Obama’s Describes His “New Deal” Program

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Just what we need when the country is in debt to the tune of trillions of dollars for future entitlement liabilities, a new public works program:

President-elect Barack Obama added sweep and meat to his economic agenda on Saturday, pledging the largest new investment in roads and bridges since President Dwight D. Eisenhower built the Interstate system in the late 1950s, and tying his key initiatives – education, energy, health care –back to jobs in a package that has the makings of a smaller and modern version of FDR’s New Deal marriage of job creation with infrastructure upgrades.

The president-elect also said for the first time that he will “launch the most sweeping effort to modernize and upgrade school buildings that this country has ever seen.”

“We will repair broken schools, make them energy-efficient, and put new computers in our classrooms,” he said in the address.

The president-elect is bringing new elements of his domestic agenda into his economic recovery plan, committing to a path toward giving every American access to an electronic medical record as part of an “economic recovery plan … that won’t just save jobs, it will save lives.”

Lets not forget the billions the government is throwing at the private sector to bail them out. But hey, lets throw money into public works programs with the hopes of rekindling the New Deal of FDR that worked so swimmingly. Or did it?

You see, the New Deal did not save our country from the depression, World War II did.

These new jobs created by the New Deal are made with the money confiscated by government. Instead of letting the individual keep that money themselves and spending it at grocery stores and retail outfits, which would then in turn create jobs because more money would be coming in to the businesses he wants to force you to pay for government jobs that are so inefficient stand-up comedians make a living off of jokes about them. Hell, that money could of gone into the individuals bank which then would have been sent out in new loans to other individuals to open new businesses, which would then create jobs.

But Obama doesn’t think the private sector is capable. Instead, he wants to create those jobs from your money himself.

Burt Folsom, a professor of history at Hillsdale College in Michigan, describes a few of the programs FDR instituted in a speech:

The Works Projects Administration was set-up under Roosevelt with his good friend Harry Hopkins. They created, to use their rhetoric, over five million jobs. We had unemployment of eight or nine million people and this agency all by itself created five million jobs. People were building roads, putting gravel on roads, sometimes asphalt and cement, all over the country. They built courthouses in different counties. They built football stadiums for high schools around the country. Sometimes they built bridges, but mostly roads. The point is they did those kinds of projects. The people were given money. Taxpayer dollars paid for the projects. They were completed. Supposedly they created five to six million jobs. But where did the $10 billion come from that supported them? Did the government have an independent source of revenue? No, they had to get it from somewhere.

~~~

Another New Deal program was the AAA, our first serious government program in farming. Typical farms back in the thirties were about 160 acres. Sometimes they were larger. But let’s just say that we have a typical 160 acre farm. What the AAA did under the Agricultural Adjustment Act was to allow farmers to take one-quarter of their land out of circulation and pay them to do it. The idea here was we had overproduction of crops, so the prices were low. So you paid farmers not to produce. So a farmer takes his acreage out of production. He is often paid $10 an acre to do that. Then he grows food on the other three-quarters of his land. Did we get the ten dollars an acre from an independent source of revenue for the government to pay for this? The textbooks almost never tell you where it comes from but of course it comes from the taxpayers.

~~~

The WPA and the AAA are two of the best-known programs. It’s interesting that the word boondoggle was first applied to the WPA. I’m looking at this in the most charitable way. I’m assuming that a lot of what the WPA did was worthwhile. A lot of these roads were so poorly built and constructed, and were slowly built because the more slowly they were built the longer people could get paid to build them. Right? And the WPA had so many poorly built roads that other WPA workers had to come to redo those roads. It’s also very interesting that so many of these were created in Democratic congressional districts. And it is very interesting also that so many of the people who got the jobs were people who were appointed to their jobs by the Democratic precinct chairman in the area. And it’s also interesting how when all that money became available, many Congressmen decided to start voting more with Franklin Roosevelt so that they could get money coming in to their district. So you see the political motivation.

He also goes into the taxation of the depression era and the results of these high taxes. Something Obama has also wanted to copy from FDR:

In 1929, when the Great Depression hit, the top marginal tax rate was 24 percent. That was the rate on top incomes. The bottom rate was one-half of one percent. In other words, the taxation started at one-half of one percent. There was an exemption, too, and the exemption was high enough to keep 98 percent of all Americans off the income tax rolls. But we had a small federal government back then.

