Cut the Pork to Cut the Debt?

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Cut the Pork to Cut the Debt?

New calls for earmark ban after passage of 1,200-page spending bill

DISCLAIMER: THE FOLLOWING "Cost of Freedom Recap" CONTAINS STRONG OPINIONS WHICH ARE NOT A REFLECTION OF THE OPINIONS OF FOX NEWS AND SHOULD NOT BE RELIED UPON AS INVESTMENT ADVICE WHEN MAKING PERSONAL INVESTMENT DECISIONS. IT IS FOX NEWS' POLICY THAT CONTRIBUTORS DISCLOSE POSITIONS THEY HOLD IN STOCKS THEY DISCUSS, THOUGH POSITIONS MAY CHANGE. READERS OF "Cost of Freedom Recap" MUST TAKE RESPONSIBILITY FOR THEIR OWN INVESTMENT DECISIONS.

NEW CALLS TO BAN "PORK" AS MASSIVE SPENDING BILL ADVANCES

Gary B. Smith: $32 billion last year. I think most people in America would think $30 billion is a lot of money. I don't think this $30 billion is even spent wisely. There was $5 million to the wood industry to study wood utilization. You would think that would be something the wood industry could do by themselves without our money. That's what gets me. That's why I think this earmark, pork, whatever, should be stopped right now. It gets to the whole thought process of republicans and democrats thinking that it's their money to spend as they see fit. The problem is they spend it so inefficiently on stupid things.

Tobin Smith: This is like a moral black hole. Forty of these "special projects" - earmarks-were started by republicans who gained office a year and a half ago because they were against earmarks. What happens is, the immorality of this festers. Then, all of a sudden, you have to raise money, and then you want to get reelected. And then an earmark becomes a special project; a special project becomes almost $2.5 billion here, $1 billion there. If we're not going to address the big issues, then let's at least kill this thing.

Jonas Max Ferris: In theory, this would be very achievable compared to these big things that they won't touch-Social Security, Medicare, defense. So, in theory, this is achievable. However, they are small. But, are they really so crazy? The full screens you just showed, aren't those just the way government handles small spending projects? They have to manage forest fire situations, they have to deal with the Bull Weevil and the cotton pest. That's not just burning money. That benefits farmers and future costs.

Matt McCall: I get two Starbucks a day. It's about $10. If you cut that out it's not going to really change my life. I'm not going to be rich because I cut out two Starbucks a day. But what it does is change your mentality. I think that's what we need to do here with our Congress and our entire government. They're coming in with the same mentality that we can get away with this. Sure, it's $32 billion versus the fact that we're in $15 trillion of debt. That doesn't sound like a lot. However, we must start somewhere. If we do not start here, then where do we start? So yes, cut this stuff out. This isn't going to anything constructive. We're not making any money off of this. Stop now.

Stephane Fitch: You have to look at scale-we're talking about $32 billion a year? If every single dollar of federal spending is bothersome to you, then sure, this is a terrible thing. But, this is a small amount of money. Not every pork barrel project is a terrible project. The Bush tax cuts cost a lot more than pork does. I'm sorry to be the defender of pork here, but not every pork barrel project is a bad thing. Sure, there's a bridge to nowhere here and there, but some of those projects are excellent.

CHINA SPLAPPING NEW TAXES ON U.S. IMPORTED CARS

Gary B. Smith: First, on the flip side, I think we put a tariff on the tires we import from China, so I guess this is a goose to gander kind of argument. If Donald Trump thinks this is going to stop the auto industry, then he needs to look at the auto industry. Chrysler sold 40,000 cars to China last year. If they make $1,500 a car, even if every sale to China goes away they'll lose $600,000. I hope Chrysler can sustain a $600,000 loss.

Tobin Smith: Most of GM's cars were made in China. Where was the Donald yelling when there was a 65 percent tariff on it? This 20 percent is on top of the 65 percent to 80 percent that already exists. At the margin, they've only really added about 10 percent onto their whole bill. What happens with Japanese cars? Why are the Japanese building all their cars here? Because of the dollar yen and because of the tariffs that we were charging on trucks coming in from Japan. So, we're not pure here.

