ECONOMY / TAXES
F: Things are looking bleak for the Obama adminsitration at this point.
- August 24, 2009 - Obama's administration released new figures from the White House budget office showing a cumulative $9 trillion deficit from 2010-2019......$2 trillion more than the administration estimated in May. Moreover, the figures show the public debt doubling by 2019 and reaching three quarters the size of the entire national economy. The revised estimates project that the economy will contract by 2.8 percent this year, more than twice what the White House predicted earlier this year
F: These new numbers are bad news for Obama for two reasons. First, it shows poor economic forecasting on behalf of the Obama administration. Many question how they could be so off with their initial May projection. Second, it shows that the economy is in worse shape than originally expected. So Obama's policies are simply not working. When will things start to turn around? If Obama is thinking ahead toward the 2012 Presidential election, there must be a dramatic and sharp improvement.
- July 16, 2009 - Nine months into the fiscal year, the federal deficit has topped $1 trillion for the first time in American history. The Treasury Department said that the deficit in June totaled $94.3 billion, pushing the total since the budget year started in October to nearly $1.1 trillion.
F: Since Obama took office, America has witnessed record breaking spending, followed by record breaking unemployment numbers and now a record breaking deficit. Just six months into his presidency, President Obama is facing a disastrous situation. And his excuse that he "inherited" these problems are getting tired. The Conservatives and Republicans are now playing the " I told you so" game while the Liberals and Democrats are finding it harder and harder to defend Obama's policies. There are still three and half years left to go for the Obama administration. If things do not dramatically improve, America will undoubtedly witness one of the worst one term, four year Presidential tenures in history.
- July 15, 2009 - The U.S. unemployment rate has climbed to a 26 year high at 9.5%. In addition, never before has the US unemployment rate risen so quickly over a 4 month period since they started tracking the statistic in 1948. The unemployment rate under Barack Obama has gone from 7.6% in January to 9.4% in May-- nearly two full points in 4 months.
F: Obama's road to a successful presidency took a major blow with these recently released job numbers. So far his policies has failed in attempts to improve unemployment. It now has been almost six months since Obama took office and the unemployment rate has increased at a record pace. The fact is the President should not be held completely responsible for job loss as it is a combination of many different events that result in increased unemployment. However the President is always the first person the American public points to when things don't go well. As with all previous U.S. Presidents during their time, Obama too will get the blame and in this case it is for the dismal unemployment numbers under his watch. It has now become that time in Obama's tenure as President where the American people are starting to lose patience and confidence. What makes this so bad for the Obama team is that his top advisers released a report just after Obama became President stating unemployment would not go over 8% if the stimulus plan was passed. To the contrary, unemployment will climb to 10% and over 2 million jobs have been lost since then.
- May 22, 2009 - President Obama signed into law sweeping reforms that restrict credit card interest rates and fees, marking a victory for Democrats trying to help recession-weary consumers and a setback for banks seeking to retain sorely-needed revenues
C - : There are some good ideas in this bill that will help many consumers and quell the shark approach credit card companies take that seem to go overboard. For example:
- May 10, 2009 - A White House report came out confirming the deficit for the current budget year will rise by $89 billion to above $1.8 trillion. This is about four times the record set just last year under the Bush administration. The unprecedented numbers come from the deep recession, the Wall Street bailout, the cost of President Obama's economic stimulus bill, as well as a ratio between what the government spends and what it takes in. As the economy performs worse than expected, the deficit for the 2010 budget year beginning in October will worsen by $87 billion to $1.3 trillion - March 10, 2009 - President Obama signs yet another enormous spending that stands at $410 billion. With this bill he breaks a campaign promise by approving almost 9,000 congressional earmarks in lawmakers' pet projects. Obama signed the bill in private, unlike a number of recent signings that took place with fanfare. - Feb 23, 2009 - The Dow Jones industrial average has fell 251 points to its lowest close since Oct. 28, 1997. In addition the Standard & Poor's 500 index finished its lowest since April 11, 1997.
