Tuesday, August 24, 2010

Iraq war v. Obama's stimulus

I recently posted the following article on my Facebook page: Little-known fact: Obama's failed stimulus program cost more than the Iraq war

One of my liberal friends came back with a response but the conversation will not fit into the facebook boxes so I’m bringing it to this blog. His post is below:

You have to spend money to make money at this is a direct reflection of the bush years and if anyone says anything different, they are in denial. Instead of just getting the info from right wing outlet like that Washington Examiner. If you look at their site, there is nothing balanced about it; it’s just another scare site.


Reagan blew five trillion on the military without raising taxes to pay for it. Bush blew five trillion on the wars in Iraq and Afghanistan without finding a way to pay for it. Matter of fact, not only did he increase spending but then gave tax cuts that DID NOT trickle down like what he said would happen. Obama is trying to get us out of the hole by a stimulus package by rescuing several companies to prevent the total bankruptcy of the US. The major difference is that Obama will raise taxes on the rich to help pay for these items. Plus some of the money that he is spending will be paid back to us. If you look at the charts during the great depression, you will see a sharp increase of government spending in order to turn things around. There are many sites that are unbiased, that show the facts. The Washington Examiner is not one of them. Trusting that site would be the same as trusting FIXED News.

I have a question. Why is no one talking about the $1 million News Corp and Fox Owner Robert Murdoch gave the Republican Governors Association. Why is there no talk that the person that owns the 2nd largest share of FOX NEWS is one of the main money contributors of the Mosque being built at Ground Zero? They like to talk about why it would not be right to build it but never say that they have a hand directly in it. These are things that need to be pointed out as well but I never hear any of that from the right. All i hear is spending is bad but never come up with a plan as to what they would actually do, except for using bumper sticker slogans. What is there plan?? Can someone tell me that? Cutting social security and Medicare is not a plan either like Mitch McConnell is proposing. That is crazy. He actually wants to do that in order to extend the bush tax cuts for the top 2% of Americans. So let the rich keep their money but then take it out of the hands of people that are less fortunate. They preach that this is a Christian nation; that does not sound too Christian to me. I find you to be a smart person Jason. Do you not see any of this, or are you just so anti Obama that you turn a blind eye? Just curious man, friendly debate, hit me back.

A couple thoughts in response:

1. Bias: There is no such thing as a non-biased news outlet. Everyone has a bias. Fox News is biased conservative, NBC/MSNBC is biased liberal, CNN is more centric but leans slightly liberal, etc. There is no way to completely eliminate bias. As I recall from a previous FB post you made, you prefer to watch MSNBC. It speaks to your view point and that’s fine, but you have to keep its bias in mine. And I freely admit that I prefer conservative news sources.

2. Reagan/Bush: I don’t see how Reagan’s tax cuts are probative to the current situation, other than to say that they were effective in lifting us out of the economic stagflation that characterized the 1970’s. That seems to be an argument against the Obama stimulus so I don’t really understand why you brought it up. As far as Bush, his mistake was in extending the war in Iraq long after we should have. The reason we went in was because of bad intel that was provided. The deficits that Bush ran were because of the war, not the tax cuts. In fact, if you go back and look at the tax cuts which became effective in the 2004 tax year, you will see that the total amount of tax revenue went UP after the tax cut rather than down and has continued to do so:

1998             1,769,408,739
1999             1,904,151,888
2000             2,096,916,925
2001             2,128,831,182
2002             2,016,627,269
2003             1,952,929,045
2004             2,018,502,103
2005             2,268,895,122
2006             2,518,680,230
2007             2,688,946,349
2008             2,742,190,129
Source: http://bit.ly/bJgrOi

3. As to the effect on the little man: most of the working force works for small companies, not large corporations like we do. If a business owner does not see a financial advantage in expanding his business, which is seriously cut into by the level of taxes that they are starting to see, they will have less motivation to hire more people. This contributes to the unemployment/underemployment rate that we are seeing. Also, on a theoretical level, this goes against the traditional promise of America being the land of opportunity. There is little motivation for someone our age to go into business if the risk does not match the reward, and the risk is high. This leads to an eventual shrinking of the private sector which even Obama admits is the vehicle of growth.

4. Great Depression: A perfect example of why the government is ineffective at turning things around. It spent billions of dollars (in today’s dollars) when adjusted for inflation on government programs to try to start the economy again, but what actually was effective was the private enterprise being forced to build the mechanisms of war for WWII. Granted, they were building for the government but it was the private sector doing it, and doing it very efficiently.

5. Fox News/Mosque issue: Rupert Murdoch has the right to give money to whoever he wants to, so does Saudi Prince Al-Waleed bin Talal. This issue bears some clarification. First of all, Saudi Prince Al-Waleed bin Talal owns 7% of News Corp, Fox News parent company, which no one will attempt to argue is a controlling interest. Fox News is also the fastest growing news agency in the United States. Any businessman wants to invest in growth. Businessmen regularly buy stock in companies whose products they don’t like because it makes them money. So while it is certainly disturbing to see him contribute to the Mosque, I do not see this as inconsistent under the circumstances (desire to make money and to support his religion).

6. Social Security is not what anyone would call a “going concern”. If you expect to get anything out of it when we’re in our sixties, you have another think coming. As far as Medicare, or Medicaid for that matter, Obamacare has made that more expensive for the middle class. We didn’t need Mitch McConnell for that. As far as Mitch McConnell, I’m not sure what I think of him at this point. He seems to be Republican old guard which I don’t like at all.

7. Economic plan: Get the government out business. Sure, keep the corporate taxes there, just put them at levels that will not kill investment and growth. Allow medical insurance companies to compete across state lines. De-Regulate businesses in general.

8. The Church: The modern American church is a sorry excuse for what it should be. Instead of focusing on the commands of Christ to feed and clothe the poor and do good works it is focused on the latest building programs. I completely agree with you in that regard. Having said that, the government is terribly inefficient in any kind of charitable endeavor. A solution needs to come from the church side on this.

9. I don’t turn a blind eye and I’m always willing to be shown the error of my ways, but this is something that goes to core American principles for me. At its very basis, the Federal government is not supposed to be there to take care of people. Its supposed to protect us from all enemies foreign and domestic, and solve disputes between the states. All other powers are supposed to be reserved to the states and to the people. Both parties have done a miserable job of pursuing these ends. We may disagree on these things, but I respect your opinion while strenuously disagreeing with it.

P.S.  For a better understanding the Great Depression economics and how it effects us today, see the following book:

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