In 1932, the marginal tax rate went up to 63 percent on top incomes. In 1935 Roosevelt pushed it up to 79 percent, and we started at five percent, and the exemption was lowered, so more people were paying taxes. But it starts at five percent and it goes up to 79 percent. Now, you could see why, right? All these programs had to have a payment. But here’s something that is not explained. What about the work ethic of those people in those top brackets? In 1929, you were telling them, you get to keep three-fourths of whatever you make. Now you’re telling them you give more than three-fourths to the government. What’s your work ethic going to be with a 79 percent tax? Tax-exempt bonds, stamp collections-that was Roosevelt’s personal exemption, he had a good stamp collection-coin collections, foreign investments, Swiss banks, anything to shelter that money. But do you see why the depression is prolonged? Who’s going to invest to create the jobs to get us out when you’re being taxed 79 percent? Do you think the revenue then is going to go up when the tax rate is 79 percent? Very good thinking, we have some supply-side thinking in the crowd. We raised in 1929 over $1 billion. It was almost $1.1 billion in income tax revenues. In 1935 when the tax rate was 79 percent, our take for the government on income tax was $527 million-less than one-half of what it was in 1929. Did you catch that? Twenty-four percent of something is something, and seventy-nine percent of nothing is nothing-because the high tax rates chased capital into tax-exempt investments.

Therefore in order to get money, Roosevelt had to tax poor people, so he instituted excise taxes-especially on whiskey and tobacco. Prohibition ceased to be law. He explicitly said I want that whiskey in there so we can tax it. Disproportionately middle-class and lower-class people drink. Roosevelt wanted their money. We therefore had a high excise tax on whiskey and tobacco. We instituted for the first time in our history a federal gasoline tax. See, the income tax hits the rich back in the twenties, now we are putting in excise taxes because we have to fund the New Deal. The money has to come from somewhere, and the rich people just sheltered their investments. We had other excise taxes on cars, taxes on tires, on telephone calls, telegrams, movie tickets, and bank checks. And they wanted to do it on soft drinks, but Coca-Cola was too strong a lobby, so they settled for grape concentrates. The revenue from excise taxes in this country went from $500 million in 1929 to $1.36 billion in 1935.

What I want you to see is these programs-WPA, AAA, and Silver-are funded by excise taxes on middle-class, lower-class people drinking, smoking, driving cars, going to movies. That is where much of the funding for the New Deal came from.

Now, with Roosevelt you say, “My gosh! How could he win elections?” Roosevelt went on the campaign trail in 1936 and said, “You poor people are doing your share, but the rich are avoiding the taxes. We should make them pay.”(Curt-sound familiar?) And he recommended a tax to congress, on all income over one hundred thousand dollars. His recommendation in 1941 was for a 99.5 percent tax on all income over one hundred thousand dollars. And when the budget director said, “What!” Roosevelt’s comment was, “Why not?”

When congress refused to pass that bill, Roosevelt was furious. Therefore he instituted a 100 percent income tax, by executive order, on all income $25,000 or more. I repeat, Roosevelt instituted an executive order on April 27, 1942 for a 100 percent income tax on all income over $25,000. How many of you knew about that? Oh good, somebody did. Actually, the Republicans won the next election and voted it out, and Roosevelt had to settle for 90 percent. He had to settle for a 90 percent marginal tax. Here’s a quotation from Roosevelt, it was during World War II, “Discrepancies between low personal incomes and very high personal incomes should be lessened.” Oh, and he used the war as a crisis, you see. “And I therefore believe that in this time of grave national danger, when all excess income should go to win the war, no American citizen ought to have a net income after he’s paid his taxes of more than twenty-five thousand dollars.”

And this is the guy Obama wants to emulate. Someone who actually came up with the idea that a 100% tax on income is a good idea. Someone who couldn’t see the simple fact that the higher you tax, the less money comes in. No one creates new jobs when people’s income is taxed so high.

