Thursday, January 28, 2010

Brief thoughts on SOTU

Full text of the 2010 State of the Union

* President Barack Obama touted all the jobs he's 'created' and listed the numbers:

“Because of the steps we took, there are about two million Americans working right now who would otherwise be unemployed. 200,000 work in construction and clean energy. 300,000 are teachers and other education workers. Tens of thousands are cops, firefighters, correctional officers, and first responders. And we are on track to add another one and a half million jobs to this total by the end of the year.”

These are all government jobs. Even the construction jobs are for roads, highways, and other infrastructure and will be gone as soon as the government money is used up. They're not permanent.

As the 'clean energy' jobs are jobs that exist only because of government subsidies. Take a look at our own 'clean energy' companies in Toledo. They aren't able to get the private funding for their operations because the 'market' doesn't want to invest. So the government takes our tax dollars and decides which companies are going to survive. There wouldn't be much of a 'green energy' industry if government weren't subsidizing it so much. So what happens when those government funds run out? No jobs.

But that's not the worst of it. He then said:

“Now, the true engine of job creation in this country will always be America’s businesses.”

If he really believed this, he wouldn't be taxing businesses and individuals in order to spend money 'creating jobs.'

* Then there's the bank tax, even though Obama calls it a fee:

So I supported the last administration's efforts to create the financial rescue program. And when we took that program over, we made it more transparent and more accountable. And as a result, the markets are now stabilized, and we've recovered most of the money we spent on the banks. Most but not all.

To recover the rest, I've proposed a fee on the biggest banks. Now, I know Wall Street isn't keen on this idea. But if these firms can afford to hand out big bonuses again, they can afford a modest fee to pay back the taxpayers who rescued them in their time of need.

Except it's not just on the banks that got bailout money - it's on ALL banks. Additionally, he used some of those funds for the car companies he bailed out.

So all the successful banks will be charge a fee (which they'll pass along to each of us) to cover the failures of their competitors, as well as the failures of companies in completely unrelated industries.

But that's not all. Instead of using the new tax they collect to help offset the debt (something else the President said must be addressed), he's going to spend it again!

So tonight, I'm proposing that we take $30 billion of the money Wall Street banks have repaid and use it to help community banks give small businesses the credit they need to stay afloat. I'm also proposing a new small business tax credit -– one that will go to over one million small businesses who hire new workers or raise wages. While we're at it, let's also eliminate all capital gains taxes on small business investment, and provide a tax incentive for all large businesses and all small businesses to invest in new plants and equipment.

Tax credits are nice, but lowering the overall tax rate is even better - and applies to everyone and not just a select few. Eliminating capital gains taxes is great, too, but why not just eliminate it completely? If it's bad for business, it's bad for business.

But this 'solution' presumes that the reason banks aren't lending is because they don't have the money. There's nothing to indicate this is the case. In fact, my husband and I, both small business owners, are barraged by offers from banks to loan us money for our companies. We don't take advantage of them because we don't have a need and because we're not sure what politicians in D.C. are going to do to us. Will accepting any government-backed loan for our company come with pay limits? That's what they're doing to the banks and everyone else they're loaning money to.

And why community banks? Is he interfering in the market trying to get people to switch from 'large' banks to 'community ones'? Larger banks have more capacity for loans, especially with the new regulations Congress passed requiring higher assets for banks.

This 'solution' doesn't make sense from a financial perspective...but Congress applauded when he said he was going to do it. And I'll bet lots of people did as well.

* Obama's plan for college loans will make the cost of college skyrocket.

To make college more affordable, this bill will finally end the unwarranted taxpayer-subsidies that go to banks for student loans. Instead, let’s take that money and give families a $10,000 tax credit for four years of college and increase Pell Grants. And let’s tell another one million students that when they graduate, they will be required to pay only ten percent of their income on student loans, and all of their debt will be forgiven after twenty years – and forgiven after ten years if they choose a career in public service. Because in the United States of America, no one should go broke because they chose to go to college. And it’s time for colleges and universities to get serious about cutting their own costs – because they too have a responsibility to help solve this problem.

So now a college education is a right? If no one should have to pay the full price for their education, then it becomes an entitlement and people will think of it as a right. " one should go broke because they chose to go to college"??? They won't go broke if they make good decisions to begin with. Perhaps they go part-time while working. Perhaps they live at home instead of borrowing money to live in a dorm. Perhaps they go to a community or 2-year college first where rates are usually lower. Perhaps they work and save up money instead of borrowing everything and expecting the loans to cover all costs. No wonder kids are graduating with huge debt. They've begun to believe that they shouldn't have to work while going to school.

And now, here comes the President, telling them that the should go ahead and borrow as much as they want. Don't be responsible for supporting yourself - just borrow. And if, when you graduate, you have no work experience and can't get a good-paying job, we'll let you skate on how much you repay each month and then forgive anything still owed after 20 years.

