$2 Trillion Argument - Glenn Beck Find's the Pro's and Con's From the Experts

On Thursday the Feds bought up $1.15 Trillion in Securities... They bet the farm without asking "You"

March 20, 2009 - 12:29 ET

Is the fed's 'bet the house' strategy going to be effective? If not, what happens? Glenn talked about this on TV last night and because it's such a confusing issue, he wanted to present the best arguments on both sides of the issue. Here they are:

PRO Government “Bet the House” Spending Plan arguments

• ‘Rambo Fed’ Will Buy Treasuries to Combat Crisis
  By committing to buy Treasuries and double his purchases of mortgage debt, Federal Reserve Chairman Ben S. Bernanke signaled his determination to avoid a repeat of the Great Depression and his willingness to pump as much cash into the economy as needed to end the current crisis.
• Fed launches bold $1.2T effort to revive economy
  With the country sinking deeper into recession, the Federal Reserve launched a bold $1.2 trillion effort Wednesday to lower rates on mortgages and other consumer debt, spur spending and revive the economy.
• Fed in Bond-Buying Binge to Spur Growth
  Dramatic Plan to Purchase $300 Billion in Treasurys Causes Biggest Drop in Interest Rates Since '87; Perils of Printing Money

CON Government “Bet the House” Spending Plan arguments

• The Fed End Game
  People are rightly outraged about the AIG bonuses but the amounts involved in that are tiny compared to the size of our problems.
• Dollar Rally Crumbles as Fed Ramps Up Printing Press
  The rally that pushed the dollar to the highest levels since 2006 is in danger of crumbling as the Federal Reserve starts buying Treasuries and ramps up its purchases of mortgage debt, adding to a flood of greenbacks.
• The Fed's Futile Move
  In an effort to promote liquidity and boost the economy, the Federal Reserve announced plans to grow the money supply by another 50 percent to 60 percent.

Source:  GlennBeck.com

To pork, or not to pork

1,000-plus-page spending bill includes hundreds of pages of earmarks - pet spending projects inserted by lawmakers, ranging from:

$185,000 for coral reef research and preservation in Maui County, Hawaii

$55,000 in meteorological equipment for Pierce College in Woodland Hills, Calif.

$9.9 million for science enhancement at historically black colleges in South Carolina.

In addition to the basic operations of government, the new budget includes 775 pages of earmarks, funding programs that include local museums, colleges and infrastructure projects.

Among the earmarked projects in the bill are:

$764,000 for the Lake George Watershed Protection Initiative in New York, requested by Sen. Kirsten Gillibrand, New York Democrat;

$9.9 million for South Carolina's historically black colleges and universities, requested by House Majority Whip James E. Clyburn, South Carolina Democrat;

$1.1 million requested by Senate Republican Conference Chairman Lamar Alexander and Sen. Bob Corker, both of Tennessee, for water treatment plant improvements in Tennessee's Unicoi County, as well as $300,000 for a sewer extension project in another county.

Examples of Earmarks in the Omnibus:

$713,625 Woody Biomass at SUNY-ESF. Walsh and Schumer sponsors

$951,500 Sustainable Las Vegas. Berkeley and Reid sponsors.

$24,000 A+ for Abstinence. Specter is sponsor.

$300,000 Montana World Trade Center. Rehberg sponsor.

$950,000 Myrtle Beach International Trade and Convention Center. Graham sponsor.

$200,000 Oil Region Alliance. Peterson sponsor.

$190,000 Buffalo Bill Historical Center, Cody, WY for digitizing and editing the Cody collection. Barbara Cubin is the sponsor

$143,000 Las Vegas Natural History Museum, Las Vegas, NV, to expand natural history education programs. Sponsored by Harry Reid

$238,000 for the Polynesian Voyaging Society, Honolulu, HI, for educational programs. Sen. Daniel Inouye is the sponsor.

$381,000 for Jazz at Lincoln Center, New York, NY for music education programs. Jerrold Nadler is the sponsor.
Rep. Jerry Lewis of California, the top Republican on the House Appropriations Committee, would spend $3.8 million on a Needles, Calif., highway.

Sen. Thad Cochran of Mississippi, the top Republican on Senate Appropriations, backs earmarks including a $950,000 nature education center in Moss Point, Miss. He defends earmarks.

Source:  GlennBeck.com

From Congressman John Campbell on the Spending Bill

Tuesday January 27th, 2009

Meeting with President Obama:  Today at noon, President Obama came up to Capitol Hill to meet with the 178 Republicans in the House. First, I was impressed because he was on time. OK, it’s a little thing but it is a little pet peeve of mine. President Bush was always on time and sometimes early. Governor Gray Davis was always late when I was in the California legislature.

But I digress. Then, it took a few minutes while Members of Congress went up to him to get his signature. Yes, your representatives are no different from everyone else when it comes to famous memorabilia either. Once all that was dispensed with, we got down to business. The President spoke for about 15 minutes and then took questions for half an hour.

Let me first say how impressive a man he is. I have never been in a small room with him before. He is very poised and confident and seems genuine. I doubt that there was a person in the room who did not come away from the meeting liking him. I never met President Clinton, but he had a reputation for his ability to charm a room. A fellow Congressman who had served during the Clinton presidency told me that as good as Bill Clinton was (and maybe still is), he thought that Obama was better. I might add that that kind of warmth and connection with a crowd may be part of what gets you elected president. As awkward as President Bush 43 often seemed on TV, in person in a small group, he too, was very warm, genuine, and likeable. Furthermore, the President’s grasp of the stimulus bill and the challenge that we face were thorough.  The atmosphere was cordial, and every question or comment was very respectful of the man and his office.

But in the end, I don’t think he changed any minds in the room, and I don’t think we changed his. I will be surprised if there is even one Republican vote in the House for the $825 billion bill as it is currently written.

We Republicans want to do a stimulus too. But we fundamentally believe that most of what is in this bill will not be stimulative. Infrastructure spending can create downstream jobs but increasing government buildings and adding more bureaucrats will not. Although tax cuts can be stimulative, giving money to people who pay no federal income tax, while at the same time refusing to cut taxes for the people who pay the most, and who could invest the most, is not stimulative. For his part, the President just disagrees. He admits that the bill has some spending in it that he doesn’t want either, but that the legislative process creates such things. He believes that people who pay payroll taxes but do not pay income tax still pay taxes and those taxes should be rebated. He also believes that spending will create more jobs than tax cuts or purchase incentives.

We Republicans believe that the enormous cost and the related borrowing are not worth the marginal benefit that will be achieved from this program and will actually retard growth in the future as this debt is paid back or as interest costs mount. Economics is an art and not a science, so there is, of course, room for disagreement.

Here are a few other tidbits from the meeting:

• The President believes that the “lost decade” of Japan is a more relevant comparison to the current economic situation than the great depression. He believes that the Japanese government did not act decisively enough to end their crisis.
• He says that the stimulus is only the “first in a range” of actions that government must take to manage this recession. So, expect more rescues or bailouts or spending bills after this.
• He acknowledged that we will have “unsustainable” levels of debt and deficit after this. His budget in February will require pain all around to deal with that. It was clear that the budget will include tax increases at some point. I would ask why are we spending more now to spend less later and cutting some taxes now only to soon raise them on someone else?
• Quiping to avid golfer and Republican leader, John Boehner (R-OH), who said his attitude towards his golf game, was “yes we can”.

We are not going to agree on this bill. I hope that this meeting laid the foundation for agreement on other things in the future.

Tomorrow is the vote in the House on this big spending bill. You will hear from me for the final time this week after that vote.

Until tomorrow, I remain respectfully,

Congressman John Campbell