On the last day of session last month, Congress passed raising the debt ceiling by $1.2 Trillion. Five weeks later Obama is now telling them to pass a bill that is one third the cost of the entire increase. When is this going to stop? It won’t as long as Obama is in office. More than ever we need to remove him next year.

As Obama started to talk about the latest bill, The American Jobs Act, he was trying to inspire the crowd. “These men and women grew up with faith in America that hard work and responsibility paid off.”, Obama stated. Unfortunately nearly 50% of Americans don’t feel that way any longer. Forty years of entitlement programs has changed that mentality. He continued, “Our economy will be driven not by Washington, but by our businesses and our workers… but we can help. We can make a difference.”

I can see from the last twenty years how well the free market works when Washington helps. With help like that, please don’t help. According to what Obama said, construction jobs for bridges, roads as well as public schools were pretty much all the ones that would be created from this bill. The last time I checked, construction jobs only count for roughly 20% of the entire work force in this country.
I’m not sure if anyone notice that when Obama was talking about the different jobs and for who it “will” help, the president of the union board, ??? was being shown on the screen. So that pretty much gives me an idea on the kinds of jobs that this bill will help. The union jobs will be the ones to benefit and of course the unions themselves.

With this bill he said that it will help “rebuild America”. Repair decaying roads and bridges. What I would like to know is, isn’t that what he said about the $800 billion stimulus bill? We been rebuilding America’s roads for the last fifty years according to out past presidents and Congress members. When are we going to be finished? He mentioned a bridge that connects Kentucky and Ohio, which is a major trucking route, is in such dispair, it must be done. Why wasn’t it done two years ago with the stimulus bill?

The line that gave me a good chuckles was, “…everything in this bill will be paid for.” Really? How about this, get the money together before starting any projects and pay for it first. Then I’ll believe that everything in the bill is paid for. After all, the word “paid” means that some gave the money for the service/product.

Unfortunately, the Administration suffers from short term memory since only a little more than two years ago, he tried to slow down the foreclosure rate and was totally unsuccessful. His last plan was to help between 4-5 million homeowner keep their homes from foreclosure, but the plan (as of May of this year) only help 810,000 refinance into loans with a lower rate. The refinancing initiative will allow certain borrowers to refinance loans that are backed by the improperly operated Fannie Mae and Freddie Mac. As a side note, both Fannie and Freddie have borrowed over $170 million over the last three years because of poorly run plans.

The Obama Administration is looking to make changes to existing programs aimed to allow borrowers to take advantage of lower mortgage rates, which will also include allowing them to refinance the loan even if they owe much more than the current property’s value. While the idea is expecting to help the borrower to free up cash for other spending to drum up overall business activity, it’s most like not going to do so since many don’t have enough money as it is to do more than they already are.

Either way you look at it, Obama and his cronies are grasping at straws to figure out a way to “fix” the economy. The only true way for the housing market to correct itself is to get the government out of the way and let the market correct on it’s own. While Fannie Mae and Freddie Mac account for nearly 90% of all residential mortgages, their time has come for them to be dissolved. It will take years to work out all the paper work to get all the assets of their books, but it needs to be done. The federal government was never intended to be in the housing market wither as a seller, buyer, loan manager or a landlord.

It’s too bad that Barney Frank is too close to the issue of Fannie and Freddie to make any clear decisions on what the right thing is that needs to be done. His life mate is on the board of directors and he doesn’t know how to run a business either.No matter what the government does, it’s going to affect the housing market in a negative way. As long as they are involved it will continue to be dragged out instead of a some-what quick recovery.

Let’s face it, the federal government is doing what they can to help the financial sector from taking another dive into the abyss and asking for more money from the tax payers.

The issue that has been going on is that the federal government has been getting involved to “help” a particular industry and/or company for so long that we no longer know what is an artificial or organic supply and demand product or service.

During W.W.II, the wool industry was busy supplying the material to make our military’s uniforms. To make sure the industry would always be there to keep our troops clothe, the federal government gave subsidies to them to the tune of millions of dollars. Years later as synthetic materials were being used for the military, Washington continued to pay the wool farmers.

The agricultural subsidies assist farmers and agribusinesses to supplement their revenue, manage the supply of the different commodities and to influence the cost and supply of such commodities (ie corn, wheat, rice, milk, sugar). So the government is dictating the price as well as the supply of these commodities. In this situation, the laws were passed during the Great Depression and have remain in place to this day. We have farmers being paid not to grow corn on their land. Many farmers receive some sort of government (tax payer) financial assitance.

A Canadian report claimed that for every dollar U.S. farmers earn, 62 cents comes from some form of government, with total aid in 2009 from all levels of government adding up to $180.8 billion.