Under this plan, there is absolutely no incentive whatsoever for the student to ever repay the loan. So kids will borrow more and owe more. The government, which has taken over the student loan industry will not have the resources, absence the full repayments, to continue. They'll have to tax all of us more in order to continue what by then will become an entitlement program, so you and I will end up paying for everyone else's college education. With this situation, there will be no incentive for students or colleges to control costs, and the price of a college education will go through the roof. Basic economics 101, people.

* Then there was the lies about lobbyists. The President said:

To close that credibility gap we must take action on both ends of Pennsylvania Avenue to end the outsized influence of lobbyists; to do our work openly; and to give our people the government they deserve.

That’s what I came to Washington to do. That’s why – for the first time in history – my Administration posts our White House visitors online. And that’s why we’ve excluded lobbyists from policy-making jobs or seats on federal boards and commissions.

But Erick Erickson at proves the words are lies:

Maybe this explains why his national security policies are so weak. He put William Lynn in the Pentagon as Deputy Defense Secretary. Mr. Lynn was a lobbyist for Defense Contractor Ratheon. I guess the Deputy Defense Secretary is not a policy-making job.

But it is not just Lynn.

- Eric Holder, attorney general nominee, was registered to lobby until 2004 on behalf of clients including Global Crossing, a bankrupt telecommunications firm [now confirmed].
- Tom Vilsack, secretary of agriculture nominee, was registered to lobby as recently as last year on behalf of the National Education Association.
- William Lynn, deputy defense secretary nominee, was registered to lobby as recently as last year for defense contractor Raytheon, where he was a top executive.
- William Corr, deputy health and human services secretary nominee, was registered to lobby until last year for the Campaign for Tobacco-Free Kids, a non-profit that pushes to limit tobacco use.
- David Hayes, deputy interior secretary nominee, was registered to lobby until 2006 for clients, including the regional utility San Diego Gas & Electric.
- Mark Patterson, chief of staff to Treasury Secretary Timothy Geithner, was registered to lobby as recently as last year for financial giant Goldman Sachs.
- Ron Klain, chief of staff to Vice President Joe Biden, was registered to lobby until 2005 for clients, including the Coalition for Asbestos Resolution, U.S. Airways, Airborne Express and drug-maker ImClone.
- Mona Sutphen, deputy White House chief of staff, was registered to lobby for clients, including Angliss International in 2003.
- Melody Barnes, domestic policy council director, lobbied in 2003 and 2004 for liberal advocacy groups, including the American Civil Liberties Union, the Leadership Conference on Civil Rights, the American Constitution Society and the Center for Reproductive Rights.
- Cecilia Munoz, White House director of intergovernmental affairs, was a lobbyist as recently as last year for the National Council of La Raza, a Hispanic advocacy group.
- Patrick Gaspard, White House political affairs director, was a lobbyist for the Service Employees International Union.
- Michael Strautmanis, chief of staff to the president’s assistant for intergovernmental relations, lobbied for the American Association of Justice from 2001 until 2005.

So much for excluding lobbyists!

* He wants to freeze discretionary government spending - but not until 2011???

Starting in 2011, we are prepared to freeze government spending for three years. Spending related to our national security, Medicare, Medicaid, and Social Security will not be affected. But all other discretionary government programs will. Like any cash-strapped family, we will work within a budget to invest in what we need and sacrifice what we don't. And if I have to enforce this discipline by veto, I will.

I'm all in favor of freezing spending and am glad he's doing it, but I believe it's a be disingenuous after he's spent so much already. But why wait until 2011? Could it be because it's an election year in 2010???

If you're going to freeze spending, do it now. Don't wait. To wait makes it look as if you're not really serious. And comparing a future government spending freeze to the budget cuts families are making today just adds insult to injury.

* He wants Congress to post earmark requests on line. That's fine - but let's go a step further and eliminate earmarks altogether. As the President says, "a novel concept!"


Overall, I thought this sounded more like a campaign speech, still blaming problems on the previous administration, still making promises he has no power to control, criticizing others for being in perpetual campaign mode when he's doing the exact same thing, and still trying to sound above it all while offering programs and policies that, in the past, have proven to be failures.

As my Facebook friend, Greg Kinney said:

"It was a speech filled with contradiction. The President said job creation is his top priority, then went on to advocate for a Cap & Trade bill that will wreak havoc on the economy. He spoke of lowering health costs, then advocated for bills in Congress that independent experts have said will not lower costs. He spoke of cutting the debt, then advocated for more spending."

I did not expect much from Pres. Obama's first state of the union speech, and I wasn't disappointed.


skeeter1107 said...

Excellent points!

Unfortunately I heard someone that is a neosocialist continuing to advocate policies that are detrimental and unworkable.

He is stubbornly unwilling to follow policies that are workable because it contradicts everything he believes and espouses. To do so, would be an admission in the face of mounting evidence that his social and economic beliefs are contrary to economic realities.

Hooda Thunkit (Dave Zawodny) said...


"I did not expect much from Pres. Obama's first state of the union speech, and I wasn't disappointed."

So, I missed more of the same old, same old when I managed to doze off despite the noisy location (Hospital)...

Glad to see that I did something productive during the D & R theatrics...


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