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Voters who actually read party platforms and plans

Posted By: are not the least bit confused about....sm on 2008-11-02
In Reply to: whoops, he just said 250,000 again - TTMT

the distinctions between $250,000, $200,000 and $150,000. The figures apply to a variety of tax structures which have been clearly laid out for those interested in something other than basing their vote on dead-end issue-dodging, obsfucation, misinformation, character slurs and the like. You can read up or not. The information is there for the taking.


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I am an independent....neither party is "my" party.
THis election cycle I believe the best man is a Republican. Do your research. John McCain warned about this in 2005, named Fannie and freddie by name, co-sponsored legislation to control them. Blocked by Democrats, led by Chris Dodd..same guy now trying to fix what he and the Dems broke. Chris Dodd, #1 on contributions list from fannie/freddie, followed closely by #2, your shining knight Mr. Obama. The chickens have come home to roost all right...or should I say the donkeys. :)
Where were all the voters before?
Good point. I vote in every election, whether it be for president or town dog catcher. It is really pathetic to see the low turnout time after time unless it is the presidential election or a tax overide on the ballot. And I live in a town with a majority of senior citizens, can't imagine how low the turnout would be without them.

When my Dad was alive and we lived in the same town, he would check the list when you first signed in to make sure our names were crossed off indicating that we had voted. Look out if you had not. He was a big bad Boston police officer and you did not want to cross him!
It also comes down to those voters

who had no clue what they were voting for and did no research at all and just voted for the celeb candidate.  How many people did interviewers stop and question about Obama and McCain and they had no clue who was for what or who their VPs were, etc......but they were voting for Obama. 


I know that all people have a right to vote but I think sometimes we should really restrict that.  LOL!  Too may ignorant people not knowing who they are voting for but they are voting just to vote.


His plans are just that....plans.
Besides, I don't think he can actually even try to do any of his plans with the way things are now.  The economy just won't allow it.  We can't afford any government programs or universal health care.  The USA has no money.  Even if he just taxed the rich more, which I doubt it will just limited to the rich, that still wouldn't be enough money to pay for these government programs.  It won't happen....it can't and if it does, we will all pay for it because all taxes will go up.
All voters should consider this regardless of which side

It should be very troubling that the mainstream media has been in the tank for Obama since day one.  Ask Hillary Clinton or anyone else who ran (again, R, D, or I).


With that in mind, who gave them the right to choose our next President? 


Incidentally, the media (left-wing, of course) actually selected McCain, too.  They were absolutely certain that he would be the weakest candidate.  Mitt scared the holy hanna out of them.  I personally hoped for a Rudy-Fred ticket, in no particular order.


It should be interesting as to how many honest people there are reading this stuff to see how they'll react.  Based on what I've read since Palin's speech, she's certainly changed quite a few minds.


The thing that surprises me the most is that the bulk of people on this board is women, yet so many of them put party above the person.  I personally don't vote by genitalia.  I think it's foolish.


tell that to the voters who are only voting for O

There were thousands of voters........ sm
who voted in this election who were not informed or educated on the issues or the candidates.  I don't see much of a difference, do you? 
Cheaper plans -- $107 to $220
There are cheaper plans for the child, just checked and they range from 107 with 1000 deductible up to 220 for HMO.  I had to go without health insurance for a long while after getting divorced and getting my life back together, did not ask the government to come in and save me and at an older age, have a lot more chance of medical problems than young kids.  When I was a kid there was no health insurance, hardly went to the doctor.  I just feel that middle income people (over 80,000) can afford to support their kids with insurance.  Do not carry it on yourself and cover your kids if you feel so adamant about it.  And as for the cigarette tax covering it, once they find out the administation cost of it, then they will have to tax the rest of us to fund it.  Also every government plan starts out great and then they cut the benefits to the doctors as they don't have the money and pretty soon there are no doctors that will accept those patients.  Seen it time and time again.   But like someone else said, give a credit to the family once they pay the premiums for their kids.   Government taking care of us is not the answer, at least to me it isn't.
Plans for CHANGE! LOL
x
What are Obama's plans now?

I never believed that BO's plans would work to benefit our country, but now he can't even start his plans if he is elected.  This economy is too out of wack and the government has NO money.  So how does Barry expect to keep his promises he has made during his campaign?  We can't afford more government programs.  It just is not possible.  So much for that hope he keeps talking about.


