Obama is making speeches. He's good at that. He says that federal health care, education, and alternate energy are "investments" that will pull the economy out of its death spiral.
Oh really? Let's go one by one. Health care. The real problem with health care is we put too much money into it. We put 16% of GNP into health care. That's twice as much as any other country in the world. Health in the United States is no better than health in the other industrialized countries. Life expectancy, and infant mortality are just as good overseas as they are in America. But in America we spend ("invest") twice as much money on health care.
This is a disaster. The cost of American products is jacked up 16% just to pay the worker's health care. Our overseas competitors products only get marked up 8%. Guess who wins the contract? Or, why is production moving overseas (outsourced)? To get away from the 16% of GNP health care cost imposed upon American produced goods.
Obama is pushing universal health insurance. Want to bet that greater health insurance coverage will increase the percentage of GNP "invested" in health care? In short, Obama's universal health insurance push will make a bad situation worse.
Education? We have college graduates running out of our ears. There are so many excess college graduates that we have them driving cabs and waiting tables. And we graduate too few scientists and engineers and too many black studies, women's studies, education, sociology, and other silly studies majors. We don't need more college education to save the economy. We need more economy to offer jobs to the college educated.
The one place American education needs help, the inner city ghetto schools, just got a kick in the head. Charter schools got defunded in Washington DC. And Obama didn't speak out against it.
Alternate Energy? Windmills and solar panels. Cool and oh so green. Very expensive. And useless. The electricity has to stay on all the time. Windmills get becalmed, and the sun goes down at night. So responsible electric utilities have to build real power plants to handle the load. Most of your electric bill goes to paying the utilities mortgages on plant and equipment. Fuel costs are small compared to capital costs. Alternate energy spending just raises capital costs. You have to pay for just as many real power plants plus the alternate energy plants. Alternate energy could double electricity costs.
In short Obama's plan[s] to pull us out of Great Depression II mean dumping more money into health care, paying more college tuitions, and raising the price of power. Does not sound like a winner to me.
2 comments:
Neither Obama nor the rest of our government will be able to solve this finacial boondogle until they all start admitting WHY it happened in the fist place. Pure and simple, the greed of Wall Street investment groups, pushing the price of crude oil to the moon, caused it all.
When crude prices started rocketing with no actual shortage to cause it, I knew then and told anyone and everyone that if it did not stop that the economy would see a crash the like of which had never been known before.
Sure as can be, that is exactly what happened. You can't take BILLIONS of dallars that consumers would normally be spending on goods and services and just redirect it without consequences.
The same can be said of the extra cost for fuel which all business owners had to contend with. If the high prices didn't drive them out of business, the lack of business in the aftermath did.
The only answer here is that we needed to return our spending money to us so that we could jumpstart the economy by SPENDING it where it was meant to be spent. Handing it out to ailing businesses and pet government projects will NOT get the economy going again.
Pass this along to everyone you know!
I agree that the fuel price spike last summer did a lot of damage to the economy. But in my view the housing collapse is the root cause of Great Depression II. And that collapse was caused by Fannie Mae and Freddy Mac, both government agencies.
Fannie and Freddy created the market for mortgage backed securities, they were willing to buy all the dodgy paper the Wall St brokerage houses were willing to print. So the brokerage houses offered to buy any low quality mortage that the likes of Countrywide were willing to write. And thus zillions of mortgages were written that never should have been written, the free flow of money encouraged builders to build more, and the price of houses jumped way too high. The price of a house is set by what the bank is willing to lend on it. As long as Fannie & Freddie were buying, the banks were willing to lend unreasonable amounts of money on houses. Now that mortgage backed securities have turned into toxic waste, more rational house appraisal values prevail and those who bought in the last few years find they own the bank more than the house is worth.
Now the building business is dead, all the industries that serve home building are dead, and consumers are either in danger of losing the home or losing their equity, no wonder they have stopped buying anything except groceries.
The US economy is in trouble as long as the consumers fear losing their houses, their savings and their jobs. 70% of the US economy used to be consumer spending. When consumers stop spending to save for a rainy day, the economy is in the ditch.
Post a Comment