These are just two incidents where government has manipulated the free market for decades. The free market hasn’t been free for just as long. As long as the federal government is involved, no industry or company will go bankrupt. The whole idea of competition is that the strongest one wins. Well in this case, whoever pays more money to the politician campaign funds, wins.

Let’s take a look at the recent bailout of General Motors. They received billions of dollars from Washington to keep them from filing bankruptcy. If GM was left to file bankruptcy, the union contracts would have been history at that point. The company would have restructured to survive or close their doors forever. Is that a bad thing. On the surface, yes. When you go ahead and let the free market work it out, it would become a good thing.

How? Simple, it’s obvious that GM wasn’t making the product(s) that the customers wanted. If they continued doing the same thing, they would have had to close their business forever. An entrepreneur, with the financial backing, would step in and buy the assets of GM to build his own vehicle. They would hire the former GM workers and a new car manufacturer would be born to make it or break it. He either builds want the customers want or he goes out of business too.

The unions are a powerful force with plenty of money to persuade politicians to help the their industry/company. The government makes it impossible for new car companies to start in the industry since there are so many regulations that only the “big” dogs can work within them.

The federal government has made it so hard for the free market to run like it should that it’s questionable to say that we can ever separate the two. The first step is having Congress cut programs that support industries that wouldn’t survive without it.

Last Friday, August 5, 2011, Standard and Poors downgraded the United States credit rating to a “AA+” with a negative outlook. The reason for the outlook assumption is the fact that Washington along with Obama have lead this country into a complete and total spending frenzy and when it came time to handle the debt ceiling issue, Congress and the president acted like a bunch of school kids fighting over issues that really didn’t do anything for the deficit. This wording by politicians for planning “cuts” is a joke. In essence what they want to do is to cut spending on future projects, which is fiscally wrong since it does nothing for the spending that is already going on.

Obama finally gave a press speech today (two days after the S&P report), in regards to the downgrade by S&P. His entire speech was nothing but another campaign style speech where he was vague and not direct with a response to the situation. He first wants to make a foolish comment about Warren Buffet and how America will always be a “AAA” rated country. His approach to the issue seems to be more relaxed and carefree to what needs to be done. He didn’t mention anything about his failed policies or the fact that his plans have been nothing but a way to spend tax payer’s money.

Standard and Poors stated it clearly that if the United States doesn’t get a grip on the spending habits and reduce the deficit by a considerable amount, they see themselves (S&P) downgrading the U.S. again within the next two years.
So what does Obama say in his first speech since the downgrade? He talks about future cuts and tax reform and Medicare reform. His comment alone about raising taxes on those who should “pay their fair share”, shows this man has no clue on how to run a lemonade stand, let alone the leading country in the free world. His next comment spoke about reducing taxes for “those that need it” to help stimulate the economy. Real economic stimulation comes from the free market and job growth. Without it, we will slowing diminish into a second rate country.

This country will never get back it’s AAA rating as long as we have politicians in Washington that clearly don’t know how to make a business run efficiently and profitably. As it is, Obama was asked to remove Timothy Geithner as the Secretary of the Treasury and instead, Obama begged Geithner to stay on his administration. How can you be so blind to see that the Treasury Secretary doesn’t have a clue as to what’s happening. He used to be on the board of the New York Federal Reserve and supposedly knows all about ratings and how Wall Street works. In April, Geithner stated that a downgrade is not in America’s future and that the country will retain it’s AAA rating from all three rating agencies. So where is the man’s knowledge and talent when this country needs the right man in the Treasury? Obama doesn’t know what to do, Geithner doesn’t know what to do and the people that Obama has put in his administration don’t have a clue either. If I didn’t know any better, I would think that this is the objective of president Obama to destroy the United States as this world has known it and transform it into something of his own choice. Oh wait, isn’t that what he said he was going to do when he was on the campaign trail? Then again, from listening to his speeches, I don’t think he ever got off the campaign trail in the first place.

The whole idea (according to Obama) of getting the debt ceiling raised was to stop the country from defaulting on it’s loans as well as creating more jobs in this country. I find that hard to believe since one of the first things he did when he was sworn into office was to get an almost $1 trillion stimulus bill passed to do the same thing. Yes I know he tells us that the stimulus bill created or saved two million jobs. Analysts have looked into the facts of jobs created from the stimulus and it’s way lower than what the Obama administration has been reporting.

As you can see the stimulus and anything else that the administration is doing hasn’t created any jobs or even turn this economy around. It’s been reported that economic growth in America for the first half of the year (2011) is a staggering less than 1%. So how is giving the federal government any more money going to help?