I admit that the promise of change is an attractive idea, but I have yet to hear any "plan" of Barry's that will actually bring change worth voting for.  Voting for him initially would have raised government spending and taxes.  Now that the country is in deep financial crisis....what does he propose now?  I haven't heard much of significance out of him to suggest he really will bring about change....or I should say change for the better.


CHANGE WE CAN FEAR.....Barrack Hussein Obama


help with 2 Obama plans
I have found 2 things I need help understanding that were proposed by Senator Obama and am wondering if someone can shed light on what these proposals are. One is "universal national public service" (also spoken about by Michelle Obama in a recent speech) and the other is "civilian national security force." From what I have read, they sound scary, but I am not sure I understand either. Anybody know anything about these?
me too - who else plans to quit
Why work. There are no incentives. Why should I work when my money will be taken and given to people like Peggy Joseph who stated she won't have to work to buy gas and she won't have to work to pay her mortgage.


I did not say I did not agree with his plans -
I said we are not all looking for handouts... Of course, some people believe that is what he is going to do - I for one do not believe he is going to give "handouts".

I also don't consider tax cuts handouts, I don't consider helping people go to school handouts.

And, I very much LOVE the idea of not rewarding companies for sending our jobs overseas and for giving tax incentives to the companies who keep our jobs in the states.

I love the fact that I will not have to itemize my taxes to get to count my mortgage interest off on my taxes - why should some people be able to claim that credit and others not be able to?

I love the fact that he stands for a woman's right to choose what to do with her own body...

I love the fact that he is going to work toward getting affordable insurance for all people and not have to depend on an employer to provide you some type of coverage...

I never said I did not agree with his plan - just that I interpret his plans different than you.


Congress looks at Big 3 plans...... sm

Congress has looked at the Big 3's plans to cut costs in order to "qualify" for a bailout, the amount of which has now grown to $34B.  Nancy Pelosi seems to be in favor, so my bet is they will get it. 

Some of the concessions the auto makers are ready to make is slashing the executive pay, getting rid of executive bonuses, postponing employee merit raises for next year, suspending health care payments into a union health care plan, and possibly getting rid of the controversial job banks. 

Ford said they only wanted a standby line of credit with the government in case the other two go belly up.  GM seems to be the one hurting the most. 

I really have to wonder, will a bailout REALLY help or will it just postpone the inevitable with the rest of the economy dying the way it is???? 

http://www.npr.org/templates/story/story.php?storyId=97737508&ft=1&f=1001


Went on with thier plans...
with the blessing of folks like Nancy Pelosi. This is hardly a Pres. Bush problem or a republican problem. Obama digs much further and I think we'll find there are more people in Congress that knew about it and either agreed with it or did nothing about it, on both sides of the isle. Is he going to prosecute everyone?

That would be a sight!
American voters do not trust

the fact that this is a real "crisis".  Don't want to allow Bush to force congress into another debacle like the funding for the war before he is dragged from the WH kicking and screaming.  McCain is asking for time out so he can rest and catch his breath.


 


the voters don't decide the election- sm
Perhaps you forgot, or don't even know, that it isn't the voters who actually decide the election anyway. It is the electoral college. We could all boycott (although that would be stupid beyond belief as our voices would not be heard at all) and it would not affect the election results anyway. Get it??
If it weren't for uninformed voters

NEITHER candidate would have a chance. 


VOTING BY WRITE-IN VOTE FOR LOU DOBBS!!!!!!!!!


Too bad that over half the voters disagree with you.

.


 


There are a lot of voters across America who make

$250,000 or more who are voting for Obama.  These are the same folks who will pay more taxes under Obama's tax plan.  It goes to show even the wealthy who will be taxed more by Obama's tax plan, still want him to be President.  I hear JTP complain but he is not making much money and he owes back taxes.  There must be something right about Obama if the wealthy who are going to get a tax increase, are voting for him.


Of course they did. But at issue here is showing voters
I did not call you an imbecile. I said your posts are imbecilic. Being a hot-headed Obama supporter, according to the red camp, I have no character to degrade, so evidently I have nothing to lose by calling it like I see it. BTW, I've probably done all the growing I'm gonna do by age 64.
Belittling intelligent voters
just end up making you and yours look very, very small. It is sad to see the other party's apparent complusion to tear down something they cannot quite understand. Better luck next time with your candidate, your campaign strategy and your capacity to muster up the hope and inspiration so many Americans are feeling today. Maybe you too can find a way to feel a bit more proud of who you are and who seeks to represent you.
Speaking of stupid voters....(sm)
http://www.break.com/index/redneck-woman-rails-on-obama.html
stupid voters are an embarrassment to all of us huh!!!
http://www.youtube.com/watch?v=bUC3ORbhjTg
Other plans out there make more sense

I've been researching other candidates and their plans.


