delivered on his campaign promise to cut taxes.  At the same time, he increased spending on defense.  During his first year as President, Reagan essentially kept the deficit he inherited from Jimmy Carter, just $74B, the same.  But then, in 1982 it went to $128B then $208B peaking at $218B in 1986 (Source: CBO.gov).  

President Reagan realized his mistake and attempted to balance the budget.  He raised payroll taxes and cut benefits quite famously in 1983.  The automatic raises in payroll taxes have yet to be repealed still affecting the middle class today.  The only thing that does not rise quickly enough is the maximum tax amount which positively affects millionaires who are only taxed on their first one hundred grand.

After 1981, Reagan raised taxes many times.  Just after the Carter recession having everything to do with oil, Reagan raised gas tax.  He also raised the same taxes he originally cut restoring 1/3 of the original cut just a year after it happened.  He raised taxes more than any time since world war two.

And the notion that his tax cuts were what led to the economic boom in the 1980s is also incorrect.  Again, he surged defense spending.  That creates high paying jobs and stimulates the economy.  That's supposedly a Democratic philosophy, right?

Reagan stimulated the economy by spending billions and giving a jolt to the economy with an income tax rebate in 1981.  Why do the same men and women voting against the Obama stimulus constantly a man who did the same thing throughout the 1980s?

Eleven people were convicted during the Reagan administration out of fourteen arrests.  Among the list of convicts was Reagan's Defense Secy. Caspar Weinburger.  Why?  The Iran-Contra Affair.  During the mid 1980s, the Reagan administration decided to take the easy way out of a hostage crisis (American hostages) in Lebanon caused by Hezbollah.  

Rather than send troops to Lebanon to convey a, "we're American, you mess with one of us, you mess with all of us" attitude, the Reagan administration (and I don't say Reagan because we don't know that...he withheld a lot of evidence) Reagan began bribing Iran with weapons under the table.  Israel would sell weapons to Iran, the U.S. would replace Israel's weapons and Israel would give us the money from Iran.  In return, Iran promised to do everything it could to get the hostages freed.  Reagan admitted it was wrong but maintained his innocence.

Earlier, in 1983, Reagan had invaded a small island nation of 110,000 called Grenada.  The U.N. and world denounced it as a flex of Reagan's muscle and nothing more.  Immediately after the attack, Reagan's approval rating jumped a few points and he needed that because his rating was getting into Carter territory.  No other major power, not even Great Britain, helped out in this invasion.  Historians will treat it as nothing more than what it is...flaunting of power.

So please, Senator McConnell and others, let's stick to facts when we discuss millions of people out of work, okay?  Let's remember who balanced the budget before you claim your party is the fiscally responsible one.  And let's remember how quickly spending forced the unemployment rate down and how the only recession Roosevelt caused was caused by a lack of spending.  

And most of all, let's remember that under Reagan, government was not the solution to our problems...it was the problem.  Reagan created so many jobs in the defense industry related to government spending (that he allegedly opposed) that when the Cold War ended it caused a major recession.  Reagan did not reverse Carter's Government-Economic Complex like he promised, he made it so large that this nation could not survive without it and it took years to fix that problem between George H.W. Bush and Bill Clinton (only to be destroyed again by George W. Bush).  

In other words, you're a sitting Senator...let's stick to the facts, okay?

February 16th-20th Preview

Monday, February 16th

Have you noticed that a lot of Conservatives have been bashing FDR and Clinton lately?  I'll break down their arguments' validity.  Did Clinton end his second term with a surplus?  Did the New Deal work?

And what about Reagan?  Does a man who bribed Iran with weapons during the Iran-Contra affair deserve such a legacy?  And how did he fix the economy...tax cuts or spending?

Tuesday, February 17th

So how did Pelosi, Reid, Obama, Collins and Nelson do?  I'll break down the stimulus bill item by item, give you my opinion and let you decide in this ongoing feature, "Stimulus or No Stimulus?".

Wednesday, February 18th

How many Americans think that we should investigate Bush criminally or by a panel?  3 in 5. 

