Saturday, May 8, 2010

Trust The Government to now "fix" what they helped break??



On May 5th, Sen. Chris Dodd (D-CT) told reporters about his financial regulation bill, “We’ve ended the ‘too big to fail’ debate. So no longer do I expect any argument to be made that this bill exposes the American taxpayer.” Really. Someone might want to tell Sen. Dodd that in other news yesterday, Freddie Mac announced that it lost another $6.7 billion in the first quarter of 2010 and therefore needed another $10.6 billion in cash from U.S. taxpayers. Since formally nationalizing Freddie in 2008, the federal government has already spent $50.7 billion bringing the Freddie bailout total to $61.3 billion so far. Combined with Fannie Mae’s raid on the Treasury, the Congressional Budget Office estimates that the American people will spend $389 billion bailing out the two Government Sponsored Entities by 2019. So much for American taxpayers no longer being exposed to “too big to fail.”

In fact, nothing in the Dodd bill does anything to reform Fannie Mae and Freddie Mac. This despite the fact that Fannie and Freddie were key components in causing the very financial crises Dodd claims his bill will forever prevent. Fannie and Freddie were both created for the specific purpose of making it easier for Americans to buy more expensive housing. Starting in 1993, political forces pushed Fannie and Freddie to loosen their once strict loan purchasing requirements. By 1996, regulations required that 40% of all Fannie and Freddie-bought loans must come from individuals with below median incomes. In 1995, Fannie and Freddie began buying subprime securities originally bought and bundled by private firms. One of these firms was Countrywide Financial who, thanks to their status as Fannie Mae’s biggest customer, delivered investors a 23,000% return between 1985 and 2003. By 2004, Fannie and Freddie were purchasing $175 billion worth of subprime securities per year from Countrywide and their brethren… a 44% share of the entire market. There are other factors that helped contribute to the 2008 financial crisis, but Fannie and Freddie’s use of their “too big to fail” status to create and grow the subprime security market was essential.

But Sen. Dodd, who received V.I.P. treatment from Countrywide CEO Angelo Mozilo, never saw any problem with Fannie and Freddie. On July 13, 2008, Senator Dodd said on national television, “To suggest somehow that [Fannie Mae and Freddie Mac are in trouble is simply not accurate.” Less than two months later the bailouts of Fannie and Freddie began. Keep these facts in mind when Dodd says his bill solves the “too big to fail” problem.

The problems with the Dodd bill go beyond its failure to let Fannie and Freddie wither into extinction. While Dodd has agreed to get rid of the $50 billion bailout fund, the underlying bailout authority still remains. Now taxpayers are expected to front the government money while firms are liquidated. But the irresponsible creditors who let those firms borrow money irresponsibly would still be eligible for taxpayer bailouts. According to The Washington Post, “a failing firm would be forced to pay back the government any money they received above what they would have gotten under a bankruptcy proceeding.” But how does the government know what creditors would have got if the company went into bankruptcy? Why not just strengthen the existing bankruptcy system and actually allow these too big to fail firms to, ya know, fail?

But Dodd and the Obama administration would never allow that. It would defeat the whole purpose of this financial regulation bill, which is to transfer as much power to the federal government as possible. Never mind that these are the same government regulators who failed to see the last crisis coming.

Source: Heritage Foundation

Friday, May 7, 2010

A big Government recovery Only Washington has jobs.

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Today the Labor Department’s Bureau of Labor and Statistics released its monthly jobs report showing that the nation’s unemployment rose to 9.9% in April despite the addition of 290,000 jobs, 66,000 of which were temporary Census 2010 jobs. The rise in unemployment was driven by the entrance of 195,000 previously discouraged Americans reentering the workforce. In total, the U.S. economy has now lost a net of 2.6 million jobs since President Barack Obama signed his $862 billion stimulus plan. We are 7.6 million jobs short of the 137.8 million he promised the American economy would support by 2010.

It is encouraging to see the American economy beginning to recover, but these numbers again indicate that the Obama administration’s heavy government hand has retarded and deformed what otherwise would have been a more robust recovery. The White House may tout Congressional Budget Office (CBO) reports showing their $862 billion stimulus created jobs, but the CBO has also admitted their computer simulation didn’t take any actual new real world data into account. To the contrary, an independent study of real world stimulus facts found: 1) no statistical correlation between unemployment and how the $862 billion was spent; 2) that Democratic districts received one-and-a-half times as many awards as Republican ones; and 3) an average cost of $286,000 was awarded per job created. $286,000 per job created.

And what kind of jobs were created? According to Gallup the federal government is hiring at a significantly faster pace than the private sector. And data from BLS confirms that governments are increasing public sector pay at far faster rates than the private sector. None of this should be a surprise. President Obama specifically designed his stimulus to preserve government union jobs.

Not that President Obama’s agenda has failed to produce any private sector jobs. The Washington economy is booming as private firms have been forced to hire legions of lawyers and lobbyists to both protect their firms from Obama’s new agenda and find ways they can turn it into profit. This is why energy companies are spending millions on lobbyists to shape legislation instead of on scientists to find energy. It is why software companies are spending millions on lawyers to get federal government business instead of on engineers to develop new technologies. Back in 1994, columnist Jonathan Rauch explains what happens when Washington becomes a center of profit for the private sector:

Economic thinkers have recognized for generations that every person has two ways to become wealthier. One is to produce more, the other is to capture more of what others produce. … Washington looks increasingly like a public-works jobs program for lawyers and lobbyists, a profit center for professionals who are in business for themselves.

