The stock market, already falling before Obama spoke, saw selling accelerate as Obama made it clear he had no new ideas to offer. And he certainly gave no hint that he’s ready to adopt Republican ideas such as cutting business taxes or slashing regulation. Instead of a pivot, Obama stayed firmly planted in the anti-growth policies of the past two-and-a-half years. He’s even keeping Tim Geithner as Treasury secretary, practically begging the poor guy to stay. (Indeed, it was almost exactly a year ago that Geithner penned his “Welcome to the Recovery” op-ed.)
You’ll find complete PDF and text versions of the final stimulus bill right here. Scroll down to page 16 (of 407!) in the PDF version and behold:
For an additional amount for ‘‘State and Local Law Enforcement Assistance’’, $40,000,000, for competitive grants to provide assistance and equipment to local law enforcement along the Southern border and in High-Intensity Drug Trafficking Areas to combat criminal narcotics activity stemming from the Southern border, of which $10,000,000 shall be transferred to ‘‘Bureau of Alcohol, Tobacco, Firearms and Explosives, Salaries and Expenses’’ for the ATF Project Gunrunner.
Please Keep in mind that Gunrunner is a long-term cartel weapons interdiction program that kicked off during the previous administration. there is no indication that Gunrunner has ever been anything but above-board. The program/project framework has long been used in business and government, with the program being the general vision, with individual projects.
… Gunwalker/Fast and Furious was a specific secret operation or project within the much larger framework of Gunrunner. A list of all operations with the Gunrunner program is not publicly available, but I would be stunned if the total number of projects wasn’t several dozen, or more, with many or most of them being covert and unknown to the public.
Gunwalker and Gunrunner are not the same thing even though they are related. We have enough evidence coming in—at a pace “fast and furious,” one might say—and do not need to make leaps of logic. There is no need to jump the gun or make wild accusations.
How much of Gunwalker, then, was financed by the stimulus?
In updated forecasts released after the meeting, Fed officials lowered their growth forecasts and predicted core inflation would remain higher than previously thought. The economy is now expected to expand at a rate of around 2.7% to 2.9% this year and 3.3% to 3.7% in 2012. That is below estimates given after the last meeting in April for growth of 3.1% to 3.3% in 2011 and 3.5% to 4.2% next year.
The 2011 projection for underlying inflation—stripping out volatile food and energy costs—was raised to between 1.5% and 1.8% from April’s forecast of 1.3% to 1.6%, with core prices expected to ease to 1.4% to 2.0% next year instead of 1.3% to 1.8%. The unemployment rate is expected to decline to 8.6% to 8.9% in 2011 and 7.8% to 8.2% next year, versus previous expectations for a drop to 8.4% to 8.7% and then 7.6% to 7.9% in 2012.
The jobless rate increased to 9.1% in May, a level that would normally call for looser credit. But with underlying inflation also showing the biggest in almost three years, the Fed is in a challenging spot. Consumer prices net of volatile food and energy prices rose to a 1.5% annual rate last month, close to the Fed’s informal target of just under 2.0%.
About the only good news in this is that there won’t be a QE3.
Fed Chairman Ben S. Bernanke has said record-low interest rates are still needed to spur a recovery that remains “frustratingly slow” two years after the recession ended. Consumer spending has been held back by falling home values, accelerating inflation and an unemployment rate that rose to 9.1 percent last month. At the same time, Bernanke has said growth is likely to pick up as commodity costs recede and factories overcome disruptions of supplies from Japan.
The Fed left its benchmark interest rate in a range of zero to 0.25 percent and repeated a pledge to keep it there “for an extended period.” The decision was unanimous. In his press conference, he said an “extended period” means the Fed is at least two or three meetings from an exit.
Not only did the White House cite the projected cost at $32 million, but Amtrak used that figure in a 2009 press release documenting its Delaware projects.
But Ms. Hunter, the Amtrak spokeswoman, said the company’s original budget for the renovation was actually $35.7 million: with $20 million from stimulus money; $12 million from Delaware’s Department of Transportation; and $3.7 million from Amtrak itself. Ms. Hunter said the final cost reached $37.7 million when Amtrak added $2 million worth of work that was not part of the original scope of the project.
In its official Recovery Act report, Amtrak gave a different figure altogether — $36 million to the dollar — for the refurbishing project. And it said the breakdown in funding was $20 million in stimulus funds and $4 million from a 2009 federal grant, in addition to the $12 million from Delaware DOT.
