Posts Tagged Bailout
Cash For Clunkers – Yet Another Government Blunder
Posted by Scott in Entitlements, Environment, Gov't Spending on August 20th, 2009
If you’ve driven by a new car dealership lately, you’ll likely notice the same thing I did when I went out looking to buy a new car. The lots are barren. You’re lucky to find a dealership who has more than one of the model car you’re looking for, and even luckier if it happens to be the right color, with all the features you want.
The recent buying frenzy caused by Cash For Clunkers has diminished the supply of new cars available to dealers to sell, because manufacturers weren’t able to increase production enough in anticipation of the surge in demand. What this has done, is caused an increase in the price of new cars, potentially eliminating most, if not all savings the government incentive program provides.
What’s worse, is that the dealerships who have already made thousands of sales aren’t being reimbursed by the government. One Los Angeles area dealership has said that they have made about 270 clunker deals, and has only been reimbursed for two. That means that this dealership is owed around $1 million from the government. And that’s just one dealership. Nationwide, approximately 2% of all clunker deals have been paid out so far, and 80% of all applications are “rejected for minor oversights”.
Not only is the $3 billion program expensive, it’s clearly inefficient (like any other government program).
Additionally, think back to the lessons learned from the mortgage crisis, where people went further into debt than they could afford, ultimately foreclosing on their homes. If someone is driving around in a “clunker”, they’re probably doing so because they can’t afford to buy a brand new vehicle. They might be better off if they upgraded to a nicer used vehicle, but many of the new vehicles that qualify for the program are expensive. The auto finance companies are loving life right now, but they’ll be looking for another bailout once people start defaulting on their loans.
Come to think of it, why are only new cars accepted in the clunkers program? It seems to me that buying a more fuel efficient used car would be better for the environment than manufacturing a brand new fuel efficient car. Not to mention the environmental impact of increased scrapping of some perfectly good cars. Seems to me like the program is more of a bailout for the automakers than it is an environmental incentive.
Related Posts From Conservative Posts -
Government Charity With the holiday season in full swing, people are becoming... - Bayer, a Cure for More Than Just Pain Usually, I am not the type to sit around and...
Related Websites Not Affiliated With Conservative Posts -
How to Compare Hybrid Cars It is hard to find a comparative ranking for hybrid... - Apathetic Debtor The following guest post is from Neal Frankle of Wealth...
Pay Your Taxes If You Have Political Ambitions
Before Timothy Geithner became the Treasury Secretary, he worked for the International Monetary Fund (IMF). The IMF employs people from all over the world, including Americans. While working there, foreigners don’t have to pay US income taxes, and in an attempt to be fair to the Americans who also work there, the IMF pays the Americans for their share of income taxes.
This doesn’t mean that Americans are exempt from paying taxes in the US. This is a minor detail that Timothy Geithner missed during his tenure with the IMF. Because of the fact that the IMF didn’t pay taxes on his behalf, he was considered an independent contractor, or self-employed. Under the US tax law there is a concept of self-employment taxes, where the individual is both the employer and the employee for all intents and purposes. This means that they have to pay the employer and employee portions of payroll taxes.
Not only didn’t Geithner pay his self-employment taxes, the IMF reimbursed him for what he should have paid had he been a law abiding citizen like the rest of us.
It turns out that this isn’t the last time that Secretary Geithner followed laws as if they were a suggestion, rather than the rule. Turns out that all of the bailout money being paid out by the billions is unconstitutional as well.
Article I Section 9 of the US Constitution states that “No money shall be drawn from the treasury, but in consequence of appropriations made by law…”. This isn’t just a minor point the founding fathers decided to throw into the Constitution.
Secretary Geithner got around this Constitutional issue when the Emergency Economic Stabilization Act of 2008 was passed. According to a report by the Congressional Budget Office, this established the Troubled Asset Relief Program, or TARP as it has become more popularly known. This authorized “the Treasury to purchase $700 billion in assets to alleviate the crisis in credit markets”.