On the Dem side - Kucinich has a plan for only one insurance provider to everyone.  Sends all the bloodsucking insurance companies and their "preexisting conditions" and "not medically necessary" straight out of business.  I kinda like that plan, as I used to do billing and it would sure cut through a ton of red tape for doctors, hospitals, their staff and the patients.


On the Rep side - Huckabee has a plan that does away with employers providing insurance.  That's kind of scary, as "pooling" to get better insurance rates has always been the cheaper way to go.


But any plan I've seen doesn't worry me as much as Hillary's!


Anybody else who has heard of a candidate with a good plan, please chime in!


i'm curious about both sides as far as plans
x
I disagree. I think Obama's plans

will be the one to further hurt our country.  However, if I am wrong (and if O wins I hope I am wrong), I will give Obama credit if and when it is due.  Until then, I stand by what I believe.  Raising taxes during a financial crisis like this will ruin us.  Taxing businesses more will only make our products and services cost more which WE will pay for.  And as much money as Obama is wanting the government to spend on his programs, he will have to tax more than the rich to cover his expenses.


Cut taxes and cut government spending!!!!  Not the other way around.


I understood Obama's plans
thus my message below. I was simply responding the the wish for socialized medicine that equals that of the wonderful place we call Iraq!
Yeah, plans are already underway to...
"let his followers down easy" so they don't go from "euphoria to despair." Read the article in the lowering expectations post below. The Obama camp knows full well that when the faithful find out the sugar train is not coming into the station like promised....NO ice cream for YOU...they don't want them all "in despair" because the great and powerful "O" can't deliver (Uh oh Toto!!).

Good grief...it is AMAZING. lol.
No. Because Obama's disastrous plans have not
nm
Voters Send a Pro-Choice message
I read this in my local paper this evening. The entire column is a bit too long to post, but I personally found it interesting. Some highlights:

In three states, abortion was literally on the ballot. In South Dakota, a ban amounting to outright criminalization of the procedure was defeated soundly, going down by a yawning margin in a deeply red state. In California and Oregon, voters turned back efforts to mandate parental involvement in abortions for teenagers -- it's the second time California has rejected the proposal.

---

As Democrats seized control of the Senate, abortion-rights supporters gained ground. Incoming Sens. Sherrod Brown of Ohio, Jon Tester of Montana, Claire McCaskill of Missouri and Jim Webb of Virginia all support abortion rights. They all are set to replace anti-abortion Republicans -- and will vote in the chamber that decides on the fate of nominees to the Supreme Court.

In the House, at least 22 new pro-choice members are to replace lawmakers whose records were either anti-abortion or mixed on the issue, according to a count by NARAL Pro-Choice America. Final results in a few races still are unknown.

---

In Arizona's 5th Congressional District, where anti-abortion Republican incumbent J.D. Hayworth was defeated by Democrat Harry Mitchell, residents received fliers mocking Hayworth's support for letting pharmacists who say they personally oppose contraception to refuse to fill birth-control prescriptions. ``Sleeping pills? I don't believe in sleeping pills,'' a genial-looking middle-aged man in a white coat says in the flier. ``Try counting sheep.'' Tying incumbents to the pharmacist-refusal issue, as well as to their widespread opposition to emergency contraception, showed these lawmakers to be precisely where they are: Outside the mainstream.

Any comments?