So Obama’s plan? Emulate FDR by raising taxes and creating inefficient jobs from your money instead of letting you keep that money to spend and create better and more efficient jobs.

Going to be a great four years eh?

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The economic experts at Flopping Aces have spoken! Actually, most economists say this is exactly what we need to keep our economy from collapsing and taking everyone down with it.

Fools.

Sorry, I am reduced to that. But, if a visual helps, I am shaking my head back and forth, back and forth, at the same time.

We’re going to spend money on All Great Things A-Z?

I have only one question:

WHAT MONEY?!

We’re broke (by any reasonable definition)!!

I repeat.

Fools.

Total, unutterable fools.

the liberal illuminati wants to spend like there is no end to the money that our country has. I don’t see how you can turn a blind eye to the fact that there isn’t any more and we’ve been in debt a long time.

Obammunism — Bridges to nowhere, everywhere. Gubbermint make work projects always have the same ending, the unemployment line. Ask FDR for details.

So this is the hope and change we were waiting for? A shovel and a hoe for everyone? Just like Kenya?

Looks like the last election proved one thing, the USA is full of idiots.

Where is he gonna get this money from, besides taxes????
Borrow somemore from us chinese???
Just print more of it???

The US$ is gonna weaken one more round down again later.

He’s doing exactly what the japanese did in the 90s. Except that he is going to do it without any money.

Obamatons really fell in the pitfall… lol. Good for them, they think they are so brillant and intelligent. Their blind love and obsession for THE ONE will lead your country to its greatest downfall of History. Obamatons are fools and they got fooled. Watch out… communism ahead! Welcome to the new USSA!

Every fool was so excited by his cabinet’s nominations, but like Melanie Phillips said:

“For sure, Obama has made some solid and reassuring appointments, such as his Treasury team. But did anyone really believe that a radical president would appoint obvious radicals to key roles in his administration? But if not, the one thing Obama is not going to do is torpedo his presidency at the very start by displaying a radical bent. The name of the game must be NOT TO FRIGHTEN THE HORSES. His centrist appointments are a smokescreen; they co-opt the moderate center, but he’s still the commander in chief. Obama plays basketball. I’m not much of an athlete, barely know the game, but one thing I do know is that you have to be able to look like you’re doing one thing but do another. That’s why all these conservative appointments are important: THE STRATEGY IS FEINT TO THE RIGHT, MOVE LEFT” (Melanie Phillips)

Didn’t I tell you that this guy is the greatest manipulator of all time and that he had a secret agenda? I guess I was right.

Craig, who are the moderates? Not being nasty or sarcastic, just asking.

Hey skylights, were you stoned or just stupid when they covered history? Trying to spend our way out of the Great Depression made it last longer. Experts? You mean the same ones claiming that we’ve been in a “recession” since 2007 by changing the definition of recession? Enjoy your brain destroying kool-aid.

Hey I got a great idea let’s solve our economic crisis by having a very long and very expensive war and borrow the money from the Chinese. Or….. well we can always blame Clinton and the Democrats

Not much on math, are you John Ryan? Tell you what. Figure out your zeros, and start multiplying $5 mil per month, and figure out when that gets into the trillions… like this bailout is doing.

When you get your basic high school math down, get back to us.

Well John jackass, the crisis was caused by dems. Enjoy living in denial.

But, but, but Saint BO is going to heal the planet and save the USA – He can do no wrong, ever. All bow down and worship Saint BO (as in body odor).

I wondered where Mata was hiding….

Glad to see you’re back on the job!

LOL! Spent one day crossing the country from SE back to the NW. Spent two days trying to catch up what’s been ignored while I was away almost three weeks.

