How many times over the years when there is a bit of mystery or scandal have you heard the pundits tell you to follow the money? That was the catch phrase also during the Watergate hearings. It is repeated often and with good reason. It usually will reveal the truth and if not completely satisfy all questions it will certainly provide some great insight to any issue. In politics, economics or even in personal relationships following the money will often make you see things in a different light and even expose those cockroaches that you only see briefly when you turn on the light.
With all the furor now about our economy and the spectre of new taxes on ever turn, the stimulus packages, the bailouts and the “free money” being dumped out of a the proverbial helicopter by the Fed, it might be interesting to track some of our money already spent and/or committed. The bailouts came first so let’s begin there. We put up 700 billion that was specifically supposed to buy toxic assets from the big banks. There were too big to fail we were told. Of course in fairness we must take note of the fact that several of the banks did not want the money and that it was demeaning to their brand. But Paulson insisted as only those government ogres can. The money was used to by stock for the most part in the banks not those toxic assets. That money was in turn used to pay…..well, I am not sure we have had a meaningful accounting of those monies yet. At least about half that money has been returned with interest so far. But the current Administration has made plain that it intends to spend the money again for another stimulus package. Of course the US borrowed the money to give the banks in the first place; it didn’t have a bunch of cash on hand, or if it did then we taxpayers are getting scammed worse than we thought.
About the same time we bailed out AIG to the tune of around 175 billion. We know that most of that money went to large investment bankers on CDS and derivatives. Many of them were overseas and not even US companies. With recent sales AIG is supposedly ready to return about 35 billion. Most recent estimates put the total loss there at 100 billion give or take, but who is counting. Certainly not Tim Geithner. At least I hope it is not him, he can’t even keep his own taxes straight.
Then we all got to become owners of Government Motors and Chrysler. That bill so far has been about 85 billion and there is much more to come since the unions in fact did not make really substantial concessions in spite of their outcry. Do you truly believe they will become profitable in the near future? If you do let me show you some nice Florida condo projects I have for sale. You think they will be making zillions selling those Volts for 40 grand a pop and you get a whopping 40 miles, if the weather is nice, and then have to spend 12 hours at minimum to recharge the thing? Of course everyone will be excited to spend thousands more in a couple of years when the batteries have to be replaced plus labor costs. Let’s follow the money. Your taxes or your credit is used by Government, Inc. to run GM. Those workers get wages and benefits. They pay taxes on some of this but not their health benefits. But do you think they pay enough back in taxes to even cover the costs of operating GM and covering the long term pension and health costs of the union members? What are you getting for you money that went there?
Then there is the 800 billion Stimulus package that has saved millions of jobs. They took your money or your credit and literally handed it over to other people. The big brag is about the tax break those middle class folks got out of it. That was supposed to be about a third of the money. Have you heard even one person rejoicing about the money they saved on taxes from that program? Remember the big PR push about how it would be what was it 35 bucks a month for many. Even if they got and spent it do any of you believe that in fact sparked the economy or created any jobs. The jobs they directly claim from the stimulus if you put your pencil to it cost a few hundred thousand per job! Yeah, those folks however many there really were paid taxes but again or they paying back as much as we had to dole out to them? Dole is the perfect word because the Dole is what that became. What have YOU got for the 800 billion?
Of course there have been thousands of new government jobs created. Yeah, they claim they pay taxes too and I guess they do. But think about it. They are only giving back a portion of the taxes that were already extracted from you. The taxes they pay are not a net gain in our economy or the finances of the government.
Track the money on all these issues. Use your own analysis. Remember where the money originates–the taxpayers. Now they are talking about more of the same and much higher taxes. Frankly the higher taxes won’t affect an old fogey like me but I take no pleasure in seeing the bounty of my neighbors taken from them to transfer to the chosen few who vote the right way — for those in power who doled it out to them.
May your path be smooth and the waters cool. http://www.olcranky.wordpress.com