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Bulls & Bears
This past week's Bulls & Bears: Gary B. Smith, Exemplar Capital; Tobin Smith, ChangeWave Research; Eric Bolling, FOX Business News; Pat Dorsey, Morningstar.com, and Tanya Acker, Democratic strategist.
Massive $787 Billion Stimulus Bill Set to Hit President's Desk: Should We Be Worried?
Tobin Smith, Changewave Research: We should be worried about this stimulus bill. This bill is not about stimulus. It's about spending more money on bad programs and initiatives. There is very little in this bill that will provide effective and practical support to private enterprise. Honestly, I really believe as Americans we've lost our sense of reality. There are over 1,000 pages to this bill, and Congress only gets a matter of hours to look at its contents before voting on it.
Tanya Acker, Democratic strategist: Republicans had no issue when George Bush presided over the biggest expansion of government since the New Deal. I think there is a larger underlying campaign by Republicans to really undercut bipartisanship on Capitol Hill. We need to create infrastructure, jobs and a better economy. The stimulus bill is the way to do this and I think Congress knows what's in it.
Eric Bolling, FOX Business Network: A prime example of how things are working around this stimulus bill is the proposed spending on high speed rail systems. Originally it was $1.3 billion, then it went to $3 billion, and when all is said it done, it has gone up to $9 billion. I think this is the sort of thing that led Sen. Judd Gregg, R-N.H., to withdraw from becoming commerce secretary.
Gary B. Smith, Exemplar Capital: In terms of the Judd Gregg withdrawal, I think he realized what he was getting himself into and turned around. He thought he'd be a part of some team of rivals, but in reality he saw there would be no room for maneuvering or any real bipartisanship. We know cutting marginal tax rates works in providing stimulus. But instead this stimulus bill basically cuts a one time check and extends welfare to people.
Pat Dorsey, Morningstar.com: There is plenty of stuff in this bill that does not even remotely resemble stimulus. Given the state of the economy, I think it's better than nothing. But the bill certainly could have been much, much better.
Should Government Spend More Money on Air Safety?
Eric Bolling: It has been 25 years since we beefed up air safety standards and air traffic control equipment. We need to convert to a fully GPS system. It's available, though it will cost some money. If you want to talk about infrastructure investments, start right there and start saving lives.
Tobin Smith: I fly every week, and when I talk to pilots, they all talk about how essential it is to convert to a nationwide GPS system. Instead, planes are commonly using sonar and this increases the risk for mid air collisions or other potential disasters.
Gary B. Smith: We know I'm a big opponent of having the government do anything the private sector could do better. But the fact is the government essentially owns the nation's skies. As a frequent flyer and concerned citizen, you want the government to be using the best and most modern technology in every airport.
Pat Dorsey: The fact we're using 35 year old technology to run our air traffic control system is dangerous. Not only would GPS be safer, but it would make flying much more productive. It would reduce energy consumption since planes would no longer have to circle the skies waiting for a spot to land. This would be infrastructure spending that would really make things better.
Stocks Rally on Home Rescue Plan; Did Market It Right or Wrong?
Tobin Smith: This home rescue plan just isn't well thought out. For taxpayers to go in and buy down mortgages will simply keep underwater homeowners there just a little longer. We can't just give money to people who can't afford to be living in these homes in the first place.
Tanya Acker: This will keep people who are about to become homeless from being thrown out on the streets. If you reduce the number of foreclosures, you reduce the toxicity of assets held by banks. You protect the value of homes, and we make sure the money goes to help out homeowners who will be about the financially rebound in the long term.
Eric Bolling: Recessions are painful, and everyone has to deal with pain. But giving money to homeowners that are underwater will only add to the problem and set a bad precedent for the future. We have to flush out all the bad subprime mortgages that exist in the housing market right now.
Gary B. Smith: I would actually like to know what the details of the plan are first before I decide to love it or hate it. The government coming in and backstopping the supply and demand of the housing market will completely distort housing prices.