Voters do this when candidates spout fvalues.
nm
I do not think there will be anything negative from family values voters...
I do not believe they will react negatively to this. What kind of man would McCain have been to decide not to choose her just because her daughter was pregnant and not married. What if she was pregnant and married? This whole thing just reeks. Like Obama said...children should not be involved in politics and this will not affect her ability to function as governor or as vice president. At least one on the left is being decent about this.
Yeah, and a large number of those new voters are
coming out saying they will vote for McCain now.
to foster relations with the Muslim voters...
both campaigns are needing those votes - not just Obama. There are Muslims in this country that are American citizens and they do get a vote too.
Probably because after 35 years, voters probably feel confident
Guess Biden's appearance in front of 3875 University of Northern Colorado students earlier today was just our/their collective imaginations. Tune in tomorrow for his 8:30 am stop in Colorado Springs, his afternoon stump in Pueblo or perhaps Thursday's in Raleigh NC rally. There is no reason whatsoever for Biden or the campaign to blink an eye over Biden stating the obvious about a new president being tested. He can also comfortably shine light on the experience issue (double-digit lead an all) since McCain gave up any credibility on that subject the minute he picked SP. Did you see the new polls top pick regarding what McCain's greatest liability is? But there should be no suprise there. Voters would have to be crazy to think she is ready to lead when she does not even understand her own job description and didn't have the sense to read the Constitution after the last 2 times she botched that question.
Typical pub. Underestimates the intelligence of US voters.
x
Obama has played the voters for fools...

http://exposingliberallies.blogspot.com/2008/10/obama-has-played-voters-for-fools.html 


To think that conservatives have viewed Bill and Hillary Clinton as unethical politicians who would do anything to get elected. When we are as disgusted as we think we possibly can be, on to the political stage steps Barack Obama. The senator from Illinois makes Bill and Hillary look “not quite so bad”.
     Though they enjoyed paling around with Yasser Arafat, we didn’t have the all-consuming fear that they would completely sell-out Israel, nor did we have to worry about them supporting infanticide, though they saw nothing wrong with partial-birth abortion
.
     Yes, Obama keeps his pants on when away from his “bitter-half,“ Michelle, but that’s not much comfort when he has campaigned for Kenyan Prime Minister Raila Odinga who made a pact with Kenyan Muslims to institute Sharia law.
http://exposingliberallies.blogspot.com/2008/10/obama-funds-odinga-who-promises-sharia.html
     Thomas Sowell has written an article in National Review describing how Obama has played the American people for fools.
http://article.nationalreview.com/?q=ZTQ5YTM3M2UzMjY3N2M3YWRiMDI0NzNmMTNhNjJlNTc=

     “Although Senator Barack Obama has been allied with a succession of far-Left individuals over the years, that is only half the story. There are, after all, some honest and decent people on the Left. But these have not been the ones that Obama has been allied with — allied, not merely ‘associated’ with.
     ACORN is not just an organization on the left. In addition to the voter frauds that ACORN has been involved in over the years, it is an organization with a history of thuggery, including going to bankers’ homes to harass them and their families, in order to force banks to lend to people with low credit ratings.
     Nor was Barack Obama’s relationship with ACORN just a matter of once being their attorney long ago. More recently, he has directed hundreds of thousands of dollars their way. Money talks — and what it says is more important than a politician’s rhetoric in an election year.
     Jeremiah Wright and Michael Pfleger are not just people with left-wing opinions. They are reckless demagogues preaching hatred of the lowest sort — and both are recipients of money from Obama.
     Bill Ayers is not just ‘an education professor’ who has some left-wing views. He is a confessed and unrepentant terrorist, who more recently has put his message of resentment into the schools — an effort using money from a foundation that Obama headed.
     Nor has the help all been one way. During the last debate between John McCain and Barack Obama, Senator McCain mentioned that Sen. Obama’s political campaign began in Bill Ayers’s home. Obama immediately denied it and McCain had no real follow-up.
     It was not this year’s political campaign that Obama began in Bill Ayers’s home but an earlier campaign for the Illinois state legislature. Barack Obama can match Bill Clinton in slickness at parsing words to evade accusations.
     That is one way to get to the White House. But slickness with words is not going to help a president deal with either domestic economic crises or the looming dangers of a nuclear Iran.
     People who think that talking points on this or that problem constitute ‘the real issues’ that we should be talking about, instead of Obama’s track record, ignore a very fundamental fact about representative government.
     Representative government exists, in the first place, because we the voters cannot possibly have all the information necessary to make rational decisions on all the things that the government does. We cannot rule through polls or referendums. We must trust someone to represent us, especially as President of the United States.
     Once we recognize this basic fact of representative government, then the question of how trustworthy a candidate is becomes a more urgent question than any of the so-called ‘real issues.’
     A candidate who spends two decades promoting polarization and then runs as a healer and uniter, rather than a divider, forfeits all trust by that fact alone.
     If Ronald Reagan had attempted to run for president of the United States as a liberal, the media would have been all over him. His support for Barry Goldwater would have been in the headlines and in editorial denunciations across the country.
     No way would he have been able to get away with using soothing words to suggest that he and Barry Goldwater were like ships that passed in the night.
     If Barack Obama had run as what he has always been, rather than as what he has never been, then we could simply cast our votes based on whether or not we agree with what he has always stood for.
     Some people take solace from the fact that Senator Obama has verbally shifted position on some issues, like drilling for oil or gun control, since this is supposed to show that he is ‘pragmatic’ rather than ideological.
     But political zigzags show no such moderation as some seem to assume. Lenin zigzagged and so did Hitler. Zigzags may show no more than that someone is playing the public for fools.
     Some people who see the fraud in what Obama is saying are amazed that others do not. But Obama knows what con men have long known, that their job is not to convince skeptics but to enable the gullible to continue to believe what they want to believe. He does that very well.”

