Stimulating the National Debt

It has been proven many times over that when one party controls both the Congress and the Executive that spending increases. Never in our history have we seen spending go so completely out of control so quickly as to prove this so quickly. The 111th Congress has moved quickly to establish its partisanship and Speaker Pelosi continues to whip the Beaten Blue Dogs into line.

The media has picked up on my analogy of Congress as College Kids spending on their parents credit cards. Without factoring in the Stimulus Plan, the deficit is already expected to break records in 2009. We're seeing the effects of the CEO Bailout, the UAW Bailout, combined with "run of the mill" out of control spending already:

WASHINGTON – The Treasury Department said Monday it will need to borrow $493 billion in the first three months of this year, a record amount for the January-March period.
The Treasury Department figure comes on top of $569 billion the government borrowed from October through December, the all-time high for any quarter. AP 2009 Feb 02

To give you some perspective, we had to borrow money to force taxpayers to buy into banks we didn't want to pay those Billions in bonuses to the CEO's already. The $1.062 Trillion we will have borrowed in the first six months is already more than any other deficit in our Nation's History. And this does not include the stimulus package.

The Debt Stimulus package is approximately $5,600 PER taxpayer, all debt, all the time. Or about $2,730 PER American, including each of those new octuplets recently born, all debt, before interest.

Both the Stimulus Package and the CEO Bailout Bill are more than we spent in 5+ years of War in Iraq, by hundreds of billions EACH. Both are greater than the largest single budget item: Social Security which sits at $644 Billion. The Debt Stimulus package is 3.15 times what we pay in interest on the debt already accrued.

The Government estimates it will collect only $2.7 Trillion this year and has already approved spending $3.1 Trillion before the Stimulus and before the UAW Bailout and before the CEO Bailout. In fact, the 3 supplemental spending bills will be more than 3x what the deficit already was budgeted for in 2009. And we borrowed more in the first quarter of the fiscal year as was budgeted to borrow for the entire year. We will borrow more in the second quarter of the fiscal year than was budgeted for the entire year, before the Debt Stimulus package.

One is forced to wonder if The Party (DNC) is purposely attempting to bankrupt the Federal Government.

On the other hand, an economic stimulus package is needed, not an $819 Billion pork spending package. Increased spending on condoms should be left to individuals, not the Federal Government. We need to prioritize our spending but cutting the Military during a time of War is not the answer. Whether Murtha and Frank get their 25% or Obama cuts the DoD by 10%, this will cost jobs, not increase them. It will put more people on the unemployment rolls.

Obama promised to fully support the Troops in his first visit to the Pentagon and again in his Superbowl message to Troops:

“All of you who are serving in the U.S. armed forces are going to have my full
support, and one of my duties as president is going to be to make sure that you
have what you need to accomplish your missions,” he said.

That is not accomplished by cutting the DoD budget as he told the Joint Chiefs to plan for during the same visit. Politicians are paid to decide the ratio of spending on bullets to beans, but instead Our Congressmen are choosing to buy condoms. Somehow, I don't think Trojan is in trouble.

So long as Speaker Pelosi can keep the "moderates" in line, she has no need to cross the aisle. Sadly, Our Representative is toeing her line. The Party (DNC) has absolute power and she is expressing the CA Idealists ways.

Mike Huckabee noted on his new Fox Show that $1 Trillion dollars would buy Microsoft, Google, Apple, Coca-Cola, and Pepsi all and completely. Glen Beck showed us a chart that demonstrated the new Treasury Secretary's plan to print more money. I haven't found a source for his numbers, but if they are accurate, it would appear that soon everything will be worth half of what it currently is.

I fully expect that the Debt Stimulus Bill will pass and be signed by President Obama. It will have made it to his desk with Representative Gordon's vote, at least in the first round. There will likely be a second round after the Senate gets done with it but it's unlikely to have the fat trimmed off of it. The last time, the Senate merely increased the fat (CEO Bailout Bill).

And the UAW Bailout Bill saved no jobs either. The Auto Companies still cut back on parts orders and production, despite the $17 Billion. They did so, because Americans aren't buying their cars and padding the wages of the 70k/year UAW members only increases their ability to buy a new car on the backs of their customers who still can't afford their product.