What happens when big government, and the big businesses best capitalized to influence it, are the main drivers of economic recovery? The recovery is slower and smaller than it otherwise would have been. A recent study by the Kaufman Foundation found that small businesses have led America out of its last seven recessions, generating about two of every three new jobs during a recovery . But under this Obama recovery, not only are government jobs growing faster than private sector jobs, but jobs are rebounding faster at large employers than small businesses.

And the Obama agenda is only set to make the environment for small businesses worse. The Obama budget plans to raise taxes on the small businesses that earn 72% of all small business income. Taxes on capital gains are set to increase to 20% while taxes on dividends are set to rise to 39.6%. Obama care not only inflicts $503 billion in new taxes by 2019, $87 billion of which come from employer mandate penalties, but also burdens small businesses with new 1099 IRS paperwork every time they do more than $600 in business with another entity. Oh, and Obama is proposing more IRS funding and a change in law that will make it harder for small businesses to hire independent contractors.

There are far more types of small businesses engaged in more kinds of economic activity than Congress can devise special policy to help. This sort of one-off, micro-managing, tinkering policy may gain a headline and support, but it will not help small businesses broadly. The more Washington taxes and regulates, the harder it is for small businesses to innovate, force big businesses to be more productive and create new jobs. The more the Obama agenda is implemented, the slower our recovery will be.


Source: Heritage Foundation

Wednesday, May 5, 2010

Obama Violated the Constitution Before He took office

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Starts with putting Hillary in place as secretary of state.. In doing so he violated the "emoluments clause", you can Google that for more detail.

What it says is that for during the term in which a senator is elected, they cannot be appointed to a position of authority within the government that the salary or entitlements were increased during their service. You say no big deal, but it shows his contempt for the constitution from the get go...

Article I of the constitution enumerates certain powers to the federal government, limiting their authority over the states.... The feds like to abuse the general welfare clause and the interstate-commerce act to enforce its will upon the states and directly impact our daily lives. The fact is the federal government was meant to be limited in size and scope, it has exceeded these boundaries since Lincoln and has been growing by leaps and bounds for the last century.

Since when does the government have the RIGHT to take trillions of our dollars and use them to shore up / purchase controlling interest in privately held corporations? Since when does the government have the authority to tell privately held organizations they must take the money or risk an audit that would ruin their credit rating? Since when does the government have the power to loan money to a corporation and refuse to take it back because they want to maintain their unlawful control of a privately held corporation? Where in the constitution does it allow for federal healthcare? Where in the constitution does it allow for a national civilian police force? Where does it provide the authority for the cap and trade program?

Did you hear his speech today where he was promising to enact legislation to prevent economic disasters like the one we just experienced from happening again? Wasn't that why Woodrow Wilson enacted the federal reserve? Hmmm I think you should be concerned, VERY CONCERNED, over what this man is doing to our beloved country. CALL ME A WING NUT, CALL ME AN ALARMIST.. GO AHEAD... SHOW YOUR TRUE COLORS...

If you agree with me then Tea Bag Obama... Send a tea bag and a letter showing your disapproval for these constitutional atrocities that he and the ultra left wing SOCIALIST democrat party are trying to force upon us.

Tuesday, May 4, 2010

we got what we asked for!

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Well it has been about a year and a half since Barack Obama became the President of the United States. I have watched and paid attention closely. I have to say I wish that I had been wrong about him, but I was not. What I do not understand is why so many folks that supported him in the last election now say that they do not know who they voted for. They say at least to me, that he is not the person they thought they were voting for. I thought about that for a while and now after consideration I say to all Obama supporters who are now somehow disappointed with the direction this country is heading... WERE YOU LISTENING TO HIM DURING THE CAMPAIGN??

Obviously not... He is doing exactly what he said he would do, He is not trying to hide it because he thinks that he is doing what the electorate put him in office to do. More Government regulations and more restricted freedoms. Oh yeah, I know some of you were hoping he would end the wars, immediately bring our troops home. Unrealistic, but that would be a legitimate beef for some of you disappointed supporters.

I would like for folks to consider the ignoring and outright disregard for this nations founding documents, namely the Constitution, this administration is becoming famous for.

This is were the real damage to the country is being done. For all of you who complained and moaned about the Bush administration's alleged constitutional violations, I submit those will be "child's play" when compared to the current administrations transgressions. So far we have barred witness to a systematic takeover of huge sections of the private sector by the Federal Government. Heath Care, Finance, Big Auto, the list goes on...

But the real question is, how did we get here? We got here because people simply weren't listening. All they could hear was "change, change, change and yes we can" no one bothered to ask what kind of change or yes we can what? Now we have a President who doesn't believe in American ideals and all his life has been taught that this great American experiment is a bad idea and oppressive to the rest of the world. We have a President with a five minute career and no matter what room he walks into, he is the least qualified to be there. So to all of you folks that voted for him in 2008 and who are disappointed as a result, For this great country's sake... PLEASE remember that feeling in November 2010 and 2012 and vote again!!