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  • The Trillion Dollar Debt Plan vs The New Deal


    As the chart on the right shows, The Trillion Dollar Debt Plan passed by the House last night surpasses even the inflation adjusted spending increases of the New Deal. To put this in perspective, Shanea Watkins and Patrick Tyrrell have crunched the numbers to look at what the 78,425,000 family households in the United States would have to give up, if the federal government had to borrow this money from its own citizens:

    These amounts account for a large portion of the goods and services that families spend their money on annually. According to the 2007 Consumer Expenditure Survey (CES), families are spending:

    * $2,330 on apparel and services,
    * $3,595 on health care,
    * $4,322 on food at home, and
    * $11,657 annually on shelter.

    If all families were asked to equally shoulder the burden of the $825 billion stimulus package, it would be like asking them to take on an amount of debt equivalent to what they spend on food, clothing, and health care or most of what they spend on shelter for an entire year.

    Posted in Ongoing Priorities [slideshow_deploy]

    21 Responses to The Trillion Dollar Debt Plan vs The New Deal

    1. J. Cullymore, West V says:

      What I don't get is, why not give the money back to the people of the USA. By directing the funds to the public, who for the most part will turn and spend it on reducing their debt, it will stimulate the economy more than giving it to big business/banks that will use it to write-off debt. By giving back to the public, Americans will reduce their debt, companies will be making money as the debt they are carrying gets paid off, and capitalism and the market based economy survives without Big Government having to control it all.

    2. john, mayport florid says:

      Can this be stopped? This is not right for America but our politicians(Democratic and Republican) are so blind or have their hands out for more they cannot see the truth. I do not want my kids and grandkids to be stuck with this bill.

    3. Joseph G. Gallagher says:

      I do not think anyone is really coming up with a satisfactory plan to handle this financial meltdown that has been caused by the massive losses in the housing sector and other risky financial investments and instruments that has spread throughout the global economy causing a credit crunch. Come up with a detail plan that addresses those issues including an analysis of possible unintended consequences for plan revisions and you may just be able to stop this financial meltdown from going in a world wide depression. In short, stop the quick talk with a lot of half baked numbers that probably have no substance and sit down with experts world wide and, think, and, I mean think hard and long, to come up with workable solutions. There is no quick fix here, President Obama, Congress, Banks, Financial and Investment institutions, and the World. Any action will require taking losses of all sorts before we work our way out of this mess. There is no free lunch here. So let's start thinking viable solutions instead of the usual tripe. I will add this final note to all our politicians. Some, not all, of the responsibility for this mess is on your hands and the people of this country know that well. What we require from you now is working together as democrats and republicans to solve this problem. We do not need at this point a democratic or a republican solution, we need a realistic and workable solution that has been tested for unintended consequences.


      Joseph G. Gallagher Jr. PhD.

      Stevensville, MT

    4. Brad Oaks, PhQ. Sale says:

      This isn't rocket surgery!

      What would have been a temporary and mild recession resulting from an over-heated real estate market caused by government-imposed irresponsible lending practices, is now going to be deeper and more prolonged by the New Raw Deal government stimulus plan.

      In the process of bailing out the financial institutions who willingly or unwillingly participated in the subprime debacle, the libs have bailed themselves out of being held accountable for irresponsible social engineering policy and regulations.

      Neither the trillion dollar New Raw Deal nor the Bailout addresses the underlying causes of socialist wealth redistribution or government market meddling. Quite the opposite.

      Kudos to the House Republicans and eleven sane Democrats who voted against the government stimulus scam.

      I don't really care whether or not Obama has a successful presidency. I am more concerned that America succeeds, and that the next generation of Americans are not burdened with an enormous monetary and liberty deficit.

      It's really simple.

      Do we want a bigger government that produces nothing, or do we want a vibrant free-market private sector that enhances liberty and economic prosperity?

      Socialism has failed every time it's been tried.

    5. Brent, Texas says:

      Well, because that would be the intelligent thing to do and would not ensconce the Democrat party into power by making as many people as possible dependent on the largess of the government at the expense of the productive.

      Who is John Galt?

    6. Jeff,Colorado Spring says:

      May I suggest something? EVERYONE needs to watch the movie documentary "Zeitgeist". You can Google it. It reveals so much truth about our country and it's current financial issues than I've seen anywhere.