Their pleas to save the jobs of waitresses paid in tips by auto parts supplier's workers were nothing more than marketing and advertising for their own overpaid salaries.

So, if the Debt Stimulus package passes, who will first see the recovery? Other than Trojan, construction companies. Not the homebuilders, the commercial and industrial companies. A portion of the bill is dedicated to infrastructure improvements and school construction. It will have an effect, but not the effect that should be expected by $819 Billion, because too much is dedicated to programs that have no business being included in "economic stimulus."

Perhaps it's time for our Congressmen to cut their own salaries back to the $1/year they have demanded of CEO's, until they can get their spending under control.

Economic Development of Middle Tennessee

As Tennessee struggles with 7.2% unemployment, politicians promise job growth plans. In Tennessee, the growth industry has become government jobs as highlighted in an earlier post.

There is certainly an impact on businesses and hence employment from government policies and the work of our elected officials. It can be positive or negative. It can strangle business development or help it to flourish.

The current crop of Congressional leaders has made promises to stick it to the man, to force Employers to spend more on each employee, while the President-elect promises 2.5 Million new jobs across the Nation. Though I'm sure we've all experienced an Employer we could not respect, an overbearing boss we didn't like, we must consider the realities.

That which effects our Employers effects how many employees they can and will hire or lay off. When we "stick it to the man," we are sticking it to our businesses and hence the employees of those businesses. We are shooting our selves in the foot when we support the slogans of politicians that undermine our businesses.

But, let's look at what we can do: Buy local whenever possible. When you make your purchases in the town square, it supports local business. It builds business in your town. As business grows, they add employees. And those business owners are your neighbors. As their business expands, they too increase their purchases, building other local business and employment.

But buying locally also increases the finances of our local government. A portion of the sales tax goes to our local governments. The more it brings in from the sales tax, the less it will have to pay for services with increased property taxes.

Buying local is a cycle that will improve your life by increasing employment near your home while decreasing your cost in gasoline to both shop and to work. It keeps our money close to home and increases the opportunity for you to take that step into business ownership.

But what can I do to help improve our economies and employment? I too can buy local and I do.

Though I am a common citizen as are you, I have to look forward to how I can positively effect employment and business, if elected. There are a lot of ifs in between me and that but it is prudent to begin the process. As such, I have sent an invitation to open a dialogue with our Chambers of Commerce. Not only do they have their finger on the pulse of the issues effecting our local businesses, but they are a key part of attracting new employers to our area.

The growth of industry and employment in Alabama is a demonstration of how elected officials can have a positive effect on economic development.

In Middle Tennessee, we have all of the right components to attract top notch employers and businesses. Our Chambers of Commerce continue to work towards the economic success of our citizens and businesses. We have hard-workers with good ethics. We have a strategic location.

Neither I, nor any politician, can realistically promise job growth of a specific number in a certain number of years. Economists may be able to predict job growth but politicians cannot guarantee it. Elected Officials can do much to encourage economic development, or to implement policies that stifle it.

It will be my policy to consult with those effected and experienced in their specialities when developing positions and legislation rather than ignoring those that have been performing in that arena for their entire life. That means consulting with the leaders of local business on things that effect the ability of our small businesses to grow. It means working with our local Chambers of Commerce when they are working to bring jobs to our area.

Government must be responsive to the governed. Representatives should be responsible to their constituents, not their Washington contributors.

TNTaylor©2008, Tennessee Taylor, all rights reserved.

An example of a time when our elected officials should be lending a hand to our Chambers of Commerce: http://www.t-g.com/story/1480400.html

Job Creation & Government

When the economy turns south, the people look for someone to blame. When a worker is laid off, they want to know what caused them to take back from the Unemployment Insurance (tax) they paid into through their employers. In such times as these we often blame the government but what is the government's role in job creation?

Congress does have the ability to influence the economy and governments do have a role in creating an environment that will create jobs. And in times like these, we see examples of not only the natural cycle of economies, but also how governments effect those cycles.

