The flushing sound of the American Economy

This afternoon, President Obama signed the American Recovery and Reinvestment Act, otherwise known as the stimulus bill. The bill obligates the country to spend $786 billion dollars of money that it does not have. The actual amount of stimulus included in the bill is only somewhere between ten and thirty percent, which means that at least $550 billion of it is old fashion pork. Most economists do not think that this bill will do much good, and the stock market promptly dropped another 5%. Worse, in his remarks at the bill signing, President Obama indicated that there is more to come. It is likely that we will see at least one, if not two, additional stimulus bills this calendar year.

But there is a concern that is larger than the debt that we are saddling onto our children and grandchildren. There is a move brewing in Washington to nationalize the banks. President Obama suggested on Friday that the United States should "temporarily" nationalize its banks. Sen. Graham (R-SC) chimed in yesterday and said that this concept should be considered. This idea is beyond reckless. Right now, the State of California is unable to send tax refunds to people due to its financial incompetence. Can you imagine not being able to pay your rent because the "Bank of the United States" invested your money into Social Security Trust Fund IOU's?

The old adage is that people should have six months of expenses saved up in case of a rainy day. Given the hurricane brewing in Washington right now, I think that even a year's worth of expenses saved might be too conservative.