Essentially, this gave him a blank check to hand out $700 billion to “stabilize” the economy. A stabilization effort, which will take years to pay back if any of the bailed out companies go under.
Isn’t it nice of him to hand out our taxpayer dollars when he isn’t even willing to pay his own fair share?
Related Posts From Conservative Posts - What are “Rights”? "We hold these truths to be self-evident, that all men...
- AIG Outrage President Obama lashed out against the plan of AIG to...
Related Websites Not Affiliated With Conservative Posts - How the new tax laws for 2007/08 could affect you. With tax time for 2006 right around the corner, I...
- Where are You on the Inverted Income Tax Pyramid? This being April 14 - and with Mr. ToughMoneyLove having...
Obama’s Vegas Vacation
The Senate Majority leader, Harry Reid, has a fundraiser planned at Cesar’s Palace on the Las Vegas Strip. He’s planning on having headliners, like Bette Midler and Sheryl Crow perform at the event.
Oh yea, he’s also having some guy named Barack show up too.
The trip to Vegas for Obama is a complete 180 from his position on “corporate excesses”, back when bailout recipients were planning trips to Sin City for their high performers. The President was even quoted as saying “You can’t get corporate jets, you can’t go take a trip to Las Vegas or go down to the Super Bowl on the taxpayer’s dime” when talking about the corporate excesses.
I guess he changed his mind.
After all, it’s the taxpayer who footed the bill for the Air Force One photo-op flyover of Manhattan. And come to think of it, it’s also the taxpayer who is footing the bill for the President to fly out to Las Vegas.
I guess we shouldn’t complain though. It’s not like he’s taking the trip to further any “excesses”. I mean Harry Reid has only raised a little over $3 million for his reelection campaign. I suppose that might not be enough if he were running against someone who had a chance of winning. But he’s not.
The President has “flip-flopped” more in the first few months of his presidency than John Kerry did during his entire campaign against George W. Bush, and is leading with the “do as I say, not as I do” mentality, which is prevalent throughout the Democratic party.
I just pray that the important issues on the President’s desk don’t take a back seat to this fundraising initiative that he has decided to undertake. Just think how bad President Bush looked when he “didn’t panic little elementary school kids” on September 11th. God forbid, President Obama interrupts a pointless fundraiser to attend to other national security issues.
Related Posts From Conservative Posts - A Look Back. Three Years Later Three years ago today, our country was under attack. The...
- Supreme Court Takeover President Obama will be faced with appointing someone to the...
Related Websites Not Affiliated With Conservative Posts -
Israel Betrayed by President's Shift on US Middle East Policy [/caption] WASHINGTON: Obama's willingness to offend our allies while coddling... - Athlete Profiles: Andre Agassi Andre Agassi has become a fixture in the tennis world,...
Lucky Strike Museum
Posted by Scott in Gov't Operations, Gov't Spending on April 19th, 2009
Remember back in the late 1990’s, when the tobacco companies were sued? They were ordered to pay over $240 billion to 46 states over the course of 25 years to fund the health costs associated with smoking and chewing tobacco.
According to an article on Townhall.com, roughly $80 billion has been paid out so far, and of that amount only 30% has been spent on health care programs, while only 6% was spent on smoking cesation programs.
So where did the other 70% go? It must be sitting in escrow somewhere right? Wrong. The states have spent this money on things like museums, tax relief programs, and other non-health related programs.
The reason why, is that the states are not bound by any formula or criteria for spending the money. They essentially said to trust them to do the right thing. The right thing for who is the question we’re now left with.
It becomes a public outrage when big corporations like AIG “inappropriately” spend their bailout money to send their employees and agents on outings to Las Vegas. But when the states do essentially the same thing, no one makes a peep.
Where’s the outrage? Where are the demands to pay back the inappropriately used funds? More importantly, why aren’t the tobacco companies suing the states for the misappropriation of their funds?