F: So far Obama's big spending policies have set an all time record for an American deficit. Now after the 100 day mark, pressure mounts for President Obama. The struggling economy needs to see results from his policies sooner then later.
- May 3, 2009 - President Obama has announced a plan to close tax loopholes, stating " to detect and pursue" American tax evaders. The president said he wants to prevent U.S. companies from deferring tax payments by keeping profits in foreign countries rather than recording them at home. He also called for more transparency in bank accounts held by Americans in tax havens such as the Cayman Islands. "If financial institutions won't cooperate with us, we will assume that they are sheltering money in tax havens and act accordingly," Obama said. He explained this plan would generate $210 billion in new taxes over 10 years and "make it easier" for companies to create jobs at home. Over a decade, $210 billion would make a modest dent in a federal deficit expected to swell to $1.2 trillion in 2010. Under the plan, companies would not be able to write off domestic expenses for generating profits abroad. The goal is to reduce the incentive for U.S. companies to base all or part of their operations in other countries. Obama also stated the government is hiring nearly 800 new IRS agents to enforce the U.S. tax code
D-: Obama is approaching this the wrong way. Yes, it would generate new tax income for the American government and possibly close the deficit but it will hurt the economy in other more important ways....jobs. Generating new income and closing the deficit can be done more effectively in other ways (one example would be to cut the many unwarranted government entitlement programs). And contrary to Obama's belief, this move will not "make it easier" for American companies to create jobs at home. In fact, it will lose jobs. America has the second highest combined corporate tax second only to Japan. The average combined federal and state corporate tax rate in the U.S. is 39.3 percent, second among OECD countries to Japan's combined rate of 39.5 percent. This is one main reason why American companies are shipping jobs overseas. (the other main reason is to avoid high union costs). They do so to avoid the huge American corporate tax. American companies simply can not endure such high tax burdens, especially in this economy. So taking away this loophole will force American companies to either layoff more employees or close their doors. This is just another form of big government growing bigger. And adding 800 new IRS agents to enforce this tax code is just another step towards socialism.
- April 30, 2009 - President Obama took a shot at American citizens for participating in the April 15 Tea Party that took place across the country. Speaking to a crowd of supporters in Arnold Missouri, he mocked the tens of thousands of Americans by saying "you see folks waving tea bags around" and stated he would be "happy to have a serious conversation". The April 15, 2009 Tea Party was considered by millions of Americans to be an unprecedented event in protest against the government for too much spending and high taxes.
F: With this statement Obama was accused of being arrogant and dismissive towards many Americans who participated in a civil cross country protest against higher taxes and too much spending. It was clear Obama did not take the event as serious as the American people. The ironic part about Obama's behavior towards the nationwide protest was that the crowds consisted of many Democrats and Independents (as well as Republicans) who voted for Obama.
- April 17, 2009 - The US markets rally for the 6th straight week as investors find increasing hope that the US economy may be stabilizing. The Dow & S&P have had their best 6-week % gain since July, 1938, and the NASDAQ has had it best 6-week gain since March, 2000.The last time the Dow, S&P and NASDAQ all experienced 6 simultaneous straight weeks of gains was January, 2004.The Dow & S&P last experienced 6 straight weeks of gains May, 2007, the NASDAQ had 6 straight weeks of gains December, 2005. Since March 9th lows, the Dow is up 24.20%, the NASDAQ is up 32% and the S&P is up 28.54%/. Since CNBC Began on April 17, 1989, the Dow is up almost 248%, the NASDAQ is up 300% and the S&P is up 188%,
A: The stock market has currently made a quick recovery under President Obama. Whether or not Obama's policies continues to have a direct positive affect on the market remains to be seen.