Jonas Max Ferris: These tariff wars tend to escalate during weak economies. China's economy is slowing now. It's going to get uglier. We've been getting uglier. This is what happened in the depression that caused it to linger. Countries get concerned. Their exports go down and it builds and it hurts the whole global economy. It would be nice to stop the war with China. They've done as much stuff or more than we have with the support of the industry. But we are just as bad in a lot of ways with the auto industry support.

Matt McCall: I agree that any time a good is made here in the United States and a foreign country puts a tax or tariff on it, it costs more for the citizens of that country to buy the vehicle or any type of product. More costs most likely means there is going to be less demand for that product. Less demand means there's going to be less coming out of this country, which means, of course, the economy slows down in that sector. If we're talking about autos, think about China. It is the largest auto market out there right now. It's at its slowest pace this year in 13 years. Keep in mind, GM, a huge amount of their sales are from China. We saw a 20 percent growth in the month of November. If suddenly that growth is gone, you'll see GM and Ford looking for more government bailouts.

Stephane Fitch: This is such a phony, silly debate. The idea that China buys so many cars and we don't want to get cut out of that-that's the most boring car market in the world. The average Chinese car sells for about $5,000. GM and Chrysler have no business trying to make cars that sell for that kind of money. They should be focused on job one, which should be making cars that Americans want to buy. There's a lot more profit there.

NEW CEO SURVEY SPARKS WORRIES ABOUT JOB CREATION IN 2012

Gary B. Smith: Corporate profits were higher at the peak than they were in 2008. Household debt to personal income is the lowest it has been in 20 years. People have a lot of money in their pockets. Unemployment, which is really the big number, has flattened and will probably improve. The housing sector has at least flattened for now. It will probably show a little bit of improvement next year. Companies have a gigantic amount of cash on the sidelines. Everything is primed for the market and the economy to go up, not down. I do agree that we may be limping along, but I'm a lot more optimistic.

Tobin Smith: I hate to be the bearer of reality here, but the idea that thing is percolating greatly is insane. People think we're going to have a 5 percent GDP rebound. That's physically impossible because of the headwinds we have. This started with homes. This is still about homes. We still have one year of inventory once we get foreclosures out of there. Until we get to the three or four month stage, we're not there. Finally, the real evidence is looking at the hundreds of billions of dollars of stuff that was brought back after black Friday by people who came home and said "what was I thinking?" We're living on a very low-growth economy. This is going to be with us a very long time and if you don't believe that, you're kidding yourself.

Jonas Max Ferris: Things look good now, but the headwinds are bad. Right now, we are in a regime of stimulative behavior. We have really low interest rates, really low tax cuts. This is all eventually going to go away. That's going to hit us and I don't know if we can handle it. I don't know if we can handle losing all these tax breaks in a year or two on top of rates not being so favorable. It could be trouble.

Matt McCall: We are still historically high, but just this week the weekly jobless claims came in and we're at the best level we've seen in three years. I think we are making strides. The GDP growth estimates about 2 to 2.5 percent next year. That's not a recession. A recession is when the number turns negative. Global growth is from about 4.5 percent to 5 percent estimates right now. It's not great, but we're chugging along. We're coming out of one of the worst recessions that we've seen in decades. This is not that bad.

Stephane Fitch: The rebound has been going for two years. Yes, it's been a little weak. Housing has been a headwind. I think we're doing fine. I think we're a little spoiled because we had the Clinton '90s and we think of that now as normal. That's wrong. 2 percent or 3 percent is normal.

PREDICTIONS

Gary B. Smith: Fed Ex is up 30 percent by June

Tobin Smith: EA Sports up 30 percent by next December

Jonas Max Ferris: iShares FTSE Nareit Resid Plus CP Idx up builds up 15 percent in one year

Matt McCall: Heckmann Corporation has a 50 percent gain in one year