And is this precedented?  Well...how many Reagan officials were convicted after he left office for the Iran Contra affair?  Eleven...including his Defense Secretary and they weren't pardoned until the end of Pres. Bush 41's term.

Thursday, February 19th

Another installment of "Stimulus or No Stimulus?".

Friday, February 20th

Midterm watch...what will become of the dying breed of Northeast Republicans?  Only Susan Collins, Olympia Snowe, Arlen Specter and Judd Gregg remain in this club even smaller than the "living Presidents" club.  Specter and Gregg are up for re-election in 2010...what'll happen to them?  

Or better yet...will the 62 year old Gregg even run...he said "will I run? Probably not." the other day.

The "Center Ring"

An end of the week update on the less important, more entertaining stories of the week.

Anyone who saw the Congressional grill of Bank leaders yesterday must have been quite...gratified. But I think the best part was Mass. Congressman Mike Capuano's angry rant. Who did he compare the bank executives to? The people who rob those executives banks. He said that he would not listen to a bank executive say "I learned my lesson" any quicker than he'd listen to a bank executive say so. Oh and of course, his neighboring district's rep, Barney Frank, was entertaining as usual asking the CEOs why they had to be "bribed with bonuses" to do their jobs.

House Minority Whip Eric Cantor's press secretary apologized yesterday for a staff member's response to a request by Politico for the Congressman's response to anti-Republican leadership ads. He sent Politico a link to a spoof on an old ASFCME that when aired on TV required 14 bleeps saying that they should post the video as the Congressman's response. Politico obeyed posting the video with the headline, "Cantor's Effing Response". With millions out of work, it did not get a warm reception with the public. WARNING: Explicit video, not bleeped.


After weeks of it appearing that Republicans were actually winning the fight on the stimulus bill, Gallup put forth a poll that surprised most. It has Obama with a 67% approval rating on the poll. Congressional Democrats are quite a bit lower, but have a higher approval than disapproval rating (48-42). Only Republicans have a higher disapproval rating with an approval rating of just 31%...58% disapproval. That's Pres. Bush territory, a sign that Republican hopes that Pres. Bush's (a man Mitch McConnell called a political burden) absence will solve all of their problems is wishful thinking on their part.

And what did Pres. Obama say?? Hold me responsible? If my plans don't work, blame me and we'll have a new President? I've never heard such a blunt statement from a President. He seems to know that he only has four years or less to turn this thing around...two if he's worried (and he is) about the midterms in 2010. But I think that he'll be a term-term President...his economic ideas are right for this country.

A Big News Day...Here's What's Happening

Pelosi says that the bill that came out of the Senate is large enough and has the right priorities. Congress and the Senate have reached a deal on the $789B Nelson-Collins Stimulus bill with little or no changes. Collins, Snowe and Specter had fragile votes and Nancy Pelosi clearly recognized that. I never thought the conference comittee would only take one day.

The Taliban kill twenty people in attacks in Kabul. This event is making it very easy for President Obama to sell his plan to surge troops in Afghanistan. Unlike in Iraq, I don't believe we are obliged to rebuild Afghanistan because the country under the Taliban embedded our enemies. That is reason enough to invade a country and we do not need to stick around and wait for a strong government to appear. On the other hand, we do have to make sure that that strong government is never again the Taliban.

As Pres. Obama promised when he was posed the question the other night, Secretary Gates has ordered a review of the policy on media showing soldier's coffins. It is absolutely necessary that the media be allowed to show these images so that we the people can see the human side of this war. That is our right.

Henrietta Hughes is "satisfied" with what the White House promised her after she moved Pres. Obama with her request for help at the town hall meeting. The Obama staff contacted her local housing department and the wife of Florida Congressman Nick Thompson has offered Hughes use of a home she is not using. Some in the blog world are calling Hughes "the face of the economic crisis".

The President of the Peanut Corp. of America pleaded the fifth to Congress today saying he did not want to incriminate himself. People will go to jail over this and changes will have to be made. One of the saddest stories was one of a husband telling the tale of his cancer surviving wife's death calling for jail time for anyone who knowingly sold tainted peanut products.

The scheduled story on FDR and Reagan will appear in the next week.