President Obama and his team plan on going on national television Tuesday evening to tell American’s that things are not as bad as we thought and most likely, we’ll hear that “change” is just around the corner. The core of this optimism is a less than expected cost of TARP because the money is being paid back faster than they expected. Treasury Secretary Geithner wants to use some of those monies to pay a little on the national debt. Couple that with lower unemployment percentages and lower job loss last month and hey, the green shoots are back with a vengeance.
All the rhetoric and spin in the world is not changing the situation on the ground. Even though the job losses are coming down, they are still job LOSSES. Millions of Americans are on extended, extended, extended unemployment benefits, designed to do nothing more than get them through the holiday season and into the dead of winter. Hopefully by then they will find a job or taxpayers will be asked to fund another extension to the extensions. People don’t protest when it’s cold and maybe by spring the green grass shoots can be translated into those much talked about green shoots we hear about.
As far as taking some of that money and paying down the deficit, that would be a nice idea, considering it helped raise the deficit in the first place. Wouldn’t you think that having borrowed that money from the taxpayers that it should go back to the taxpayers? President Obama apparently wants to use it for the unemployment benefits. I guess if you’ve already borrowed it, why pay it back? But if you aren’t going to pay it back, then you are just REDIRECTING the BORROWED money and we still have the deficit problem.
Speaking of the deficit problem, most of which BTW ended up on the public debit side rather than the government debt side (by a margin of better than 95% to 5%). The Treasury Department apparently mislaid the memo about increased “openness” of government. The debt to the penny daily update has failed to update for days at a time, but did finally show the debt exceeding the government limit, but a few accounting tricks and it dropped below the limit once again. (as of Dec. 7th, the last notation was still from December 3rd) That BTW is the same limit that was supposed to be breached in October, November and now this month, but thanks to the Treasury Department, we’ve been able to stay below the limit even while paying all those extended benefits! Maybe Congress doesn’t need to act; the Treasury Department is doing fine on its own in this regard. But don’t hold your breath, Congress has no backbone (a few vertebra, just no backbone) and will give the government whatever it wants since as I mentioned before, it’s cold and people don’t protest when it’s cold.
Finally, that change that keeps being talked about seems to be those businesses that still have access to credit that are willing to take a loss (subsidized of course) to undercut existing businesses and increase market share in this time of turmoil. As they put existing companies out of work and more people out of a job, they assure that when the dust clears in six months or a year, that they will own a monopoly (or close enough) and can then raise prices at will (inflation, remember that?) because there is no choice. (Anyone remember the Reagan years?)
Yep, Change is great, of course for many people, change is the only thing left in their pockets and that may not cover the cost.