Should be getting my act together, and maybe even posting (in addition to the sporatic comments). Ah…. vacation with friends and family. ’tis like a breath of fresh air.

sorry but this crises was caused by Mr. Average Person, he has a total credit card debt of $10,000 at 15% interest and spends more per year than he makes. He borrows against his homes equity to buy stuff he does not need or could wait until he can afford it ( considering that he pays about $1500 per year in credit card interest he could buy more stuff if he waited a few days). He has finally hit the wall where he cannot borrow any more so he cannot buy any more that causes the economy to go bust. He is like an obese person who is so fat that he cannot walk and the experts now tell him that the cure is for him to eat more, dont make much sense

Well I’m sure roads were on the top of the list for a reason. And that means gas taxes going through the roof to pay for road construction. If you thought state taxes to pay for D.O.T. improvements were bad, just wait until Federal bureaucracy has it’s hands back in there again like during the WPA days. The WPA road projects were often so poorly done, when they would reach the end of a highway, they had to keep going back to redo what they had already accomplished. That’s called Federal job security. Even today, I drive past road construction sites and for every person actively engaged in the construction, I typically see 3-10 just standing around.

Also remember, Obama is on the Carter conservation kick and thinks we should be paying up to $10 per gallon for gas in order to force America to conserve. Yet, that money will not only go to roads, it will go into the general fund and towards his other plans like his civilian police force. Biden is in on this too. He’s been complaining about our nation’s bridges for years trying to increase pork spending.

It’s like when our military was paying $500 for hammers & $1,000 for toilet seats on contracts negotiated via politicians on both sides of the aisle. That money had to be going somewhere and it was. Some went to pay for “Black Projects” that did not show up on accounting books. But, I’m sure most of it went to manufacturers & was kicked back via the lobby system or campaign donations. That’s much more difficult to do with military funding today due to reforms such as Fraud, Waste, and Abuse legislation and military outsourcing (which allows units to purchase or self-contract locally), yet we’ve seen the prices for weapons systems skyrocket over the last few decades (which anyone can verify by doing a little quick research on basic unit price comparisons).

Mata: It’s amazing how well the moonbats have behaved when you were away. I guess they know better than to mess with the Mike.

Actually the AAA serves a sensible agricultural purpose, (as does rotating crops,) and that is to allow a section of field to recover. Certain crops draw so much of the nutrients out, that after a few years of continual planting, the earth loses the ability to produce good crops. Unhealthy crops are prone to disease and will not yield high quality harvests. The next year, that empty field will be plowed and a different section of field will be allowed to lay fallow. This process also reduces the amount of fertilizer the farmer may have to use.

Somehow, I just don’t see a guy from Lehman Bros off paving roads. I can’t see an out of work union employee from Republic Steel welding Chinese steel to make a new Innerbelt bridge in Cleveland. I also have a tough time envisioning a Home Depot sales clerk building a dam someplace (as if the left would allow such an anti-green monstrosity). I can’t see Citibank employees leaving NYC by the thousands to build windmill farms off the coast of Martha’s Vineyard.

Good luck O. Reality sets in more and more each day.

@ditto:

Ditto, that’s the way it’s supposed to work. In the area where we farm, investors came in and bought up most of the CPR, didn’t maintain the fields and are now leasing it out to hunters while still getting the CPR money. That land is now overgrown with cedar, sumac, wild rose, etc. it would take a bulldozer and a lot of hard work to bring it back to where anything could be planted on it.

Scott #18… you forgot. Obama wants the taxpayer to pay for college education (as well as pre’school…). And, oh yes, his federally funded “retraining” education programs. That’s how he’ll propose getting the unqualified to build roads and infrastructure… newly qualified.

Like I said, the guy’s eyes are bigger than the nation’s wallet….

Curt, I agree with you. All the government bail out money was money poorly spent. It was all money that we borrowed from China and similar origins and it will all have to be paid back with the taxes of our children. The banks and other financial institutions should have been allowed to fail, and also the auto companies. I strenuously object to granting no strings bail outs to the financial institutions and at the same time denying loans to the auto industry, on a general fairness principle, but the best thing would have been to simply allow market forces to repair the damage, even were it to take 5 years, which it certainly wouldn’t have.

The best arguments against these bail outs were just presented by Arthur Laffer, with whom I strenuously disagree with respect to tax policy (the so-called “Laffer Curve”/Reaganomics being the very voodoo economics labeled by George H.W. Bush). But Laffer has this one nailed, dead on:

http://www.ocregister.com/articles/government-spending-billion-2248385-stimulus-increased

I agree that the infrastructure “investment” is a bad idea, but it’s not as bad an idea as were the trillion dollar bail outs to the financial sector. These bail outs were vastly more socialistic than are the proposed grants to the states for infrastructure projects.

