First came the "credit crunch" from Congressional meddling in credit rules. During the Clinton administration, Senator Charles Schumer (D NY) and Rep. Barney Frank (D MA) deemed it a "right" that all people in the US should be able to own their own homes, even if they couldn't afford to pay for them. The then Republican controlled Congress, seeing the "good" that would accrue agreed. Congress then passed legislation that forced Fanny Mae and Freddie Mac to give large numbers of loans to low income families with "no money down". These individuals were then able to borrow up to 150% of the value of the homes...in other words, they were able, with no personal stake in the property, borrow BEYOND the value of the home.
This insanity was increased by relaxing the rules as to the minimum income requirements for loans. These rule changes permitted low income families to receive loans up to 10 times their income, where previously, the "rule of thumb" was no more than four to five times the income. This put the government backed Fannie Mae/Freddie Mac on the road to financial insolvency. In 2003, when then President attempted to change those rules, he was very quietly filibustered in the Senate, thus setting the stage for the present recession.
When banks that were heavily involved in the growing "credit crunch" began to fail, the now Democratic controlled Congress passed the unpopular $750,000,000,000.00 TARP bill that "bailed" out their supporters on Wall Street. Publicly, it is a little known fact that many of the highest paid executives of large investment firms and banks on Wall Street gave millions of dollars to the Obama Campaign, and then the Democratic National Committee when they reached the maximum campaign contribution limits for individuals to a political campaign.
The bailout was ostensibly meant to bail out those banks that were deemed "too big to fail." But a careful review of campaign contribution tells that those banks and investment firms that were first bailed out either had connections to powerful politicians or held retirement funds connected to them. It started with AIG, the investment firm that holds all of the funds that have been set aside for Congressional pension plans. As has been pointed out by another writer on Searchwarp, public pensions are becoming a scandal in and of themselves. Congress is particularly generous with our money with members being fully vested after only a couple of terms, and not the 20+ years required for everyone else. Additionally, their more than platinum plated health care benefits should be a scandal by themselves (more on this below).
With the economy on the verge of collapse, President Obama demanded that Congress pass a "stimulus" bill that was purported to "save the economy". Unfortunately, he deferred to a Democratically lead Congress that has in the past two years (since taking control in 2006 elections) set records for earmarks (earmarks are budgetary items that are placed into bills outside of normal channels AFTER passage, or during the consolidation phase when Senate & House bills are finalized). The "stimulus package" was touted as being able to keep unemployment below 8% and aimed at "shovel ready" projects as well as being used for immediate spending..but was ultimately derailed when special interest constituencies within the Democratic party demanded their cut of the pie.
Instead of being targeted at infrastructure projects that would have jump started the construction industry (China, Germany & India did this, thus deflecting the worst of the recession in those countries), huge amounts were diverted into large block-grants to states and institutions that had no direct impact upon the economy. Thus, while unemployment for blue collar men has risen above 40%, and men in general is above 14%, women's unemployment is well below 10%. This is the largest "gender gap" in our nation's history. Fully half of the $853,000,000,000.00 that has been set aside won't be spent until 2012, a presidential election year. More importantly, the 1,300 page bill was passed prior to many Congressmen and Senators being able to actually read the provisions of the bill...
Then, even as unemployment rose, Congress decided that what was urgently needed was a government takeover of the health care industry, fully 1/6th of the economy. Even as unemployment rises above 10%, and looks to stay there for the foreseeable future, they bicker over hugely unpopular "public options" and ways to drive "evil" health insurance companies out of business. The Obama administration Democratic leaders in Congress has gone so far as to demonize, first those same greedy health insurance companies (who's average profit for the largest 10 companies is below 8% per anum), then anyone who has the "audacity of hope" to oppose that takeover.
Originally, it was envisioned that there would be rapid passage of the "health care reform act" (another 1,300+ page bill for the House version) before the public could learn about the contents of that bill. The Senate bill being pushed by Sen Harry Reid (D NV) now tops 2,200 pages...as more is learned about the provisions of those bills, their popularity with the public has plummeted, with more than 61% now being opposed and fully 42% being STRONGLY opposed to its passage. Less than 21% of the people strongly support ANY of the bills now being. Worse yet, the independent voters who were key to Democratic victories in 2006/8 have begun to move away from that party in droves, supporting a generic Republican in polls by more than 2 to 1. More specifically, in both measures now being considered, Congress with its platinum health care plan, as well as the "gold-plated" plans provided by the Federal government to all Federal employees, as well as those employed by the Executive and Judicial branches of the government, are specifically exempted from ALL provisions of those bills. While the rest of the country will eventually be forced onto the government provided "public option".