     Right on, brother! Right on! It’s refreshing to see a black conservative who stands on principle and doesn’t support Obama just because of his dark pigment. I’m speaking of you, General Powell.





0 comments:





To all well-educated voters and free thinkers...

On Tuesday night, If and when Barack Hussein Obama wins the 2008 United States Presidential Election, please join me in announcing that "The tribe has spoken, and that  John McCain, Sarah Palin, and the ubiquitous Sam have officially been voted off the island!"



No, Obama voters will be stomping and kicking
nm
I think Obama will ask his voters to vote for who he wants in; I hope not though! nm

So sam, what are the sleeping lion's plans for change?

Address poverty?  Restore the every diminishing quality of life for the middle class?  Mortgage industry?  Predatory lending/credit card practices?  Balanced budget?  Reduced debt?  Tax reform?  Create jobs?  Outsourcing?  Minimum wage?  Protect Social Security?  Workers' unions?  Small busineses?  Corporate corruption?  Free trade?  Clean up the environment?  Alternative energies?  Fuel efficiency?  Clean elections?  Special interests?  Federal contract earmarks?  Patriot Act?  Ending the War?  Restoring alliances?  Global diplomacy?  Separation of church and state?  Just curious. 


And so are is researching the candidate's plans for the country

how can you ever vote for the RIGHT candidate?


He plans to give the middle class (that would be US)
Don't know about you, but I just can't pay any more taxes without going under financially. (Unless someone invents a vaccine that makes it possible to survive without having to EAT.)
Big corporations (I'm not talking about SMALL businesses, here... I said 'BIG'), aren't paying their fair share & pulling their weight tax-wise. Compounding that is the fact that they currently are actually getting incentives for sending work offshore. Why else do you think the LARGEST MT companies are the ones that offshore? In addition to paying p1ss-ant wages to us peons, they're getting financial incentives to do so.
There are also too many loopholes in labor laws that the big co's have going for them. How else would it be possible to tell a U.S. MT that they cannot work overtime, yet that MT has to work 2-6 hrs. over OT per DAY, just to make the 'minimum' line count and keep her health insurance. All withOUT getting paid for said overtime.
With McCain in office, there is little hope that any of that will improve. The fact that Obama is from a younger generation, with newer ideas, at least gives me a glimmer of HOPE, and right now hope means a lot to me, and alot of other people in the US. Will he get some things wrong? Undoubtedly. No one has ever had a 'perfect Presidency'. But will he get some things RIGHT? Absolutely. He will base a lot of his military decisions on TODAY's world situation, not the one that existed in 1942, or 1969.
I don't agree with EVERYthing Obama says (but then again, I never agree with everything ANYone says.) But I think that for this particular time in our country's and the world's history, we stand a better chance of improving the way things are with some new blood in the White House, NOT the same-ol', same-ol'.


The Candidate's Health Insurance Plans
MCCAIN:

• McCain's health care plan will increase taxes on employer-based insurance, and kick 20 million people off the rolls.

• McCain's plan will throw you into the individual market, where the same plan your employer offered will cost $2,000 more, and you can be refused care because you were sick 10 years ago.

• McCain's plan will shift costs onto the sick.

OBAMA:

• Obama's plan will cover tens of millions of Americans and reform the insurance industry such that everyone gets a fair deal and no one can be discriminated against because they were once sick or unlucky.

• It will create a group market that businesses can buy their employees into so that a small business that paints homes doesn't have to run a tiny insurance company on the side and an entrepreneur can pursue his idea without having to learn about health coverage regulations.