– Larry Weisenthal/Huntington Beach, CA

Terrific article link, Larry.

Here here! Rather than taking any action, let’s continue doing exactly what got us into this mess in the first place in the belief that it will somehow magically fix itself. Now true, some might call that the definition of insanity, but we know it better as conservative economic ideology and, as I’m sure the owner of this blog can explain in detail, conservative economic voodoo can never, ever fail! The Great and Powerful Ace has spoken. Ignore those homeless families behind the curtain.

It won’t “magically” fix itself. But it will/would fix itself.

There should have been no bail out of the financial sector. All those weak institutions would have failed. The strong institutions, with good management, such as Bank of America, would have survived. New institutions would spring up. If the government really wanted to invest $trillion in the financial sector, they’d have been better investing it all in the sound institutions and the new institutions, so that all that money could have gone into making new loans, as opposed to buying up bad debt.

As it is, the government is adding $trillion in new public debt to buy up bad debt and prop up poorly managed financial institutions.

The most pernicious threat to our long term economic stability is the massive public debt. George W Bush gets blame for doubling this debt on his watch, courtesy of the unprecedented massive tax cuts in war time (Lyndon Johnson was at least responsible enough to raise taxes to pay for his war). Bush gets more blame for the $trillion bail out. But now Obama will deserve blame for borrowing yet more money and increasing the debt more, in a misguided attempt to inject capital into the economy, as opposed to allowing the economy to generate its own capital, through real economic growth, as opposed to false growth through the spending of borrowed money.

– Larry Weisenthal/Huntington Beach, CA

Not only is this New Deal plan unfeasible but it is going to come at the expense of some enormous issues that need to be dealt with sooner rather than later. The entitlement crisis is coming if we like it or not, it will only be magnifide with unrealistic “new deal” type policy. Let me remind you of Obama’s plan for social security.

Despite the future problems, in the short to medium term, this massive spending program will create a kind of “False Summer”.

The problem is that Obama is going to put the US even deeper into debt, and this will eventually result in the dollar losing more of its value next round(recently it strengthened when funds ran out of foreign high-yielding currencies back to the dollar when interest rates dropped worldwide). It might even get harder for the US to borrow money sometime down the road, we’ll have to see. I am not sure how that will translate to interest rates on treasuries.

If Obama makes sure that lousy businesses, industries and companies are allowed to go into structured bankruptcy or taken over and REAL CHANGE happens in the economy, with competent businesses taking over bad ones, then, it’s possible that this pickup in demand from the spending plan may sustain for the long run. He also needs to later bring down borrowings when he can, or at least show some sign that he is serious about this.

Unfortunately, he is a typical crook and big spender(of borrowed money), nothing will change, and he is not going bring borrowings down. He is the One Billion Dollar earmarkmark man, right???

I am not against the spending program, but it needs to be backed up by the measures above, or else after that false summer, the same basic problems will persist, and exacerbate the next decline.

Looking at Japan, they did the same massive spending thing and their stockmarket has been like one quarter of its former high for the last 15+ years. But they did save jobs and alleviate the recession in their economy. These are fondly called the “zombie years” of the japanese economy. However, they did it with mostly their own money, while the US is going to do it with borrowed or extra printed money.

With zombie banks and companies bailed out, toxic assets and balance sheets remaining and nothing changed , Japanese companies have been basically non-performers for 15 years. But jobs were saved.

This financial crisis was orchestrated purposely by the Democrat Party as far back as the Carter’s years. This is how you get to change a country to socialism, Marxism or communism. First you get the children to learn from leftist teachers for a decade or two, then you ruin the economy, then you bail out everyone on borrowed money and put the load on the tax payer’s shoulders and they get demoralize. After that, it is just a child game to destroy capitalism.

sigmundringeck,

I think you will enjoy this video that I have presented on this site a while ago. It explains what is happening in America and why Obamatons were so easily fooled. They are the utile idiots to establish communism. He explains the demoralization and destabilization process before it can be done.

