Big Government Tinkers with the Economy: Americans Bear the Cost and Pain

by Richard H. Frank

What will it take for Barack Obama and Washington politicians to admit the Government does not and cannot create jobs or wealth for our nation?  Every day we hear of another scandal involving some Government-administered program.

Consider the accomplishments of the following Government programs:

  • TARP (troubled asset relief program)
  • Obamacare (Affordable Health Care Act)
  • Stimulus 1 ($787 billion in Government spending for shovel-ready projects)
  • American Jobs Act ($447 billion for infrastructure projects)

TARP allegedly saved America’s financial system.  Banks and insurance companies were given billions of dollars to bail them out of bad investments and the chance to take writeoffs and amend their balance sheets.  Addition billions of dollars were provided to assist homeowners in avoiding foreclosure by modifying their mortgages in an attempt to save their homes.  What happened is that the banks took the money and have elected to withhold the funds from the public in the form of loans, mortgage modifications and encouraging investment in the private sector.

The Government takeover of General Motors and the claim that Obama single-handedly saved America’s automotive industry is another fabrication for the campaign trail in 2012.

The truth is that the American taxpayer can kiss the $56 billion in Government investment in the New  General Motors goodbye forever. Obama will claim $20 billion has been repaid through the sale of Government shares during the first public offering leaving a mere $26 billion to be repaid.  This does not take into account the tax relief of $45 billion granted to the Corporation.  In order to recover the remaining investment, Government shares would have to be sold at $55/share.  Today’s market price stands at $22.32/share with  the year-to-date stock price performance down 39.8%.

Also take notice of General Motors financial performance.  The press releases tout the massive improvement in sales and profits year over year.  The August 4, 2011 earnings report trumpets a profit of $3.0 billion on sales of $39.4 billion.  As an investor I would be hard pressed to buy shares in a company having return on sales of .7% let alone pay $55/share.

The latest example of waste deals with the green energy initiative by the Obama Administration.  The solar panel company Solyndra managed to burn through $535 million taxpayer dollars in just over one year.  Of course, no one in our Federal Government is willing to accept responsibility for oversight of that “investment” even though the Department of Energy held a seat on the company Board.

As for “Obamacare,” the bill that had to be passed to find out what was in it, we are finding out every prediction of forcing companies to drop insurance, cost increases and rationing of care are coming to pass.  When Congressman Wilson said Obama lied during his state of the Union speech, he was correct.  There are now 50 million uninsured because companies are finding it cheaper to drop full-time employees with insurance coverage in favor of keeping part-time workers onboard.

Stimulus 1 turned out to be nothing more than a payoff to big unions in the form of paying the states to increase or keep current Government-funded positions in union represented functions.  The result was Obama’s claim that he had saved or created over 3 million jobs.  Conversely, the private sector shed over 2.5 million jobs during the same period.  Jobs that created value and paid taxes to support the Government jobs Obama takes credit for creating.

As for the “American Jobs Act” it is just more of the same.  An attempt to impose taxes on the “rich” (people earning over $200k/year) and redistribute wealth instead of creating an environment for free market economic growth. When Government is allowed to pick winners and losers the American public is the ultimate loser!

Every economic indicator for growth is negative.  Weekly claims for first time unemployment benefits continue in excess of 400,000. Energy prices rise and inflate the price of every commodity we consume.  Bank foreclosures skyrocket while real estate prices continue to plunge.

Yet, Barack Obama can only see the 2012 election and because his record of accomplishments is virtually non-existent, must turn to demonizing Congress as obstructive to his programs as his only path to re-election.

America will have to endure the albatross of Barack Obama and his Administration for the next 14 months before he can be voted out of office and returned to his role as community organizer-in-chief, living off taxpayer-funded pension the rest of his life.

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