Related Posts From Conservative Posts - Elected Spendthrifts I was searching around the web a few days ago...
- American Dream The American Dream, as far as my research can tell,...
Related Websites Not Affiliated With Conservative Posts - Monday Morning Money - Spent Barely Anything This Weekend Edition Well, its Monday...again. And even though it is the start...
- So, where do you keep YOUR money? I received an email this weekend asking about good places...
Remedy for a Bad Economy
It seems these days that everyone is on the Government bailout bandwagon. Not just in the United States, but all over the world, people are crying out to their governments to bailout failing companies. What’s worse is, it’s happening.
I question these people who say that a government bailout is the only way a troubled economy will right itself. I question why these people think that the government will be able to effectively run the nations largest banks, insurance companies and automakers. What has the government ever done that was efficient, or well run?
The perception that the government is the cure-all solution for our economy, goes back to the “woe is me” philosophy that is plaguing society. “I can’t get a job…government please support me”, “I can’t get a loan…government please fund me”, “A hurricane wiped out my neighborhood…government give me a place to live”, “I can’t keep my company afloat…government please bail me out”. These situations all have one thing in common. Someone is taking taxpayer money while doing literally nothing to earn it.
Businesses and their executives are being barraged by negative media to look inept. Government is being viewed as the knight in shining armor, who will slay the evil “Wall Street Dragon”.
Companies who take government bailout funds (and individuals who take handouts for that matter) are only placing a band-aid over a severed limb. It gives the appearance of trying to stop the bleeding, but without serious attention, the patient is going to bleed out.
The companies who are going to come out on top of this whole mess are the ones who anticipate where the shortfalls in the economy will be, and adjust their business strategies to take full advantage.
The companies who are going to fail are the ones who think that they can get by with a band-aid to weather the storm.
Related Posts From Conservative Posts - Bayer, a Cure for More Than Just Pain Usually, I am not the type to sit around and...
- Universal Healthcare - Who Does it Help? Ever since Canada and many European nations began universal healthcare...
Related Websites Not Affiliated With Conservative Posts -
The luck of the Aussies Australia is famously known as ‘the lucky country’. Although this... - Credit card companies can profit from Haiti donations all they want This Huffington Post article puts a big spotlight on all...
Shape Up Automakers…Or ELSE!
President Obama told the US auto industry to shape up, because we can’t keep a permanent flow of cash into their hands. Essentially, he said the bailout funds are going to run dry for the auto industries, if they don’t show that they have a plan to save themselves.
In the same speech, however, President Obama also said that we won’t let the US auto industry simply vanish. To me this seems contradictory.
The short deadlines given to Chrysler and GM, are forcing moves such as a potential merger with Italian automaker Fiat. This may not be the best move for Chrysler, but given the accelerated deadline, it may be their only option. It seems to me as if the Obama administration is forcing the US auto industry to make hasty decisions, for possibly no other reason than to gain popular support from the public.
Granted these companies, in my opinion, wrongfully took taxpayer bailout funds, and should have to be held accountable for what they do with the money. I just don’t think that it makes sense to force them to make moves for the sake of “getting something done”.
Sometimes good things come to those who wait.
Related Posts From Conservative Posts - Clunker Drivers Have Been Bailed Out...Where's The Outrage? It was less than a year ago when Wall Street...
- Cash For Clunkers - Yet Another Government Blunder If you've driven by a new car dealership lately, you'll...
Related Websites Not Affiliated With Conservative Posts - Weakonomics Economic Review of 2008 Whew! What a year 2008 was. The financial industry collapsed,...
-
Text of President Obama's State of the Union Address [/caption] Remarks of President Barack Obama The State of the...
Government Owned Companies
Posted by Scott in Gov't Spending on March 25th, 2009
With all the recent investment by the government into banks and other publicly traded companies, one has to wonder, is the government really the best organization to run these companies?