• It will cover all children. And Christ almighty, isn't it time we did at least that?
Compare your taxes under McC and Obama plans
I just did mine and I pay less taxes under Obama.

http://www.electiontaxes.com/
His plans are anti-American -socialism.
nm
webmd.com has healthcare plans of both candidates
in a very informative fashion, front and center.  take a look. i am also very concerned about o's idea for changing medical records technology....
His plans are to create bigger government, which
nm
Yep, and Obama's plans constitute socialism
nm
Seems like everybody is blowing the whistle on the govt. plans
January 16, 2008






Live Free Or Die: Capitalism At Risk
By Axel Merk

The Federal Reserve (Fed) has gone beyond playing with fire, and may have indeed set the house on fire. It’s one thing to push interest rates to near zero to stimulate the economy; it’s another to “monetize the debt” by printing money to buy government debt. In recent weeks, the Fed has broken outside even those boundaries and become actively engaged in managing the private sector beyond the core banking system. Worse still, the steps taken may be difficult to reverse and as such may shape the U.S. economy for a long time. These steps are taken with the best of intentions, to “save” the economy. The only trouble is that we may be on a slippery slope to destroying capitalism on the way. In “doing whatever it takes” to get the economy back on its feet, the Fed risks destroying the foundation of why the U.S. has been able to establish itself as the world’s leading economic force. Actively participating in credit allocation within the private sector, the Federal Reserve (Fed) jeopardizes the capitalist foundation the U.S. economy is built on. As a result of these actions, the U.S. may be on its way to becoming a modern incarnation of a planned economy.


Why these harsh words? To understand what is so frightening with recent Fed activity, consider that most central banks focus on interest rates, inflation and money supply to promote price stability (and maximum employment in the Fed’s case). Generally, they all influence credit creation by managing the cost of borrowing. Central banks may employ slightly different levers and targets; and while some central banks are better than others at achieving their goals, what they have in common is that they traditionally focus on government debt, mostly short-term Treasuries, to achieve their goals. This is very much by design as good central bank policy leads to an environment of price stability fostering long-term economic prosperity. On the other hand, bad central bank policy may lead to inflation, wide swings in economic activity or unnecessarily high unemployment. However, free market forces will push the private sector to make the best of it. It’s when policy makers start subsidizing ailing sectors of the economy that distortions are created that will come back to haunt us. Traditionally, for better or worse, elected officials decide on the socio-economic fabric of society. Now, the Fed decides which areas of the economy need to be propped up.


Creating Hysteria To Pursue Policies


The hysteria that has been created by policy makers and the media has allowed the Fed to pursue its recent unorthodox policies. In late September, the world financial system looked rather dire; the government was able to play a role to avoid a disorderly collapse; but the government’s role should have been limited to allowing an orderly adjustment of the excesses of the credit bubble. Instead, the latest salvo to promote the bailouts is that payrolls have dropped by the largest amount since World War II. This may be the case in absolute numbers as the population has grown, but more jobs were lost as a percentage of the workforce in a twelve month period in each of 1982, 1961, 1958, 1954, 1948/49; in many of the cases more than twice as many. Recessions are no fun, neither are personal or corporate bankruptcies; but they may be the cure needed to weed out the excesses of the boom. In contrast, today, hedge fund managers that ran their funds into the ground are raising hundreds of millions of dollars to start anew. Some of the folks that ran Long Term Capital Management into the ground in 1998 started fresh only to have another massive failure in the current credit crisis. We don’t expect the new breed of second chances to be any better. And while the blame lies with the managers, excessively low interest rates contribute to irrational risk taking: all of the bailouts focus on those who have been over-leveraged. What about the group of responsible savers that rely on income? With interest rates near zero, many are tempted to engage in highly leveraged strategies to meet their required income objectives. Pension funds “must” return 6% per year, leaving them little leeway but to give money to hedge fund managers to magically turn 1% yields into 20% returns; the way to achieve this is with leverage. Actually, there is another way: the Swiss public pension fund system just announced that it will scale down its long-term return objective to 4% from its current 6% per annum.


Giving Credit Where No Credit is Due


In late December, the Fed Board of Governors approved GMAC’s application to become a bank. The vote was 4-1, and the one board member with experience as a bank regulator, Elizabeth Duke, dissented. There was another hurdle: GMAC, General Motors’ finance arm, did not have sufficient capital to be a bank. That problem was solved, too, in early January, as the Treasury injected $5 billion into GMAC; the Treasury also GM $1 billion, so that GM could inject that money into GMAC. Equipped now with a minimum capital base, GMAC is able to operate as a bank, go to the Fed to access the TARP program, as well as other regular and emergency Fed windows.