What the rail company’s CEO and his counterparts left behind was a train that remained stranded in Baltimore for more than two-and-a-half hours as Amtrak engineers scrambled to repair a broken transformer outside of Philadelphia. The train, like many others, lost electricity, including the power to flush toilets. Passengers were allowed to stretch their legs on the station’s platform.
Others followed the railroad officials’ lead — frantically arranging to rent cars or find transportation to an airport. The train that the three were riding, which left Washington at 9 a.m. began moving again at 12:28 p.m. — roughly 2 hours and 45 minutes behind schedule.
President Barack Obama will call for new government spending on infrastructure, education and research in his State of the Union address Tuesday, sharpening his response to Republicans in Congress who are demanding deep budget cuts, people familiar with the speech said.
Mr. Obama will argue that the U.S., even while trying to reduce its budget deficit, must make targeted investments to foster job growth and boost U.S. competitiveness in the world economy. The new spending could include initiatives aimed at building the renewable-energy sector—which received billions of dollars in stimulus funding—and rebuilding roads to improve transportation, people familiar with the matter said.
Since spendulus worked so well at stimulating the economy and creating jobs, you mean?
He’s kidding, right? Didn’t we just piss away $862 billion we don’t have on the Exact. Same. Thing? Or are these different green jobs and infrastructure projects than those other ones?
Senate Democrats have filed a $1.1 trillion omnibus spending bill that would fund the government through fiscal year 2011, according to Senate GOP sources.
The 1,924-page bill includes funding to implement the sweeping healthcare reform bill Congress passed earlier this year as well as additional funds for Internal Revenue Service agents, according to a senior GOP aide familiar with the legislation.
The $1.2 trillion bill, released on Tuesday, includes more than 6,000 earmarks totaling $8 billion, an amount that many lawmakers decried as an irresponsible binge following a midterm election in which many voters demanded that the government cut spending.
The bill includes $18 million for two nonprofits associated with deceased Democrats, the late Sen. Edward M. Kennedy and Rep. John P. Murtha;
Pork for the swine!
$349,000 for swine waste management in North Carolina; and $6 million for a rural Iowa school program named after Sen. Tom Harkin (D-Iowa).
But McConnell, like other new earmark opponents, stopped short of asking for his projects to be removed from the bill.
And I’d like to know, why should the Republicans consider at all anysignificant legislation proposed by the Democrats at this point? Le·gal In·sur·rec·tion has a plausible explanation,
The Omnibus Bill is Reid’s bargaining chip. Reid will agree to pull the bill and submit to a continuing budget resolution to fund government for a couple more months, in exchange for Republican cooperation in getting votes on New START, DADT, judicial nominations, and other non-budgetary legislation.
Republicans should not accede to this tactic under any circumstance. Call Reid’s bluff. Force Democrats to pass the Omnibus Bill if they can muster the votes, and Obama to sign that monstrosity.
Barack Obama won the great tax-cut showdown of 2010 – and House Democrats don’t have a clue that he did. In the deal struck this week, the president negotiated the biggest stimulus in American history, larger than his $814 billion 2009 stimulus package. It will pump a trillion borrowed Chinese dollars into the U.S. economy over the next two years – which just happen to be the two years of the run-up to the next presidential election. This is a defeat?
Some Republicans are crowing that Stimulus II is the Republican way – mostly tax cuts – rather than the Democrats’ spending orgy of Stimulus I. That’s consolation? This just means that Republicans are two years too late. Stimulus II will still blow another near-$1 trillion hole in the budget.
At great cost that will have to be paid after this newest free lunch, the package will add as much as 1 percent to GDP and lower the unemployment rate by about 1.5 percentage points. That could easily be the difference between victory and defeat in 2012.
Obama is no fool. While getting Republicans to boost his own reelection chances, he gets them to make a mockery of their newfound, second-chance, post-Bush, Tea-Party, this-time-we’re-serious persona of debt-averse fiscal responsibility.
And he gets all this in return for what? For a mere two-year postponement of a mere 4.6-point increase in marginal tax rates for upper incomes. And an estate tax rate of 35 percent – it jumps insanely from zero to 55 percent on Jan. 1 – that is somewhat lower than what the Democrats wanted.
-Indian employment tax credit.
-New markets tax credit.
-Railroad track maintenance credit.
-Mine rescue team training credit.
-7-year recovery period for motorsports entertainment complexes.
-Accelerated depreciation for business property on an Indian reservation.
-Election to expense mine safety equipment.
-Special expensing rules for certain film and television productions.