    7. Ronald Alan Reeves says:

      The liberals: Pelosi, Reid, Frank, Obama, et.al. are moving with the speed of light to grab as much control as fast as possible.

      They are doing this under the guise of "crisis."

      Remember Hillary's "health care crisis."

      When liberals call something a crisis, you hold on to your wallet.

      Obama promised: "hope and change; change and hope; hope and change."

      When he and the liberals are finished, we'll all be looking for change — under the couch, in the glove compartment…….

      Keep up the good work Hertigage Foundation!

    8. Spiritof76, New Hamp says:

      Dr. Gallaghar's post above is interesting.

      I am not sure who the so called experts are. The short answer is there aren't many and they are not in Washington.

      Can we agree that the current meltdown is due to housing bubble created by the US Congress (Community Reinvestment Act) which forced banks to issue as much as 22% of mortgages to entities that can not afford them? I am sure you had seen commercials on TV and Radio telling you that you can get 125% of value of your house with no down payment, no income verification, etc. That type of risky behavior is not inherent in a free market lending. Actually when I bought my house, I had to put down a minimum of 20%, show steady employment for at least a year, show tax returns for the past two or three years and the principal and interest payments can not exceed 30% of my gross income. There was no housing bubble with that practice. A homeless person can not get a mortgage then whereas he could have gotten it as late as 2005.

      Fannie Mae and Freddie Mac were directed by Congress to absorb those risky mortgages. They bundled them and sold them as investment instruments with the tacit understanding that they were backed by the US government.

      Correction for that problem should have been: Leave the risk takers to fail and rescind the CRA in Congress. Instead, the government fabricated the $700B give away to rescue the reckless institutions. The government does not have that money. We are already running a deficit budget. Government prints the money (boosting money supply) or borrow from China and others. In that process we have racked up over $5 Trillion in liability rescuing the various entities.

      Now, we have another $800B stimulus – actually spending pork- commitment that is going through Congress. We don't have that money either. Together with interest, it would mean over a $Trillion. China and Russia are complaining that they want to move away from the dollar as a reserve currency. It is more than likely that the usual foreign investors will stop buying our debt. The money supply is being ramped up and would probably have to cover the latest stimulus plan.

      Government spending to stimulate the economy not only defies logic but is proven to be futile in achieving the objective of growing the economy. Consider the New Deal failure and the latest Japanese example of the 1990s.

      I am no expert but we have to exert common sense on this problem. The government derives its funds through taxation of productivity of people, borrowing or printing money. Any one of those when it exceeds the productivity of the economy will be a drag and not a boost. The government can redistribute but can not create capital for future productivity. Actually, its interference through taxation siphons the capital.

      The US government must do everything now to encourage productivity. How do you do that? Reduce the heavy tax and regulatory burden. Reduce the size of the government as our founders intended. Stop expecting the government to equalize the outcome. The government must only make sure that the laws allow equal opportunity. Stop borrowing and keeping artificially low interest rates by printing money like it is going out of style.

      A true capitalism will require failures as well as success. Failure must be viewed as leading to success next.

      What is in store? Inflation of the late 1970s, very high interest rates to keep the inflation down by pulling dollars out of circulation and double digit unemployment. A potentially worse scenario is the collapse of the dollar when others refuse to accept it as a reserve currency.

      Stop looking to experts for answers. We are in the mess that we are in largely because of them. We just keep digging thinking that we are getting out of it.

    9. Pingback: FDR Was a Piker - BrianFaughnan’s blog - RedState

    10. Pingback: Obama’s New Deal Is A Raw Deal « Bohicaville

    11. Mark, Connecticut says:

      It was government intervention and corruption over the last 150 years that slowly devolved our nation into the mess its in today.

      I blame pragmatism on the part of the politicians, ambivilance and ignorance on the part of the voters and corruption starting at the top of government, then emulated by corporate America because after all, "if the government is corrupt, why should we be honest?")

      In any 'crisis', more of the same actions that caused the crisis is what government always prescribes. Government creates need of more and bigger government through the creation of artificial crisises. This is what keeps government in power; the government-controlled education system is what keeps the population from thinking and questioning that actions of government.

      In a Statist society, you first take over the minds of the youth. In a generation, you will rule the nation.

      The Obama administration, with it's youth army decree sounds very familiar to those of us who fled the Weimar Republic in 1938. Certainly his social wealth redistribution is a page right out of Karl Marx's book.