The federal Reserve is now thinking of what they can do to stimulate the economy and get the country back on it’s feet. All I have to say about that is they are part of the reason why we’re in this mess. Manipulating the currency and controlling inflation artificially for the last hundred years hasn’t helped, so where should we think they’ll do anything now in the best interest of America. Chairman Ben Bernanke has touch base on starting a third round of bond purchases. The federal Reserve can also cut the interest rate for banks that hold excessive reserves as well as pledging to hold its assets at a record high and interest rates at record lows for a longer period, Bernanke stated.

As a nation, the only way we can create jobs and to get the economy moving again is to stop Washington from continuing has they have for many years. We need to cut back on government spending. When I say cut spending, I don’t mean cut Social Security or Medicare. Those programs are not the main problem. Yes they both have issues within the systems but reform is much different than cutting. Politicians are too concerned for their contributors as well as their own political careers. Doing the right thing in Washington would be political suicide. So if we want to save this country, we must remove each and every one of the politicians within the Beltway. Of course it will take years to do so since not all of them are up for re-election in 2012. If they’ve been in office for two terms, it’s time for them to move out of the way and let someone else try something else, or at least improve some of the current policies. Once we get Congress and the president to stop their excessive spending and let the markets correct themselves, we will continue to be in the same position.

Economist say that it will probably have little (if any) impact on the economy. The reason for that is, none of the cuts come until 2014. Many economists and the Federal Reserve Chairman Bernanke advised Congress that cutting too much too soon could hurt the weak economy. They also recommended that reduced spending over the long term would help the economy.

According to the deal, discretionary spending would be cut $21 billion next year and $42 billion in 2013. Social Security Medicare and Medicaid will not be touched, as the more “politically aware” knew would happen. It was a scare tactic all along. A political tool that the politicians, both Republicans and Democrats alike, use against the other. What kills me is the fact that these cuts will only add up to about 0.2% of the entire economy’s output for that time period.

The rest of the cuts will come over a period of 10 years (why always 10?). The first phase will reduce spending by $917 billion and the second phase will add another $1.5 trillion which will be decided by a congressional committee. So let’s create another committee to look into something else the government screwed up on.

The politicians we have in Washington are trying to “fix” the problem in which they caused in the first place. Let’s face it, we are going to face the pain one day for the actions of our past. We need to cut the spending now, not over a period of 10 years. Don’t get me wrong, I know it shouldn’t be immediately. No matter what they (politicians) tell us I know the economy is struggling and as for a recovery, the past two years, the federal government has been hindering it from really happening.

I (like many of you) haven’t read this bill/deal/sellout yet, but I’m sure there’s some scary stuff in it. One thing stated in the deal is that if lawmakers fail to reach a deal on the second round of cuts, The Pentagon’s budget will automatically be cut by $500 billion.

All I can say is that this deal made it possible for all of the politicians to pass this issue off once again until after another election. OK, they avoided default, but let’s be for real, the credit agencies can still go ahead and down grade the United States.

Which in turn will cause interest rates to go up for everyone.

That is what the cost will be for the American people. Higher rates in a time when the economy is in the toilet (and will remain for some time), unemployment is at 9.2% (until the July report comes out on Friday) and the financial future of this country is still unknown.

There are billions of dollars being spent on programs that do nothing to increase jobs in America or to raise GDP. Instead of talking about those items, both parties are using scare tactics about Social Security and Medicare. Two things that will get the American voter engaged in doing something next year at the booth.

At the same time, the Democrats are feeling the pressure from the labor unions telling the Dems to stand firm on Social Security and Medicare. While I strongly believe in keeping the benefits of the two programs in place, there are other areas of the programs that can be cut. Such as administration costs of the program. We all know that government offices have to many employees in each of the different offices. They can not tell us that there is no way to cut at least 15-20% of staff within each of the programs. Most of the system is automated and to have so many employees in the system is taxing on the program itself.

The federal government has known about this issue for months now and have touched on the subject, but they wait until now to really get involved in it. Why is it that they wait until the last minute to do something? It’s because with the pressure of time, they can push the bill through quickly and claim later on that they didn’t realize what was in the bill since they didn’t get adequate amount of time to go through it. Of course the American people have short-term memory and forget that they waited and that’s what the politicians hope for, so they can do it again.

So as we see the politicians are trying to draft anything to get a majority of the politicians to vote yes on extending the debt. The Republicans in the House of Representatives have unveiled a two-tier plan that will cut $1.2 trillion over a ten year period and will only raise the debt ceiling for a few months. Obama has already expressed that he will not sign it because it’s a temporary fix.

Meanwhile the Democrats have presented their own plan to cut @2.7 trillion over the next ten years, but with a debt limit hike that will carry it through the 2012 elections. An election where Obama and many lawmakers will be up for re-election.

