No Way Out

Obama’s Budget Proposes Up to $750 Billion More Bank-Rescue Aid (Bloomberg.com)

The (senior administration) official, speaking on condition of anonymity, said the White House hasn’t decided whether the $750 billion in additional aid to the financial industry will be needed. He said it will be put in the budget as (a) “placeholder.”

Placeholder? How is that ruse any better than pretending that Iraq and Afghanistan War appropriations were off-budget?

That sounds bad, but wait: budgetary hope is on the way- it's only going to cost $250B:

The official said the aid would appear in the budget as about $250 billion because the rules require policymakers to record the plan’s net cost to taxpayers. The government anticipates it would eventually recoup some, though not all, of the money expended to help financial companies.

As was the senior administration official, I would also want to be anonymous having to come clean about this turkey.

Mr. Obama continues Mr. Bush's policies of giving your money to large financial companies. The rationale makes no sense other than that he likes them better than he likes them better than he likes taxpayers. He wants them to be healthy so they can make a profit by charging you to borrow money from them- even though their money came from you (via your Federal Government), which you either borrowed from someone else or your central bank created out of thin air.

Fiscal rectitute is however demonstrated in the Obama Administration, by proposing to take money away from Americans of varying income levels:

1) The budget would eliminate the Advance Earned Income Tax Credit, a tax break for low-income earners that government officials have said is poorly administrated.

2-5) The administration proposes to finance the budget in part by limiting tax deductions for couples earning more than $250,000 a year, raising taxes on hedge-fund managers, cutting defense spending and paring subsidies to insurance companies participating in the government’s Medicare health-care system.

#1 speaks for itself. Just two night ago, the President promised that if you earn under $250,000, you will see no tax increase. Well, that promise didn't last long!

#2: "High earners": In what part of America is a couple earning $270,000 rich? Certainly not in metro New York, L.A., S.F., D.C., or Miami. These often-professional people are just the ones who present the best credit risks to lenders when they want to expand their professions or small local businesses. So under the Obama logic, they need to pay higher taxes so that "aid" can be given to the largest, worst-managed financial companies, so that these companies can charge them prime + 2 to expand their businesses. Looking-Glass logic, for sure.

#3: Hedge-fund managers: Not much money there these days!

#4: Cutting defense spending: How does that square with ramping up the war in Afghanistan and candidate Obama's plan to enlarge the size of the military? And when push comes to shove, what's more important: a robust Citigroup, or a robust national defense? At least the benefits (if any) of military spending are shared by all of us.

#5: Health insurance company (managed care) cuts: As a doctor, I say good for the Administration on this one given how detestable both the concept and the reality of Medicare HMOs are, but I suspect that 90% of the country would agree with me that between money going to health care insurers or some other part of health care and money going to Citigroup et al, it should go to the health care system one way or the other.

This blog has argued from inception last year that on the financial crisis, there was going to be no real difference between the Obama Administration and that of George Bush. Case proved. Guilty as charged.

And so the crisis continues, with our Government raising taxes on the successful and poor alike in order to feed the black holes caused by the greedy gamblers known as banksters.

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