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Bulls & Bears
This past week's Bulls & Bears: Gary B. Smith, TheChartman.com; Pat Dorsey, Morningstar.com; Eric Bolling, Fox Business Network; Tobin Smith, ChangeWave Research, and Maria Cardona, Democratic strategist.
White House Eyes Spending Freeze; Wants $1.2 Trillion Health Care Overhaul First
Eric Bolling: If they're trying to save money, we have a great place to start. We have a $1 trillion heath care bill, $787 billion stimulus package, $350 billion that has come back from TARP, another $1 trillion in PPIP, $1 trillion in TAF—we've actually surpassed $4 trillion dollars!
Maria Cardona: When this president came into office, he inherited a massive deficit and one of the biggest economic meltdowns since the great depression. He had to put the American Recovery Act into place to bring us back from the brink of a complete economic meltdown. We lost 190,000 jobs this month—which is completely unacceptable—but let's compare that to the 750,000 jobs that were lost back in January and last December. So while things are not where we need them to be, the numbers are going in the right direction.
Tobin Smith: We should to something smart and take on the big stuff, because discretionary spending only makes up 35 percent of the budget. If we look at Medicare alone, there are $1 trillion that can be saved by implementing technologies that we currently have at our disposal. We could also replicate the malpractice reform that already exists in Texas. Let's take all of those savings and put them into a tax credit for jobs and make those jobs include health care coverage.
Pat Dorsey: Certainly getting a 5 percent cut in the 35 percent of the budget that is discretionary would be a good start. If we can actually get some momentum and cut spending (something that hasn't happened the past few decades), I'll be dancing a jig. But let's not kid ourselves and think that it will actually solve our problems. We are going to have to tackle Social Security, Medicare, and implement health care that is actually reform and not just expansion of the system. Reform has to bend the cost curve, which unfortunately the current plan does not.
Gary B. Smith: The fact of the matter is that this won't be deficit neutral. We all know that this isn't going to be a $1 trillion program; it is going to cost a whole lot more. Medicare came in ten times over budget. The Big Dig came in a seven times over budget. Even the Kennedy Center parking lot came in four times over budget. There has never been a budget program that I can find that has come in anywhere near estimates. If this health care plan passes, we are going to totally blow the current deficits out of the water.
President Calls for Jobs Summit as Unemployment Hits 10.2 Percent
Eric Bolling: You generally have summits when you have no idea what to do next. If you go to Recovery.gov, you will find that only $207 billion of the stimulus has been spent. 640, 329 jobs have been created so far, so that comes out to about $323,000 per job. The stimulus package is not working, and they know this. That's why they're resorting to Plan B and holding a summit.
Maria Cardona: They are simply going to look at what we need to do next. Again, the first stimulus package was passed in order to bring us back from the brink of economic collapse. More than half of the money has yet to be spent. The money that has been spent has saved or created hundreds of thousands of jobs.
Tobin Smith: Democrats always confuse investment and expense. What we saw was that an investment was made when checks were sent to states in order to save jobs they cannot afford to have in the first place. This was actually a non-stimulus plan. Instead of actually creating jobs, we lost over 4.5 million jobs.
Gary B. Smith: The hidden subtext of the Obama administration is that they want us all dependent on the government so they can keep winning elections. Obama said that if we don't pass the stimulus bill, we would have unemployment at 10 percent. That isn't something that Bush said, it's something that Obama said. Right now we are at 10.2 percent but the effective unemployment rate is probably close to 17 percent. I don't understand how people can defend this kind of stimulus.
Pat Dorsey: Unemployment is always a lagging indicator in every recession and it typically lags by about three quarters. The economy is recovering now but we're probably going to see unemployment peak in March or April. It just takes time to create jobs because the economy has its own momentum, and whether or not we spend is not going to change anything.
Is Reagan's Pro-Capitalism Vision Under Attack in USA?
Gary B. Smith: I'm afraid he would be rolling over in his grave. President Obama is the most anti-capitalistic and anti-business president that I can ever recall. His entire message is that 'big government will do it.' Whether it's the bailout of GM, the takeover of Fannie and Freddie, or throwing money at Wall Street, he is setting the precedent that no one is allowed to fail. Without risk in the market, we don't have capitalism.
Maria Cardona: There is so much hyperbole that I don't even know where to start. Of course we are still the most powerful capitalist nation in the world, and of course President Obama is going to continue to pass policies to ensure that this continues. In fact, everything he has done is to make sure that our economy does not collapse.
Eric Bolling: There is nothing capitalistic about a pay czar telling us how much we can make. The same is true with the car czar giving us $4,500 if we can't afford a car. The same is also true with the mortgage czar that is modifying rates and excusing some of the payments if you can't afford to pay the bill. None of these things are capitalistic.