Ex-KGB Uri Bezmenov On Ideological Indoctrination – Part 1
http://www.youtube.com/watch?v=vlkPkJInUmU&feature=related

Sigmundringeck, if you’ve enjoyed the video that I have posted with BEZMENOV in my previous post, it is only Part 1 of 9. You can listen to all of them. This is a fantastic serie.

Part 2
http://www.youtube.com/watch?v=DIFcnctnHsE&NR=1

What to do? It’s the time that americans want to experiment with Marxism and Socialism, brought to you all not by the Soviets/Russians or the Chinese but from within, by this marxist radical snake Obama.

Of all the US presidents, none makes me more wary than Obama. He is truly like the snake you invite into your home, then it bites your baby when you are sleeping. Then you scream at the snake, “Have you no gratitude??? Why did you do it???”
And the snake replies, “Sorry, but I am a snake, this is my nature.”

All great empires fall from the rot within, Obama is the rot.

Without the US as the leader in soft and hard power promoting democracy, freedom and human rights, any place else will more easily go under into the swamp of totalitarianism once the big boss starts to fall.

We need the US to be the beacon or light. Obama is slowly turning the light out, and will do even worse later, for sure. Very depressing.

“Very depressing” (Sigmundringeck)

Yeap! But leftist Americans and specially Obamatons does not realize that. It scares the shit out of me, since they are my neigbors. Bezmenov explains it so well specially in Part 2. Like he says: No matter what you tell them, facts, proofs, reality, the will not believe you, they are in complete denial and in adoration with THE ONE.

It doesn’t matter how much educated they are, the longer they stay in college, the more they become indoctrinated. It is useless to discuss with them. Between you and me Sigmund, I think America is toasted, done, finish. I hate to look like a pessimist but in fact I am realistic. If Obama is not stop before he reaches the White House… bye, bye America. It is sad but they won’t listen, what can we do? It is a lost case.

Obama is using the excuse of some massive economic catastrophe to push through his Socialist agenda ex-post-haste. The buffoonery begins on January 20th, but the damage will last for decades.

The left is shrieking that there is a huge economic fire gutting our economy, and their solution is the old tried-and-failed Keynsian Economic Firefighting Kit which contains gasoline, coal, firewood and kerosene and they are rushing into action to douse the flames of this little blaze. Their results will be to turn this into a 4-alarm conflagration – precisely the results achieved by FDR, which is how he managed to turn a stock market crash and small recession into a depression that lasted throughout his Presidency and right up until it was cured by Adolf Hitler.

Get ready for “The Great Depression II”. If the Obammunists are blindly mimicking the actions and disastrous programs of their clueless hero, FDR – the cheif architect of the last Great Depression; we can expect similar results this time around.

The sheeple were scared by the press, and they think someone needs to “do something”. According to the BLS, unemployment rates are on the order of 6% – the lowest they ever got under Roosevelt were still over 10%, and every time the began going down, FDR would do something to screw it all up again. Socialism and Neo-Keynsian ‘solutions’ have never worked before and will not work now. As long as the press beats the drum of King Tarzan and his Neo-Keynsian minions and continue fawning over the Obamanistas as if they are the saviours of the American Dream, we will not climb out of this little slump, and the actions of these empirics will be to plunge us into a very deep depression.

The dogs of war will probably end up leading us out of this one too, except it will be a lot messier this time around.

Seeing the mindless haste that this team of economic charlatans and amateurs is employing in their wasteful, uninformed, quixotic attempt to attack the recession – while surreptitiously erecting their economically illiterate Socialist agenda – one almost has the feeling that Obama’s attempt at being FDR II will instead mimic the trajectory and untergang of Salvador Allende.

Vegetarian,

Wow! I am impressed by your knowledge of economics. You are so right. Keynesian Economic does not work. This country would need Milton Friedman’s economic in this time of crisis. I am also disgusted by his “team of economic charlatans and amateurs”.

But Obama will use the Keynesian doctrine to destabilize this nation so he can turned it to a communist country after the whole economy will be ruined for decades. The “Big Brother” government will take America within. America will no longer be. Bingo! Obama will go thru History and be even more famous than Hitler. He will have accomplished his goal and his ego will be satisfied.

Looks like all he needs is another H****r to show up, and try to take over the world pinky!!! Hehe