There are basically two things a government can do to spur an economy, as taught me by my Economics Professor: Spend More or Tax Less.

In September, the Nation saw unemployment rates hold steady at 6.1% while Tennessee saw rates jump to 7.2% and Alabama rates declined to 4.9% in August. Meanwhile Michigan is very different and experiencing harder times with an 8.7% unemployment rate. http://www.milmi.org/

http://news.tennesseeanytime.org/node/422:

“The downturn in the national economy is affecting all states,” said Commissioner Neeley. “Tennessee, like the rest of the nation, is experiencing job losses across all industries. There were some small gains in education and health services and local government education jobs.”

The business survey shows August-to-September gains in government employment, increasing by 10,700.

http://governorpress.alabama.gov/pr/pr-2008-09-23-01-navistar_engine-photo.asp:

The Governor (Riley) also noted in his remarks that Alabama was one of only five states in the nation that saw its unemployment rate drop last month. The state’s August unemployment rate stood at 4.9 percent, while the national rate increased to 6.1 percent.

Tennessee and Alabama are not significantly different regionally nor in our workers, but there is a profound difference in the number of workers employed. The difference between our states is the manner in which our governments approach job creation. Governor Bob Riley has aggressively sought to attract business to his state and created an environment friendly to new businesses. Governor Bredesen has added more government workers.

Economies are driven by workers and consumers, and their perceptions and emotions. Investors attempt to predict the emotions of consumers on the Stock Market and create perceptions and emotions that drive the market.

But financial hardships are very real. We feel them as we pay our monthly bills. Investors feel them when they are on the wrong side of the mad herd called Wall Street. Politicians capitalize on those emotions and/or realities at the ballot box.

In Tennessee, we have great workers and thrifty consumers. Our people are not the problem. The problem is that our politicians have played on our emotions to legislate financial irresponsibility.

The Party told us we were "racists" for expecting banks to make good loans that could be repaid. The Party told us we were "uncaring" for expecting our neighbors to manage their finances and pay their own bills and only buy things they could afford. The Party told us we were "unpatriotic" to not want to pay more taxes. The Party told us that they would make our tax invisible to us by making the Corporations pay it before they passed on those costs to us.

The Party is wrong about us. Tennesseans are Generous, Responsible, and Hard-Working. We are Patriotic and Self-Reliant. When adversity hits our neighbors, we help, but when financially irresponsible politicians demand more money from our sweat, we tell them "No."

Why are Foreign Automakers moving their plants to Alabama and are Automakers successful in Tennessee while General Motors, Chrysler, and Ford seem to withering on the vine in Michigan? The Michigan government has created an environment hostile to business while the Alabama government has created one conducive to business. As a result, taxes are lower in the South, employment is higher and businesses continue to seek out places with good workers to employ.

I do hope that General Motors, Ford and Chrysler survive their hard times. I own or have owned products from each of them. But the outlook is dismal. They are being strangled by their inability to reduce costs. And I can not justify spending twice as much on a truck than my father paid for the house I grew up in.

Taxes effect us whether Congress hides them or not. We pay them either in higher costs at the cash register or decreased income from our employers. The answer in these trying economic times is not more taxes. The answer is not more government spending. We know best what to spend our hard earned money on.

And while it may seem fitting to stick "the corporations" with more taxes, it not only gets paid by workers and consumers, but reduces incentives for employers to open new factories and offices, reducing employment and hence paychecks. The Job Creation role of government must take into account the competition of other governments to attract employers.

And when our politicians tell us to add a Trillion dollars to our debt to bailout the economy, we must ask them whether we are bailing out CEO's and their multi-million dollar golden parachutes, or the workers. And when a politician votes for a CEO bailout as did the Representative of the 6th district, against Our Will, we have a right to an explanation as to why our hard earned money should be given to fat executives to spend on resorts. And when we find that explanation lacking, we have a right to change Our Representative to Congress.

If we continue along the path we are on, government will continue to grow. It is already the largest growth sector in our State economy. We do not wish to have a choice between a government job or a government handout, but that is the direction our politicians are taking us.

TNTaylor©2008, Tennessee Taylor, all rights reserved.