In December, car sales fell off the cliff. But it wasn’t only GM that had problems; even Toyota that had access to credit and introduced zero percent financing, recorded a 37% plunge in sales (unlike other car makers, Toyota has traditionally not offered zero percent financing). Shell-shocked consumers are worried about their jobs and have lost a substantial amount of their net worth in 2008; further, incentive programs prior to the bursting of the credit bubble lured consumers into 6-year loans with zero percent financing. Consumers simply don’t want or need a car right now. Policy makers take this as a reason to provide money to GMAC that pursues a business model proven to be ruinous: it simply doesn’t make sense to offer cars at 0% if interest rates are above that, even if they are “close to zero” as they are now. GMAC takes money from the Treasury to be able to request more from the Fed. And the first course of business for GMAC is to extend zero percent financing to consumers with lower credit ratings than had traditionally qualified.


Difficult to Unwind: Long Term Inflation Likely


The Fed is only ramping up its mission to allocate credit where the Fed – rather than the free market - deems it appropriate. A major program announced in the fourth quarter, but rolled out in early January consists of a $500 billion program to buy mortgage-backed securities (MBS). The perceived positive is the plummeting of mortgage rates. Consumers with superb credit now qualify for 30-year mortgages at less than 5%. One problem with such programs is that the Fed intentionally inflates prices (lowers the yields) on these securities; in turn, rational market participants may abstain from buying them. As a result the Fed risks replacing private sector activity, rather than encouraging it. Furthermore, the Fed jeopardizes the dollar as foreigners may be discouraged from buying U.S. government and agency security debt; given that the U.S. has become dependent on foreigners to finance its spending needs as well as the unprecedented debt that will be financed in 2009. This is a very dangerous road to be on.


The Fed may be able to phase out its commercial paper subsidy program or drain liquidity from the TARP program over time; however, the $500 billion MBS program may be difficult, if not impossible to unwind. Indeed, the design of the MBS program calls for holding of the securities until maturity. For practical purposes, this means that the Fed’s balance sheet is not just “temporarily” inflated, but that the Fed will permanently keep more money in the economy. Traditionally, the Fed’s balance sheet is $900 billion. Therefore, even if one gives the Fed the benefit of the doubt that the current escalation to over $2 trillion is temporary, there will be a significant hangover as not all additions can easily be removed. This doesn’t even consider that, quite likely, the MBS purchase program may need to be extended beyond the 6-month period it was put in place for. Watch for bond manager Bill Gross this June, calling for the Fed to continue buying MBS, preferably the ones he has on the books, to save the economy from collapse. Incidentally, his firm, PIMCO, is one of the firms managing the Fed program.


To counter the effects of this added money in the economy, the Fed would need to keep interest rates permanently higher. One realistic alternative, however, is that the additional money will stay in the economy as draining it would cause too much economic hardship. This may well embed inflation into the U.S. economy for years to come. Importantly, note that there is little, if any, accountability at the Fed monitoring its actions; no one is there to ensure that the Fed will, at some point, phase out its programs or added powers.


Live Free Or Die


By engaging in credit allocation to specific sectors of the economy, the U.S. is stepping into a territory traditionally left to governments with a socialist or communist brand. Communism has shown us that planned economies don’t work. New Hampshire in 1945 added the slogan “Live Free or Die” to its state emblem, a quote stemming from a general in the Revolutionary war. Translated to the economic crisis, this should mean that a severe recession ought to be the lesser evil than a planned economy. And to continue the parallel, when communism swept Eastern Europe, the standard of living for everyone dropped. In today’s world, we already see that the “re-failure” rate of those who defaulted, then renegotiated their teaser rate loans, is above 50%. Yet all taxpayers have to pay the price for the bailouts.


To be sure, we are a far cry from communism. But we must keep our eyes open and not be blinded by the perceived “help” of money printed by the Fed. Debt is the origin, not the solution to the problems we face. The Declaration of Independence’s “life, liberty and the pursuit of happiness” may be difficult to achieve when drowned in debt; building sustainable wealth without the shackles of debt may be the more appropriate path. It’s not by mistake that the Founding Fathers be backed by a precious metal that cannot be inflated to give in to the temptation of the day.