As we see over the last decade that the situation is getting worse as in the politicians doing what is necessary to get the fiscal condition of this country back in order. It’s always a temporary fix and not a permanent one. Each time the debt ceiling has come into play, politicians never cut the spending that is needed, instead they draft plans that cut spending in the future, not in the present. What happens is the cuts never come, but the spending and the raising of taxes always do.

We are coming to the end of the fuse and if we, the American people don’t do something to change the mindset of Washington, we will be finished sooner than later. This has gone on for way to long and it will come to an end one way or another.

According to First Data Corp.’s (the largest credit card processor) SpendTrend report, which was released this month, shows an ever increasing amount of credit card uses by consumers paying for basic necessities since salary increases are not keeping up with raising food and gasoline prices. Senior vice president at First Data, Silvio Tavares expressed that it may represent the increasing cost of fuel.

Tavares is quoted “Consumers, particularly in the lower-income end, are being forced to use their credit cards for everyday spending like gas and food.” He continued, “That’s because there’s been no other positive catalyst, like an increase in wages, to offset higher prices. It’s a cash-flow problem.”

The cost of food and gasoline are rising and leaving American less money to spend on discretionary items. Tavares said, Household spending accounts for about 70 percent of the world’s largest economy.
While he commented about this is slowing the pace of the economy, I say that we aren’t in the recovery stage yet. How can you slow something down that doesn’t exist?

In the report it shows the increase across the board in regards to credit card usage. Gasoline purchases, up 39% year-over-year ending June 2011 and food shopping increase 5%.

Figures from the Commerce Department show an After-tax income adjusted for inflation fell 0.1%. According the the Labor Department, energy prices climbed 8.2% and food 2% during the same time. That is a major swing in difference for low to middle income families.

We are not out of the woods yet, so for those of you that are feeling the pinch already, work on your budget since I feel that Congress won’t work on their budget, we will continue to struggle a little more. Those who think this increase usage is a sign of consumer confidence coming back, you might want to think again.

With the present system, we pay taxes on everything, income, corporate, property, sales, and a whole slew of others that I’m sure you can name. You are basically being taxed on both ends of the equation. Why should you pay taxes when you get your money and then when you want to spend it? The system was designed to get the government the most of your money without you really complaining.

This country was created because our fore fathers felt that they were paying taxes to England without representation. That is something that is going on again in this country. When was the last time your local politician or even your state representative actually went around and ask everyone (or at least most) of his/her constituents what they really wanted? Of course they will take the time to talk to the wealthiest of the sector, but that’s not the majority of the sector.

If we were to go with the Fair Tax Plan, there would only be one type of tax. The consumption tax would be the only tax in place under the Fair Tax Plan. Without corporate taxes, payroll taxes and a few other related taxes that corporations pay, their products would be cheaper because of the reduce costs of running the business. With a company having less financial burdens on their balance sheets, it gives them more capitol to invest, do research or hire more employees.

Another thing that is never considered when talking about taxes, is the handful of industries that don’t pay taxes. The drug industry which is a $40+ billion one doesn’t pay any taxes on their profits, since they don’t record or report any of them. With a consumption tax, the money that is made in these types of business would be collected. Think of it, when a drug dealer goes out and spends his/her money, the government is only collecting a small part of the taxes they could have collected if the Fair Tax Plan was in place.
Don’t forget about all the gambling, prostitution, and other illegal activities that don’t pay their share of the tax burden that it takes to keep this country running.

I don’t have a problem paying my taxes. I like to have policemen protect my family from criminals, firemen to put the fires out when they threaten my home and family. Let’s not forget that having the garbage picked up is a good thing too. These are the types of taxes that each state imposes on it’s residents.

The federal taxes have gotten totally out of control. Our federal government’s responsibility is to protect our borders from foreign attacks. It was the States that created the Federal government, not the other way around.

After all that Obama has done to “save the economy” from it’s recession, it hasn’t worked. Besides, why would it? Everything he has done has been the opposite of Reaganomics. The increase in the deficit is the most than any other president has done and if you were to combine the spending of all the past presidents, Obama has them beat. Programs that have been supported for by the stimulus are nothing more than wasteful spending that won’t do anything for growing jobs and bringing us out of this recession.

Of course some voters, especially liberal and progressive Democrats, think this is what needs to be done to save the country. They don’t seem to realise that more wasteful spending is not the answer!

As for ideas that will save this economy and help launch us ahead by leaps and bounds, Peter Ferrara has written a book that details the issues we are experiencing now because of the policies implemented by past and present administrations. In his book “America’s Ticking Bankruptcy Bomb”, Peter shows us ways to turn the economy around in a short period of time. He talks about how a normal recession lasts about ten months, while this current one has been going on for forty-one months and how the situation can not be changed while on this current course.

Click the link to view or purchase this eye opening book.

It’s a must read book for all those who are concerned with their financial future.