Manage Your Life

Tuesday, December 8, 2009

When did a billion dollars become mundane chump change?

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$1,000,000,000 that is what 1 billion dollars looks like. According to an AP news story, Congress is proposing a $410,000,000,000 budget package that includes "thousands" of earmarks totaling 10%, or $3,900,000,000 in additional spending.

Earmarks are items added to a house or senate bill that are not debated. They are just attached, and if the base bill passes, so does the earmark. There is no line item veto so the president can't say yes to 10 earmarks and now to 500. The entire bill either passes or is vetoed.

Earmarks are pet projects that individual congressmen and ladies add to bills to bring money to their state/community. Practically every bill that passes through congress has earmarks attached.

We heard about Change last year. Yes, we have change: more spending. Democrats defeated the Republicans in part on their excessive spending. Now, we have even more excessive spending.

$1,000,000,000,000 (trillion) was passed a short few weeks ago for a Stimulus Package that we were told we had to have to avert the economic crisis. I say $1,100,000,000,000 even though it was $878,000,000,000 only that didn't take into account the interest that will be paid: first year the interest will be roughly $200,000,000,000, and each year going forward that interest will be compounded as spending will continue to be at a deficit rate.

About 40% of the Stimulus Package was identified to contain potential stimulus. The rest was for pet projects. Call the rest 60% earmarks for projects and spending the Republicans didn't support. It would be like taking a boat load of merchant marines that have been at sea for 9 months and turning them loose in Las Vegas for 2 weeks.

This is the same as living off credit cards, making the minimum payments, and borrowing more each month never reducing the principle amount owed and allowing the interest to be added on top of the principle for things you'd love to have, not food or medicine or shelter, things you'd love to have.

We were told how bad banks were by loaning money to people they knew didn't qualify for a mortgage or in reality couldn't afford to eventually make the payments. That these people, subprime they nicely called them (in the 1980s these types of loans given to corporations were called "Junk Bonds" as they carried high interest rates associated with the risk). The subprime borrowers were described as being duped and tricked into these loans. It wasn't their fault. They were also told that they could just sell their house for a profit if they need the money in the future as their homes would appreciate in value. So now the taxpayers are paying off these loans, and in many cases, these people benefit by not losing their homes.

The government is spending money it doesn't have by betting on future economic growth. This is the same logic that is used for Social Security and Medicaid only the pool of taxpayers that pays into these programs is shrinking as the largest pool of people to pay in (Baby Boomers) start to retire. This is the same government that is proposing how to fix the economy. Had Social Security and Medicare surplus tax collections been truly set aside in a real trust fund, and not spent in the General Fund and replaced with IOUs, there would be vast amounts of retirement money available and we'd never need to add money to our 401k programs.

  Put another way, the government is spending your money without even asking even through polls consistently show Americans are against earmarks and deficit spending. 
When does it stop? The only tool we as Americans have is our vote. Outrage at the Republicans brought Change, only no one was told that the Change would be even more spending without our permission.
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