Furthermore, all of the bills are being claimed NOT to add to either deficit or debt through a shell game. Both require a four year period wherein higher taxes/fines/fees will be levied upon the country as a whole, fleecing the "rich" especially hard (the "rich" being defined now as those who earn more than $125,000.0 per year), while not implementing the insurance "plans" until the final half of the proposed 10 year plan. In other words, we'll have to pay for four years, to finance six years of a "budget neutral" plan...that's a shell game...if you look at the real first 10 years of the plan and don't include that four year period of increased taxation, then each year, we will add $250,000,000,000.00 to the deficit, and much more than that to the national debt, when the interest payments are figured in...
When a second "stimulus" was being bandied about recently, more than 60% in a Pew Research poll expressed opposition to such a plan, preferring that unspent funds from the first "stimulus" (or "porkulus" as it is now often referred to) be diverted and used on infrastructure projects or others that will actually have a direct impact on the economy. Additionally, the proposed "jobs bill" is gaining stiff opposition from the public as it entails far more deficit spending than is desirable.
The passage of a $1,800,000,000,000.00 budget package this week that force Congress to raise the debt ceiling above its present $10 trillion dollar limit, has raised additional questions as the entire bill will have to be financed with Treasury bonds. That bill will immediately add more to the national debt than George Bush did during his ENTIRE presidency. And he was considered to be a profligate spender.
Now consider the "Cap & Trade" bill which is purported to reduce carbon emissions but is so fraught with exemptions and exemptions to various Democratic constituencies that its provisions are rendered meaningless. When you throw in Mr. Obama's statement last year that he would eliminate all coal fired electrical generation plants by taxing and imposing fees that would make it prohibitively expensive operate. This is supposed to stimulate millions of "green" jobs, but doesn't explain what will happen to the economy when literally everything become much more expensive to produce and distribute (vastly higher gasoline taxes will also be imposed by provisions in the bill). Additionally, a fee of more than $1,700.00 per household will be assessed upon every residential electrical account, as well as a higher fee for natural gas usage. The business fee will be roughly double, except to those favored industries that are granted exemptions under the bill.
On the positive side, ClimateGate has shown what has been touted as "settled" science is anything but. It appears that not only have results been altered to fit predisposed political conclusions. Additionally, the scientists at the centre of the controversy have used influence to not just have unfavorable editors removed from positions, but have perverted the "peer review" process as well. With the Copenhagen conference being thrown into serious doubt of "meaningful" measures to throttle western economies (a useless gesture as both China-who passed the US this year as the largest producer of carbon emissions, and India-who will pass the US early next year- have both refused to abide by any limitations to their economies.). That would be tantamount to economic suicide, which no nation genuinely desires. More importantly, Europe, which has instituted "carbon trading" (the 3rd largest company for this new "business" is owned...by Al Gore, hhmmmm...) can't even abide by it's own self imposed limits and regularly exceeds the targets that it has set for itself.
In a recent column, Byron York revealed that strategists for the Democratic Party are using the following logic to justify their positions.
"In the House, the view of [California Rep. Henry] Waxman and [House Speaker Nancy] Pelosi is that we've waited two generations to get health care passed, and the 20 or 40 members of Congress who are going to lose their seats as a result are transitional players at best," he said. "This is something the party has wanted since Franklin Roosevelt." Under this concept, losing a "few seats if just the cost of doingg something historic." But as Mr. York notes, that its " easy for Waxman and Pelosi to say that, since they come from safely liberal districts." "Because they think they know what's best for the public," the strategist said. "They think the facts are being distorted and the public's being told a story that is not entirely true, and that they are in Congress to be leaders. And they are going to make the decision because Goddammit, it's good for the public." Additionally, the strategist has equated Congressional Democrats "with robbers who have passed the point of no return in deciding to hold up a bank. Whatever they do, they're guilty of something. They're in the bank, they've got their guns out. They can run outside with no money, or they can stick it out, go through the gunfight, and get away with the money."Under that view, they are trying to do everything they can to pass these initiatives and huge entitlement programs under the theory that once in place, they won't be repealed no matter what damage they do to either the party or the country as a whole. I suspect that America, with large numbers of the independents who helped elect, first the Democrat majority in Congress, and then last fall, Mr. Obama are going to punish the party next fall in ways they Democrats don't anticipate. I suspect that Democratic losses will be much larger than are presently seen as possible, especially if the jobless rate continues above 10%.