      It's funny, in a way, when I read Atlas Shrugged in 1957, to see it coming to fruition in the non-fiction world of the US today. And Peikoff's "The Ominous Parallels" is spot-on with its predictions. We're nearly in the final chapters of these two books.

      The problem is that the majority of Americans fell for the lies of the liberal left wing media and are deaf to words of Reason. Until this changes, America will just keep going downhill, and rapidly at this point. Argentina, post 2001? That could be our fate in 5-8 years.

    12. Mike Godfrey, Omaha says:

      As a country, we are standing at an unnecessary precipice, and the Dems and Leftists and about to push us over with this misbegotten 'stimulus' spending/deficit bill. And then they are getting ready to pile on with cap-and-trade, nationalized health care, even more entitlements that we cannot afford, silencing conservative talk radio, union card-check, and over a billion dollars in federal funds to ensure that ACORN pads voter registration lists with thousands more fictional democrats. As for hope and change, I hope we can survive this change, but I'm sure as hell not very optimistic. It's like watching your own death in slow motion. The hopes of those who said that Obama would move to the center have been exposed as foolishness. Have a nice four years!!!

    13. Tim says:

      According to the Consumer Expenditure Survey there are 120 million households. That means that the 2009 estimate for stimulus spending, $169 billion, translates to ~$1,400 per household, less than any of those categories. The estimate for 2010 is $356 billion or a little less than $3,000 per family. I’m no accountant, but I don’t see how that is higher than the “amount of debt equivalent to what they spend on food.” That’s just the problem with the math.

      The underlying assumption of the whole article is that the money is going to something completely useless (kind of like the $600 billion we’ve spent in Iraq). Fortunately, a lot of it is going to things that will directly help the American people, such as unemployment benefits, food stamps, expanded EITC, and yes TAX CUTS. For instance, of the stimulus spent in the first year, almost half will be tax cuts. So yes, you could say Americans are being asked to borrow x amount, but half of that is going directly into their pockets. I wonder why heritage never complained when the U.S. government spent $4,000 per family on the War in Iraq?

    14. Nancy, Florida says:

      Lots of this money will also stimulate ACORN! They must be ready to reelect Obama you know.

      Folks, we have got to be in touch with our legislators and ALL who are in Washington even if they are not in your district. Let them know we mean it when we say "We will not reelect you if you do the wrong thing."

      To all you who voted for Obama, here is your change, and your hope is if you make it through the next 4 years.

      Well, I'll keep my religion and my guns and you can keep the change.

      Nancy of Florida

    15. Barbara, Cartersvill says:

      God help us all if this bill passes.

    16. Jim Konogeris - May, says:

      Never buy your goats in the middle of the night from any person that is smiling and breathing real hard or named Barack, Nancy or Harry.

    17. create says:

      Obama believes in the same ole democrat way.. Give away all that you don't own…

    18. Nancy from New Jerse says:

      Please forgive me if I'm wrong; but is it true that China is funding the U.S. to help us with our debt? If this is true; I have a plan to pay them back and keep us from being beholding to them. Many years ago Our government closed down many farms around the country. Seems we had to much surplus. It put a lot of people out of work, and farms went abandoned. China needs food, America could produce enough food to feed two of China. Lets open up the farming industry again, pay China with crops, we might even lease them the land,(with caution of course)It would open up jobs and pay down our debt. There must be a way, put on your thinking caps America, we can do this. It's always the people that solved the problems not the President. This is only one idea, maybe someone can do one better. I hope so.Nancy

    19. Pingback: Anonymous

    20. matt, happymicktickl says:

      "Nancy, Florida writes:

      Lots of this money will also stimulate ACORN! They must be ready to reelect Obama you know.

      Folks, we have got to be in touch with our legislators and ALL who are in Washington even if they are not in your district. Let them know we mean it when we say “We will not reelect you if you do the wrong thing.”

      To all you who voted for Obama, here is your change, and your hope is if you make it through the next 4 years.

      Well, I’ll keep my religion and my guns and you can keep the change.

      Nancy of Florida"

      your insane, absoulutely insane

    21. loco dog says:

      wat a mmmmmmmmmmmmmmmmmmmmeeeeeeeeeeeeeeeeeeeeeeeeeecccccccccccccccccccccccccc

    22. loco dog says:

      lol its all about myspace

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