Dolan's view of the stimulus plan:

Although many are BLINDLY hanging their hopes on Obama's and the Democrats' bloated stimulus plan, this is Dolan's perspective - not very optimistic. Being a REALIST, I'm afraid I agree with him.

Dolan's view of the stimulus plan:

Over the last few weeks, you've probably heard dozens of comparisons between this "new" New Deal and our current economic crisis to the "old" New Deal from Franklin Roosevelt and the Great Depression of the 1930s.

In the 1930s, we were the largest creditor nation in the world. So, even though all that spending did nothing to end the Depression, we had a lot of bucks sitting around to play with before creating a deficit and the federal budget.

This time around, we are the largest debtor nation in the world. So, continuing to spend money that we don't have, will only make the hole in which we currently find ourselves deeper and deeper.

This bill violates Rule #1 of intelligent planning: When you're in a hole, stop digging!
Congress and the President have not only not stopped digging, they're about to hand out shovels to more Americans to help with the excavation.

Let's take a look at the big areas the stimulus package will address and give you our take on what to expect.

HOUSING

It is almost universally agreed that without establishing a bottom in the decline of home prices, we will not be able to stabilize the economy. I agree.

But, the focus of buying up bad mortgages and/or changing bankruptcy laws to allow judges to rewrite mortgage contracts to shove down lenders' throats, isn't the answer.

Precedent shows that the idea of allowing judges to reset mortgage rates will also fail.

Bankers who already worked with homeowners in default of their loans by lowering interest rates on mortgages, and therefore their monthly payments, are finding that within six months, more than 50% of those mortgages go back into default. That's not working.

So, how effective might a judge be?

The Effect on You:

Earlier this week, we saw Wall Street's answer to Treasury Secretary Timothy Geithner's plan for shoring up our financial system–the market sank 5% on the announcement. In the words of Barclay Bank's U.S. economist... it was a plan of "shock and ugh !"

Part of the Street's reaction came from the fact that there were NO SPECIFICS, just rhetoric.

The only thing this piece of the bill guarantees is that mortgage rates will rise and only the "cream of the crop" borrowers will be able to qualify... and they will do so only with very large down payments.

JOBS

The Congressional Budget Office says that only 25% of the stimulus money will be used in the first year…roughly 12 cents of every dollar. So how many jobs do you really think will be created?

More interestingly, a large part of this plan is earmarked for schools and healthcare sectors... the only two sectors that ADDED jobs in 2008!

The bill contains $400 million for the Social Security Administration's computer center. Congress estimates that 400 jobs might be created during the construction process. WHOOPEE! That would cost taxpayers $1 million per job!

Another job creator... $524 million allocated for the State Department's Capital Investment Fund that may open up 388 positions at a cost to you of $1.35 million per job!

As for all the infrastructure jobs we keep hearing about (repairing roads, levees, bridges, etc.), don't hold your breath. Infrastructure takes time to plan and many hearings before all the regulatory agencies can okay the project.

The Effect on You:

There will be few jobs created by those of you in need of employment over the next year because too little of the stimulus is really allocated to job creation.

In the words of economist Thomas Sowell, "Using drawn-out processes to put money into circulation to meet an emergency is like mailing a letter to the fire department to tell them that your house is on fire!"

My biggest fear is the thought of our drawbridge over the Inter-coastal here in Florida being worked on by an army of unemployed investment bankers wielding jackhammers and concrete.

TAXES

$280 billion in the plan is allocated for refundable tax credits and tax cuts. This will suddenly remove half of working Americans from the tax rolls. The rest of us will, then, be carrying on our backs not only the largest deficit in history, but also half of the rest of the country. I know that I'm my brother's keeper... but should I be his sole support?

By the way, the amount of the tax credits being touted in the joint bill to be voted on has been scaled back from $500 per worker to $400 and from $1,000 per working couple to $800.

If you boil that amount down to a weekly basis, every worker's "stimulus share" works out to be a whopping... drum roll, please... $7.69 a week. Holy Mackerel!

PUH-LEEZ!! How stupid does Congress think we are?

The Effect on You:

Beware of this administration's definition of "Middle Class."
Anyone still paying taxes will be excluded from the "tax relief for the Middle Class" category. This is the only way that stimulus plan can ever be paid for. Middle Class will morph into WORKING POOR before the next Inauguration Day. Bank on it (if we still have anything left to put in the bank!)

THE DEFICIT

Even before the passage of the stimulus package is accomplished, the 2009 budget deficit is at roughly $1.2 Trillion or $1,200,000,000,000 (much scarier when you see all those zeros isn't it?)

When this hog finally is passed ("pork" just isn't a sufficiently descriptive word for this one), it will add just shy of another $800 billion to the deficit before even calculating interest costs we'll have to pay ("we" is you and me, folks... our children... our grandchildren and our... you get the idea).

You see…we don't have that money at the ready, so, we'll have to borrow it. When you borrow from others, they expect a return ON their investment not just a return OF their investment!

The Effect on You:

I won't touch on all the gory details of a $2 billion plus interest drain on us. They're too depressing to deal with right now.

Suffice it to say that we will all be a little poorer due to this crushing debt.

STRENGTHENING THE SOCIAL SAFETY NET

This is where most of the money will be spent. Along with increased unemployment benefits, food stamps and health coverage... the bill will spend $87 billion in Medicaid payments to the states; $44 billion in state aid; $10 million to help low-income students, $50 million for the National Endowment for the Arts; $54 billion for states to build and repair schools; $10 billion for the National Institutes of Health, to name just a few.
I wasn't going to mention it – but I must - $30 million for marsh toads in San Francisco? You've got to be kidding, Mrs. Pelosi.

The Effect on You:

Now... don't get me wrong. Social safety nets are important and, to some degree, a humanitarian, moral thing to support.

But most of the $800 billion will be spent in this safety net arena... not in actual job creation. So, the mantra of the stimulus plan that it will create 4 million new jobs is a bunch of bureaucratic bull. No jobs are created by this spending. Yes, it may keep body and soul together, but it doesn't make work for people desperately in need of jobs.

The Bottom Line:

As a way to put this economic crisis behind all of us, this package will fail.

As a way to increase government's presence (some might term it intrusion in our lives), this bill is a winner.

We believe the government will be discouraging private investment in our long-term growth by pushing investors aside with a heavy-handed approach of "I'd rather do it myself!"

America became the greatest nation in the world because of her people: dreamers, doers, fighters... all with a strong belief in self-reliance and the ability to fail as well as sail.

No government, anywhere or at any time, has ever accomplished what one person with a dream has accomplished.

But, we will learn this lesson the hard way as President Obama and the Congress lead us down the pot-holed path to a new socialistic experiment.

It didn't work in the '30s; it hasn't worked in France and it will NOT work for us this time.

What ever happened to COMMON SENSE? THINK about it; how did the government stimulus of giving $4,000 for each new car sale (Dollars for Clunkers) stimulate the economy or create new jobs? Give $4,000 to make ONE sale!

Let's apply the government's "logic" to education. Every teacher should give each student an extra "A" in the grade book. I'm sure that will make all of the students smarter and encourage them to study harder.

INSANITY!
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