Friday, February 13, 2009

Did they have a Plan?

During the George W. Bush lame duck session the Obama Team was suppose to be working on a plan to stimulate the economy. Rep. Pelosi announced that a stimulus bill would be ready on day 1 of the Obama Administration, those hopes were soon dashed. Mid February finally sees the passage of a stimulus bill after being misdirected by Republican Demands for tax cuts and incentives. The idea of the bill was suppose to be a massive Government spending to grease the economy. What did the bill eventually look like, 43% tax cuts. Exactly which unemployed person will benefit from a tax cut when they don't have an income to tax.

The Obama Financial Team either does not have a plan or they do not know what they are planning for. The Stimulus Bill will fail to stimulate and the Financial Bill proposed by the Treasury rocked the market with its lack of specificity and goals. Basically the investor class through up their hands in disgust and sold off investments as quickly as they could while fleeing to Treasury Bills, Bonds, The Dollar and GOLD.

The Obama Financial Team is stocked with world renowned economists, is this the best plan they could come up with? If it is, it is a disgrace. It would have been better off taking the money and paying off every mortgage in the country, whatever banks could survive after having all their mortgages paid off would be the ones that could continue to do business with tight regulatory controls, all the rest should enter Bankruptcy and sell off their assets.

The Current Treasury Plan is a fiasco. A mixed entanglement of failed banks, private equity and Federal back stops, what can this accomplish other than preventing any down side for the private investors who stand to make a fortune if the "bad" assets turn "good". This plan is in serious need of revamping.
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