-Expensing of environmental remediation costs.
-Deduction allowable with respect to income attributable to domestic production activities in Puerto Rico.
-Tax incentives for investment in the District of Columbia.
-Temporary increase in limit on cover over of rum excise taxes to Puerto Rico and the Virgin Islands.
-American Samoa economic development credit.
Because after a few days of chuckling and gloating over taking the Obama White House to the cleaners with the deal to extend, among other things, the Bush era tax cuts of eight years of failed policies fame, a number of prominent conservative voices are now awakening in opposition.
They’ve added up the costs of all the provisions, including 56 more weeks of unemployment insurance for millions.
And they realize that the total bill of the bill is larger than the original Pelosi-Reid stimulus bill’s bill that accomplished so little. And they realize now that nearly a trillion new dollars will be added to the deficit that the newly elected GOP folks are coming to town to tame.
I hadn’t posted on this because I simply couldn’t find the words to crystallize my contempt for the Congressional idiots that went along with this spendulus. But they are not idiots, they are politicians. As Melissa points out,
The Republicans in Congress are also statists. That is, they absolutely love their power. They love spending your money, too. And they know the jig is up, or they at least have to pretend it’s up in January. So they have a small window to get through a massive spending bill where they can still blame the Democrats if the economy doesn’t turn around.
Same old, same old, politics. And the Americans are screwed, again.
In the third quarter of 2010, for example, state and local governments received $132 billion in stimulus grants at an annual rate. In that quarter they borrowed $136 billion less at an annualized rate than they had in the fourth quarter of 2008, even though their revenues from all other sources were only $76 billion higher.
The bottom-line is the federal government borrowed funds from the public, transferred these funds to state and local governments, who then used the funds mainly to reduce borrowing from the public. The net impact on aggregate economic activity is zero, regardless of the magnitude of the government purchases multiplier.
This is not the first failed stimulus (emphasis added),
This behavior is a replay of the failed stimulus attempts of the 1970s. As Gramlich found in his work on the antirecession grants to state and local governments: “A large share of the [grant] money seems likely to pad the surpluses of state and local governments, in which case there are no obvious macrostabilization benefits.”
The implication of our empirical research and Gramlich’s is not that the stimulus of 2009 was too small, but rather that such countercyclical programs are inherently limited. The lesson is to beware of politicians proposing public works and other government purchases as a means to stimulate the economy. They did not work then and they are not working now.
Taking money from the taxpayers does not stimulate the economy. Never had, never will.
The Fed lowers economic expectations for 2011 and the economic forecast isn’t pretty: Moderate growth will continue (it’s currently at 2.5%), the unemployment rate will likely go down to 9% a year from now, and inflation may rear its ugly head if unemployment goes to 6% range – hardly surprising considering how the Fed has been printing money like crazy, including its latest move, the QE2, Ben Bernanke’s brainchild.
QE stands for “quantitative easing”, the cruise-evoking euphemism for what amounts to a second spendulus stimulus. We’re already seeing how well the first stimulus worked, considering how Obama’s argument was that we needed the stimulus to keep unemployment at 8%.
The QE2 is that plan to buy $600 billion Treasury bonds in the hope of increasing growth and keep interest rates low. Skeptics like myself see it as paying off your MasterCard with your Visa.
The Fed is not without its dissenters,
the document also leaves little doubt that several Fed officials remain uneasy with the action. Some anticipated that they would have only a “limited” effect on the pace of recovery, arguing the action should only be taken if the odds of deflation “increased materially.”
And several “noted concern” that the action “could put unwanted downward pressure on the dollar’s value in foreign exchange markets” or “an undesirably large increase inflation.”
Commodity prices have already increased following the Fed’s QE2 proposal. The move is a deliberate devaluation of the dollar.
One can’t expect the Fed to come up with a more optimistic forecast right now. For starters, the data doesn’t lend itself to a rosy outlook. While unemployment figures may improve on a month-to-month basis, employers have many reasons to continue to remain reluctant to add to payrolls. Also, the Fed’s new quantitative easing plan would come under more fire if they make optimistic predictions that don’t pan out.
How will this economic outlook affect politics in 2011? Paul Mirengoff takes a look and sees the probability of the Democrats moving away from a hard-left agenda.
I hope Paul is correct, but as a pessimist, I also see it as an opportunity for the Dems to justify a hard-left agenda, blaming everything that can possibly go wrong (which it will), on the Republican Congress, right in time for the 2012 election, when unemployment supposedly will be at 8%.