In the private sector, a company will spend millions of dollars on a single executive’s pay each year. This isn’t because the companies are wasteful or the executives are greedy. It’s because this is what the executive’s experience is worth in the free market.
If you work at McDonald’s for $8/hour, it’s because [a] you haven’t done well on your executive level interviews, or [b] that is what your experience is worth in the free market.
When a person takes a position in the government, no matter at what level, they are either doing so to fulfil a civic duty or because that’s the best job they can get. No one in government, whether they are working to fulfil a civic duty or not, is making executive level salaries. It’s not because the government is poor and can’t afford to pay these salaries. It’s because the experience they are receiving isn’t worth an executive level pay. Granted there are people with executive level experience who work for the government who don’t make executive level pay. These people are working for the government to fulfil their civic duty.
My point here is that in a free market, quality experience is well compensated. The government does not have an abundance of quality experience, and their employees are compensated as such. Why then, do we as a society think that the government has all the answers? Why do we think that they will be able to solve all of our problems if the private sector has yet to solve them?
The answer is they can’t, without imposing heavy taxes upon the American people.
Think about it. All the companies who are asking for bailout funds, are looking at a few billion dollar loss per year. The US government is forecasted to hit a $1.8 trillion deficit this year. Even in a surplus year, the government does nothing to earn a single dollar. They only regulate the ins and outs through taxation and government spending.
Related Posts From Conservative Posts - It Would Never Happen to Me... Our daily lives are full of comfortable situations. We wake...
- Clunker Drivers Have Been Bailed Out...Where's The Outrage? It was less than a year ago when Wall Street...
Related Websites Not Affiliated With Conservative Posts - A Painless Way To Reach 1,000 Extra People In 2010 On A Shoe-string Budget. One of the foremost common queries we get from smaller...
-
Insurance Companies May Not Be The Healthcare Cost Enemy Farm and construction machinery, Hershey sweets, Yahoo!, railroads, and Tupperware. ...
AIG Outrage
President Obama lashed out against the plan of AIG to pay roughly $165 million in bonuses after accepting about $170 billion in bailout money. He was quoted saying that the bonuses were an “outrage”, violating “fundamental values”, which underscore the need for financial regulatory reform.
I’m curious. Which fundamental values is President Obama referring to?
It couldn’t be the fundamental values of a capitalistic society. If he was, AIG shouldn’t have gotten a dime from the government in the first place. After all, we are still a capitalistic society aren’t we?
Come to think of it, if that was what he was referring to, there wouldn’t be a “need for overall financial regulatory reform” either. The free market would be left to allow bad companies to fail and good companies to prevail.
The fundamental values of a free market shouldn’t allow the government to interfere – that’s why it’s called a free market.
To add insult to injury, Treasury Secretary Geithner said the administration will require the top banks receiving federal aid to include small-business loans in their monthly reports. “We need you to put that assistance to work for the American economy,” he said. Not only do these companies have to recover from one of the worst economic times they probably have ever faced, but now they’re going to be pressured to make small business loans with the bailout money they received.
So what happens once these small businesses go under? Is AIG going to be left holding even more bad loans? Are we going to have to pump even more money into AIG if they start making loans to struggling businesses who ultimately will never be able to pay the loans back?
Businesses come and go. The strong ones just stick around a little longer. If AIG was destined to fail in 2008, we should have let it fail. The same goes for GM, Ford, and any other business that was determined to be “too big to fail”.
Related Posts From Conservative Posts - Battle of the Acronyms People for the Ethical Treatment of Animals (PETA) have launched...
- Whoopi & Barbara Blindside Glenn Beck Glenn Beck, for one reason or another, agreed to be...
Related Websites Not Affiliated With Conservative Posts -
Network Marketing - The Real Way To Team Build Online Network Marketing Fundamentals Not long ago people where running around... - Online Business: The Most Popular Types For You To Choose From Are you faithful person and you want to deal with...
-
Poll
Loading ...
Follow On...