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Monday, July 13, 2009

The Absolute Wrong Priorities

Yesterday, CNN released a current summary of how the government is spending your money.

The largest amount, 220.9 Billion were spent on stimulating the economy, but since there is no transparency or accountability, it is impossible to evaluate this expenditure. However, the rest of expenditures are easier to understand.

GM & Chrysler bail out $93 Billion
Prevent foreclosures $37.7 Billion
Bail out other companies $17.7 Billion
Credit easing $ 8 Billion
Extending unemployment $ 8 Billion

It is hard to imagine a more perverse order of priorities. While there is no way we can evaluate absolute expenditure levels without the better information (which the government continues to fail to provide), we certainly know what the rank order should be.

#1) Extending unemployment insurance and extending medical care policies
#2) Credit easing to make the reduction in the housing inventory easier
#3) Preventing foreclosures is a very good idea, but the numbers of dollars don't come close to matching the number of foreclosures taking place.

But the $110.7 Billion spent bailing out companies is a complete waste. Notice that the $110 Billion that is wasted, is twice the amount spent where it should be spent.

The government's economic team has no idea whatsoever about how to deal with this contraction in the economy (except, of course, to enrich Goldman Sachs).

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