- March 12, 2009 - President Barack Obama received a failing grade for his efforts to revive
D: It seems so far Obama's big spending policies does not sit well with some of America's top economists. His lack of ability to convince these economists his plans will work has many worried. So for that he gets a low grade. Although it might not be fair to the Obama administration considering the tough predicament he inherited, this sense of dissatisfaction will certainly spread throughout the American public quickly if there are no results within a few months.
D: Many conservatives were upset with the Bush administration regarding his spending policies and believe it opened the door for Obama to continue the spending. Obama has in fact done so and has taken it to the next level. With this budget bill, the Obama administration is well on its way to becoming the biggest spending presidential administration in U.S. history. This new bill does not sit well on both sides of the aisle. He has disappointed his supporters who voted for him because he campaigned to be different and not be politics as usual. He campaigned against earmarks. But this bill is filled with nearly 9,000 earmarks which comprise of about 1 percent of the spending package. (It should be mentioned that both Republicans and Democrats requested earmarks in this plan. Earmarks have, and will always exist). On the other side, it incites his opponents who gain more and more confident each time Obama passes through one of these enormous spending bills. It certifies their claim that he is a big spending, big government, taxing liberal, something that the mainstream America does not support. Again it should be pointed out, if this unprecedented spending does not turn the economy around, it could have the opposite affect, making Obama a one term president.
D: Since Obama was declared winner in the 2008 presidential election, through inauguration day and during his first month in office, the major stock market has been consistently dropping. Obviously, he did inherit a struggling stock market and it is still early in the game. So Obama has time to turn this around. However, if things do not improve this will be detrimental to his 2012 re-election campaign and more importantly will hurt the American economy ever further.
-Feb 18, 2009 - President Obama has pushed through another massive spending bill. A day after the historic stimulus recovery plan, Obama offered $75 billion lifeline to millions of Americans on the verge of foreclosures. It gives incentives to banks and lenders to reduce struggling home owners interest rates and make other changes to the loan terms. The goal is to help at least 4 million home owners and stop falling home prices. To qualify, lenders and mortgage investors would have to agree on a lower interest rate that would reduce the borrower's mortgage payments to 38% of their pretax income.The government would then provide financing to bring that ratio down to 31%
D: The mortgage crisis was caused by a combination of greedy lending practices, irresponsible borrowing by individuals, job loss and the recent strengthening of the Community Reinvestment Act which many experts believed pressured banks to serve poor borrowers and poor regions of the country . But the fact is, after lenders realized the mess they got themselves into through questionable lending practices, some of the biggest lenders in the mortgage industry righted themselves by already suspending foreclosures before Obama made this decision. Many were already working with home owners by extending the life of the mortgage and/or lowering interest rates. So in reality, what was this spending plan for? It most likely will be rewarding home owners who should not own a home in the first place based on their income. In short, it promotes bad behavior such as irresponsible borrowing. And it leaves the home owners who do pay on time, to flip the bill. If borrowers can not sustain the very reasonable mortgage loan re modifications that were already being offered, it's time to move out and rent. The government should not intervene. Let the free market take its course as it has done so for over 200 years in United States. Americans have this obsession that everyone is entitled to owning a home. The reality is everyone is not. Why is renting not considered an option to those who can not afford a mortgage?
- Feb 4, 2009 - President Barack Obama imposed $500,000 caps on senior executive pay for the most distressed financial institutions receiving federal bailout money, saying Americans are upset with "executives being rewarded for failure."
A+: It's bad enough the Wall Street executives are not being held accountable. But on top of that they are getting bailed out by the American tax payer money. So imposing a $500,000 salary cap on executives who receive bailout money is the right call.
- Jan 21, 2009 - President Obama freezes salaries of some White House aides: The pay freeze, would hold salaries at their current levels for the roughly 100 White House employees who make over $100,000 a year. "Families are tightening their belts, and so should Washington," said the new president
A+: This is an impressive move that most Americans will agree with. Who doesn't want to see Washington officials being treated just like everyone else? They need to sacrifice like other Americans
