Major Mike’s Musings

President Obama announced another bailout. It’s not likely to work, but he has to do something besides blame the “previous administration” for the economy.

Here’s why government spending won’t fix the economy: Government money has to come from somewhere.

1. Taxes. Taxes come from the economy in the first place, so the net effect of government spending from taxes is zero.
2. Borrowing. Sure that puts extra money in the economy, but because of the interest, each dollar spent is worth less than a dollar.
3. Printing. Each extra dollar printed reduces the value of all the dollars already in circulation. Thus, each dollar spent is worth less than a dollar.

Government spending doesn’t create new wealth or extra jobs, it just redistributes money from those who pay taxes (or loan the government money) to those who help politicians get elected.¹

1. I had a little help here from Glenn Beck’s Arguing With Idiots. [↩]

USA Today reports that the contractors who spent 16 billion dollars of the stimulus package created 30,383 jobs!

Incredible, the stimulus package is working. It only cost $528,610 per job. If the rest of the package is as successful, the stimulus should create just over one million new jobs.

Let’s turn over more stuff for the government to run.

Scene: A senior couple reading the newspaper over a morning cup of coffee.

She: So every year we get a C.O.L.A. to offset inflation…what happens if there’s no inflation?

He: We gat a C.O.R.A.

She: What’s that?

He: Cost of Re-election Adjustment.

Anyone out there taken advantage of the cash for clunkers program?

Sung to the tune of “Are you ready for some football?”

Are you ready for the VAT tax?

Last month Comcast changed their bills to full color. This month they raised their rates.¹ I guess they figure if they look cool we won’t notice the rate increase.

1. Perhaps to pay for the full color. [↩]

A trillion here, a trillion there, pretty soon you’re talking about real money.¹

1. Paraphrased from the original Everett Dirksen quote [↩]

Hey Folks, in case you’re interested in the government’s massive bailout, there’s a website available. Here’s a quote from Recovery.gov:

Recovery.gov is a website that lets you, the taxpayer, figure out where the money from the American Recovery and Reinvestment Act is going. There are going to be a few different ways to search for information. The money is being distributed by Federal agencies, and soon you’ll be able to see where it’s going — to which states, to which congressional districts, even to which Federal contractors. As soon as we are able to, we’ll display that information visually in maps, charts, and graphics.

There’s even a link to the actual bill that President Obama signed today.

Ok, time for some reading.

When oil prices are going down (around $34 a barrel Friday) how come gas prices keep going up ($.35 since Jan 1)? Turns out that the $34 per barrel is for West Texas crude and they’re not making much gas from it. Instead, we’re getting gas from inferior oil imported from Canada, Venezuela, Saudi Arabia, and others. That oil is much more expensive, about $7 more per barrel not counting transportation cast, than West Texas crude. Why are we using foreign oil instead of West Texas crude? We don’t have pipelines in place to transport the oil out of the Southwest.

Is there any money in the massive bailout bill to build pipelines?

Looks like the market today didn’t believe the hype about the bailout stimulating the economy. Or was it something else?