Goodbye 2009 and Hello 2010: More of the Same From Obama

We are simply going to spend our way into -- not just a depression, not just inflation, not just hyper-inflation, but a potential depression.

Mr Obama is showing he has absolutely no intention of curbing spending whatsoever for 2010.

He has essentially cut Fannie Mae and Freddy Mac a blank check. Late on Christmas Eve the Obama Administration removed the $400 billion dollar loan cap. Now? No cap whatsoever. Cui bono? you might ask. The answer: not the citizens. With the billions already sucked up by FM/FM, read this:

Just 31,382 borrowers nationwide had received permanent loan mods as of Nov. 30 under the Home Affordable Modification Program (HAMP), the Treasury Department reported. Meanwhile, First American CoreLogic says that 1.7 million homes are likely to be lost to foreclosure next year.

So, once again, where did the money go? Who is monitoring? No one knows; no one is monitoring.

But wait, there's more:

GMAC already received $12.5 billion dollars from the federal government. Now it's going to get an additional $3.8 billion. What a deal!

H.R. 4173, the "Wall Street Reform & Consumer Protection Act," was passed by the House earlier this month. Here are some high points of the bill, courtesy of Barney Frank:

-- For all its heft, the bill doesn’t once mention the words “too-big-to-fail,” the main issue confronting the financial system. Admitting you have a problem, as any 12- stepper knows, is the crucial first step toward recovery.

-- Instead, it supports the biggest banks. It authorizes Federal Reserve banks to provide as much as $4 trillion in emergency funding the next time Wall Street crashes. So much for “no-more-bailouts” talk. That is more than twice what the Fed pumped into markets this time around. The size of the fund makes the bribes in the Senate’s health-care bill look minuscule.

-- Oh, hold on, the Federal Reserve and Treasury Secretary can’t authorize these funds unless “there is at least a 99 percent likelihood that all funds and interest will be paid back.” Too bad the same models used to foresee the housing meltdownprobably will be used to predict this likelihood as well.

More Bailouts

-- The bill also allows the government, in a crisis, to back financial firms’ debts. Bondholders can sleep easy -- there are more bailouts to come.

-- The legislation does create a council of regulators to spot risks to the financial system and big financial firms. Unfortunately this group is made up of folks who missed the problems that led to the current crisis.

-- Don’t worry, this time regulators will have better tools. Six months after being created, the council will report to Congress on “whether setting up an electronic database” would be a help. Maybe they’ll even get to use that Internet thingy.

Essentially, as Bloomberg.com writer David Reilly says, 4173 is nothing more than a $4 trillion dollar "gift" from Mr Frank.

And finally, don't forget, Mr Obama not only wants another stimulus package for 2010, but insists on passage of his ObamaKare and CapNTax bills -- sure to cost further trillions of dollars.

Folks, does anyone besides me think this is a recipe for the complete fiscal annihilation of the United States?

Yeah, right; let's really welcome in that New Year.

BZ