Thursday, July 9, 2009

Warren Buffet Second Stimulus: Buffet $787 Billion not Enough

Warren Buffet thinks Stimulus No. 1 was like half a viagra tablet mixed with candy. Strange way to describe $787 billion of taxpayers money. Buffet contends that $787 billion was not enough money to fix anything [my paraphrase] but some more money will fix everything. Buffet is in favor of a second stimulus. The problem with the first stimulus was that politicians took care of their "constituents," he said, rather than wisely allocating the money - that unprecedented huge sum of money - $787 billion.

Warren Buffet
For some reason, the Oracle of Omaha, and the head of mammoth Berkshire-Hathaway, Inc., Warren Buffet, thinks that throwing some more taxpayer money down the spider hole will result in something positive. With Congress talking about another $50 billion - only - how will that small influx fix what $787 billion cannot? The latest from the Department of Labor Statistics as of July 2, 2009 reports another 467,000 jobs lost in June. How do you like that stimulus now? Created to create jobs - it has not worked and of course, it could not because all the high-priced watch dogs, including Joe Biden, being paid by the administration to track the money, don't even know where to start. It's the perfect Obamaism:
You created a situation where you cannot be wrong," said the Montana Democrat [Max Baucus]. "If the economy loses two million jobs over the next few years, you can say yes, but it would've lost 5.5 million jobs. If we create a million jobs, you can say, well, it would have lost 2.5 million jobs. You've given yourself complete leverage where you cannot be wrong, because you can take any scenario and make yourself look correct."
And the Wall Street Journal says in the same article linked above:
Now, something's wrong when the president invokes a formula that makes it impossible for him to be wrong and it goes largely unchallenged. It's true that almost any government spending will create some jobs and save others. But as Milton Friedman once pointed out, that doesn't tell you much: The government, after all, can create jobs by hiring people to dig holes and fill them in.
In late June we were told that 21,000 highway and transit jobs have been created since May 31. Yesterday we learned that most highway work consisted of replacing asphalt facings. Buying stock in asphalt might have been a good thing. But consider this:
The $27.5 billion for road-building in the stimulus package will not replace the private-sector work that many of the participants lost last year, when high oil prices dealt a double blow to the industry.
The State of New York is spending $9 million of its $74 million stimulus for "a thin layer of asphalt to resurface roads. Senator Chuck Schumer says this work will both create and retain jobs, but all of the projects are scheduled to be completed by Fall. But then what? Oh, but look at this. In Ohio, 14,200 jobs will go to teens and young adults for stimulus-funded highway projects. Business Week says that the Ohio unemployment rate has risen to 10.8 percent but summer jobs. The summer jobs program will put "young workers" to work in parks, community colleges, hospitals and public schools. Sounds like government jobs to me. Fast-food restaurants can't catch a break and those "help wanted" signs will remain in the window because all the kids will be working on the highways in Ohio. But then what? The truth is most jobs growth is in temporary government jobs. We need to remind ourselves that the government does not "make" money, they only "receive" money from you and me, and then redistribute it, in the case of the stimulus, through government jobs. So the Oracle of Omaha, Warren Buffet, doesn't really know much more than you or I. He apologized to his multi-billion dollar investors recently and told them he made some mistakes on their behalf. So how does he justify a second stimulus, which no one wants and which, if it should happen will be many billions less than the the first? The number being floated is $50 billion for Stimulus No. 2. What is it that $50 billion can add? What is it that $50 billion can create that the $787 billion cannot create, still yet today. The answer is "nothing." While Obama recently said "the stimulus has done its job" (can you believe he said that???) Rep. Mike Pence (R-Ind) said "the only thing the stimulus plan has stimulated is more government and more debt." What is true (using an Obamism here) is that if Buffet thinks politicians considered their "constituents" wishes to a fault, why would they not do the same again? And which Congressman's "constituents" are more worthy than others?

©2007-2012copyrightMaggie M. Thornton