I don’t know about you but I’m having a hard time wrapping my mind around this new stimulus package especially with the news that AIG just reported a fourth-quarter loss of $61.7 billion, the worst corporate loss in US History. I hope that retreat was fun? And didn’t we just give them $123 billion, why should we give them another $30 billion, what’s that going to do? As far as I can tell this second round of bailouts for AIG isn’t covered in the $819 billion Stimulus package just passed by the House and Senate.
I want to know, where is all this money coming from. I heard Senator Mitch McConnell (R-KY) say in a press conference that in President Obama’s first month in office we have spent more money then we have in the war in Iraq over the last 6 years. Now I am not here to debate the war, but I do find it interesting that people have gotten so worked up about the money spent in that venture but I haven’t heard much complaining about this stimulus package spending.
If you want to see a real clear and easy breakdown of the spending check out this article in the Washington Post, they’ve got a great diagram.
I have never claimed to be a great financial mind, but I do like to think that I at least have some basic understanding of how things work economically, so here is my take on what’s going on.
President Obama is tasked with huge responsibilities similar to those that FDR faced. I can’t help but wonder if we won’t hear about a Newer Deal to imitate the government initiatives instituted by FDR that helped our country recover from the Great Depression. (One such initiative was the Tennessee Valley Authority (TVA), which my Grandmother worked for.)
When you look at the Washington Post diagram you will see that there are quite a few government generated jobs that will be the product of this stimulus plan like: repairing roads, expanding broadband services into rural areas, law enforcement assistance, etc., reminiscent of the jobs created through the Works Projects Administration or WPA. Personally this is how I like seeing money spent, in a tangible and visible way.
I am sure in the grand scheme of things giving more money to AIG is important but I don’t yet understand why, but I’m still looking into that. Too me it seems like the money is being thrown in the fire.
Much like the mortgage assistance plans I keep hearing about. I know times are tough for homeowners and in many cases to no fault of the home owner, but here’s where I take issue. I understand that in these economic times a lot of people have lost their jobs and are now unable to pay their mortgage, because let’s face it, unemployment pays you pennies on the dollar. Those people I think need assistance, but people that bought a bigger house than they needed or got suckered into an adjustable rate mortgage that has now adjusted and raised their monthly payment above their income level do not deserve a bailout.
I know that makes me sound mean and callused but the reason I feel this way is because no one is helping me so why should I pay more in taxes help bail other people out. Yes I know that if houses around me start going into foreclosure than my property value goes down. . .but maybe, just maybe this ridiculous housing bubble needed to burst to bring us all back to reality?
Like I said before, I am not a fiscal guru nor have I ever claimed to be but when it all boils down, these are the details I’m trying to sort out. . .
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