2008 State of the Union

I know, I know. I'm a total slacker and the speech was made a week ago. Hey, better late than never, right? Right. First of all, the links:

State of the Union 2008
Bush's Proposed Budget

The first link is a transcript of Bush's seventh and FINAL (hooray!) SOTU address. I actually watched it this year (well, most of it anyway. He lost me when he started talking about Iraq--I tried to stay engaged, but I just couldn't. So I switched to Scrubs). The second link is an article about the budget he proposed today. More on that later. First and foremost, the speech.

I'm not all that sure why I had the intense urge to watch the SOTU address this year. I certainly have never had the inclination before. I think that I was so inclined because it was his last SOTU address, so I was interested to see what exactly he would say to wrap up his presidency. Some of the things he said I agreed with, some of them I flat out disagreed with, and others made me wonder if he's living in denial (sometimes I wonder if we even live in the same country). Mostly, though, I was skeptical.

One of the other reasons that I wanted to watch the speech was because of the current state of our economy. Days before, the major market indicators had all dropped to 10-month lows. The Federal Reserve had decided to drop the rate 0.75% in between normal sessions (which hasn't happened since 1990, apparently). And, an "Economic Stimulus" plan had been proposed. This is what interested me the most. I wanted to know how the $150 Billion stimulus was going to be funded.

President Bush got to the economy pretty quickly, thankfully. He urged the Congress to keep his previous tax breaks effective, saying that raising taxes would be even harder on American families. While I completely agree that rebuking the tax breaks would probably be hard on many people (the middle class like me would be hit the worst, no doubt), how else is he going to pay for everything? When Bush came into the Presidency seven years ago there was a budget surplus that was supposed to have lasted for years. Now, a relatively short time later, we have a deficit of several hundreds of billions of dollars.

This debt is seriously hurting our economy. The dollar is as weak as it’s ever been (which is really bad news for those of us who are going to Europe this year) because the US has all but lost its financial credibility. All we do is borrow money from other countries like Japan and China, which in turn makes their economies stronger while making ours all the weaker. Not cool, Bush. Not cool.

To add to that, the credit crisis is far from over. These banks, these unbelievably stupid banks, are now reaping what they've been sowing for the last three years. There is a reason we have credit scores, people. There is a reason why you should not make big loans to people who have bad credit. Isn't that the point? Of course, don't get me wrong, there are plenty of people out there that have bad credit due to divorce and identity theft and what not. Those people are not the problem. The problem lies with people who have bad credit and know they have bad credit, and the banks who knowingly loaned thousands upon thousands of dollars to these high-risk people. And, not only did they make the loans in the first place, but they all but tricked these people in to adjustable rate mortgages--the dreaded ARM.

So these things, among others, are leading the country into (or have led us into, in my opinion) an economic recession. There. I said it. I think we are already in a recession, kids. We're there. Of course, the actual data proving this hypothesis won't come out for several months, but I'm going to say it anyway. So, an "Economic Stimulus" package was proposed by Nancy Pelosi and other members of Congress, and Bush urged the rest of Congress to pass it as soon as possible. This package includes rebates of $600 per person, or $1,200 per married couple and up to $300 per dependent child, if you made under a certain income level in 2007.

Now, don't get me wrong, I love it when the Government gives me free money. Who doesn't? But in all honesty, I think the economy would benefit much more if Bush and Congress made more of an effort to get Government spending in check. Bush said in the SOTU that he'd be proposing a budget that cut over 150 "wasteful or bloated programs" that should come up with $18 million dollars. He also verbally backhanded Congress for not cutting down on their sneaky little earmarks. I 100% agree with him there. Earmarks are stupid and unnecessary, and I think that the people in the committees that come up with these proposals should be individually fined each time an earmark comes up.

Which brings us to Bush's proposed budget for fiscal year 2009, which starts in October 2008. The Yahoo! article gives a pretty general overview of what he's trying to accomplish. In the SOTU address, Bush mentioned that his budget would produce a surplus by 2012, and he's sticking with that argument in this proposal. Personally, I think it's crap. First of all, he's asking for a total spending allowance of $3.1 TRILLION dollars. Not billion, TRILLION. And not just one single trillion. Three trillions. But, he's cutting costs by not printing out the plan and distributing it to Congress the old fashioned way. He's being "innovative" by doing it digitally (honestly? Is anything still done on paper?).

WHERE IS THIS MONEY COMING FROM??? Seriously. He's not raising taxes, and we're already in debt up to our eyeballs, so there is no available cash to pay for all of this. Am I the only one who sees the problem with that? No wonder the US has a negative rate of savings. Someone recently told me that Government is essentially a reflection of its people. I think it works both ways. The Government spends money without thought of the consequence, and the people spend without thought of the consequence, and it's a vicious cycle of debt on both the personal and the national levels. I don't like it. I don't like where its heading. I don't like where its taking us as a nation.

Hopefully, and I say this with all the sincerity I posses, the next President is able to fix the CF of a financial situation that the country is in. I won't even care if it's a Republican, as long as the problem gets fixed for reals (though I don't think that a Republican will be inclined to cut down on the war spending, which is the bulk of the problem).