Thursday, January 8, 2009

Backasswards… Obama Warns Of Depression-Like Conditions Without Stimulus and Wants to Backstop Municipal Bonds – Yikes!

Obama may be the new kid in town…

The Eagles, New Kid in Town:

RTT News
Obama Warns Of Depression-Like Conditions Without Stimulus
1/8/2009 9:52 AM ET

(RTTNews) - President-elect Barack Obama's full-court press to boost his plan for economic stimulus will continue Thursday, when he will warn that without drastic government action "a bad situation could become dramatically worse."

According to excerpts of the speech released by the Obama transition team, the president-elect will warn that "If nothing is done, this recession could linger for years." The economic stimulus needs to be passed swiftly Obama said, painting his pleas with a sense of deep urgency.

"For every day we wait or point fingers or drag our feet, more Americans will lose their jobs. More families will lose their savings. More dreams will be deferred and denied" he warned.

"And our nation will sink deeper into a crisis that, at some point, we may not be able to reverse," Obama added.

Such a dire outcome includes unemployment above 10 percent, a GDP over $1 trillion below its full capacity, the inability of Americans to afford college, and the loss of the U.S. economy's "competitive edge" and global standing.
Obama simply doesn’t get it. The math doesn’t work (Death by Numbers) and he is sacrificing our freedom and security with this type of backassward thinking (My MONEY 'tis to thee...). At some point people will be forced to acknowledge that is the STIMULUS that will ensure a depression, not avoid one. When will that day of recognition come? Soon. Unfortunately, the drug addict analogy works – we won’t acknowledge the real problem until we’re lying on the floor, and we’re getting close to that time now, thus recognition will not be far behind now.

Here’s another one that defies all sense of free markets and will ultimately end very badly for all of America:

New Muni Backstop Proposed - Obama
By Stan Rosenberg

The incoming Obama administration is proposing a coordinated effort by the Federal Reserve and the U.S. Treasury Department to provide a funding backstop for the $2.7 trillion municipal-bond market.

The clogged market, in which all issuers but the most creditworthy have had difficulty accessing funds, has been clamoring for such a move.

The backstop being advanced calls for the Fed and the Treasury to design a facility similar to the program set up for the commercial-paper market that has helped ease financing conditions for U.S. companies in need of short-term funds.

"The Federal Reserve should determine whether it has sufficient legal authority to establish such a facility on its own," according to the official transition team Web site, "If not, it should work with Treasury and the Congress to achieve this goal.
Why would protecting municipal bonds be necessary? Because the government stimulated their way to a bubble economy and now the math no longer works. Municipal revenues are falling while their expenses are climbing. Municipal defaults are coming, that’s why.

…But Obama’s actions, like those of all the Keynesian stimulus proponents are simply acts of desperation!

The Eagles, Desparato: