Archive for December 21st, 2011

December 21, 2011

Obama’s Economic 2009 Jobs Projection: A complete Failure – Smoking Gun – How to destroy a nation.

Another Example of a Failed Keynesian Economic Plan

The following is a excerpt from a NY Times article by Obama worshiper Paul Krugman touting the Administration’s fantasy economics and projecting a successful Keynesian Economic Plan of sucking capital out of the private sector and injecting it directly into the pockets of the “Frieds of Barack” coalition that got him elected. You know, the Communist led International Unions and the UPSD ‘Uninformed Poverty Stricken Dependents” and the media that also fantasize about meeting and sleeping with their dreamboat celebrity god.

—————————————-

Romer and Bernstein on stimulus

by Paul Krugman, January 10, 2009

OK, Christina Romer and Jared Bernstein have put out the official (?) Obama estimates of what the American Recovery and Reinvestment Plan would accomplish. The figure above summarizes the key result.

Kudos, by the way, to the administration-in-waiting for providing this — it will be a joy to argue policy with an administration that provides comprehensible, honest reports, not case studies in how to lie with statistics.

That said, the report is written in such a way as to make it hard to figure out exactly what’s in the plan. This also makes it hard to evaluate the reasonableness of the assumed multipliers. But here’s the thing: the estimates appear to be very close to what I’ve been getting.

The key thing if you want to do comparisons is to note that I made estimates of the average effect over 2009-2010, while they do estimates of effect in the fourth quarter of 2010, which is roughly when the plan is estimated to have its maximum effect. So they say the plan would lower unemployment by about 2 percentage points, I said 1.7, but their estimate may actually be a bit more pessimistic than mine. They have the plan raising GDP by 3.7 percent, but that’s at peak; I thought 2.5 percent or so average over 2 years, again not much difference.

So this looks like an estimate from the Obama team itself saying — as best as I can figure it out — that the plan would close only around a third of the output gap over the next two years.

One more point: the estimate of what would happen to the economy in the absence of a stimulus plan seems kind of optimistic. The chart above has unemployment ex-stimulus peaking at 9 percent in the first quarter of 2010 and coming down through the year; the CBO estimates an average unemployment rate of 9 percent for 2010, so the Obama people are more optimistic than the CBO, and a lot more optimistic than I am.

Bottom line: even if I use the Romer-Bernstein estimates instead of my own — there really isn’t much difference — this plan looks too weak.

via Romer and Bernstein on stimulus – NYTimes.com.

December 21, 2011

Missing Bush; Obama’s Procrastination Kills Syrian Freedom Fighters

5,000 Syrians have been massacred by Bashar Assad since March, including 300 children. How are those sanctions workin’ out, Mr. Obama?

via Bad Rachel: Thank You, O Masters of the Obamic Universe.

December 21, 2011

The Social Security Defunding Bill is a forced contribution by (rich) homeowners to Obama’s campaign.

The $150 billion dollar Social Security Defunding bill is a forced contribution by (rich) homeowners to Obama’s campaign efforts as a political tactic to smear the Republicans. A small price to pay to win an election. Jeffers M. Dodge editor AirModal

Two-month extension would be funded by tacking extra fees onto Fannie and Freddie mortgages
By Jonathan Sweet, December 19, 2011

The Toxic Twins

Potential homebuyers that use a mortgage backed by Fannie Mae or Freddie Mac would pay thousands more over the course of their loan in order to fund the payroll tax cut extension, under a bill passed by the Senate this weekend.

Democratic and Republican leaders in the Senate negotiated the deal, which passed by an 89-10 vote. It extends the 2 percentage point cut in Social Security taxes paid by employees for two months. The extension is paid for by charging an addition 0.1 percent in fees for banks that issue mortgages backed by Fannie or Freddie.

The issue may still be in doubt, though, as Republican House leaders said yesterday that they will not support the bill. Unfortunately, their opposition is with the length of the extension, not the way it is paid for. Last week, House leaders expressed support for the idea of paying for the tax cut with the Fannie and Freddie fees.

Those fees would almost certainly be passed on to borrowers, creating an additional cost for homeownership. On a $200,000 house, the new fees would cost the average homeowner $17 a month, or more than $6,000 over the course of a 30-year loan, according to Congressional estimates. The higher the mortgage value, the higher the fee will be. It will also apply to refinanced mortgages.

The tax cut will save a taxpayer making $50,000 a year $165, according to the Associated Press.

Here’s what NAHB Chairman Bob Nielsen had to say about the proposal:

“Congress is essentially proposing to raise taxes on millions of potential home buyers in order to pay for a payroll tax cut and other non-housing legislative initiatives. With the housing market struggling to regain its footing, such a short-sighted move would be extremely counterproductive and threaten the fragile economic recovery.

“The guarantee fees (g-fees) that Fannie Mae and Freddie Mac charge lenders to protect against credit-related losses should not be used for purposes unrelated to the safety and soundness of the housing finance system.

“Just as we are beginning to see modest signs of improvement in scattered housing markets across the nation where employment is gaining and consumer confidence is rising, Congress is tampering with g-fees and needlessly raising the cost of buying a home. This will jeopardize the tenuous rebound and is the last thing this economy needs.”

via Plan to have housing industry pay for payroll tax cut passes Senate | Housing Zone.

%d bloggers like this: