Rewarding Bad Behavior

1. With the recent unveiling of the Obama administration's housing plan there is a growing concern that the government is promoting policies that reward bad behavior and punish good behavior. The housing plan is the latest policy where the government gives money to those who are in over there head. This is a somewhat more palatable policy than preceding bailouts as it focusses on helping the individual with mortgage problems. However, it is following a string of policies that that basically says 'if you screw up, the government is here to give you money.' Businesses and individuals that pay their bills and taxes on time are subsidizing those who don't. The housing plan isn't completely without merit, but this trend of government bailouts big and small is wearing on many as can be seen in this CNBC clip of Rick Santelli becoming fed up with the government rewards for bad behavior on the floor of the Chicago Stock Exchange...

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Punishing Good Behavior

Republican Challenges Troubled Stimulus Plan

Republican Senators put together an alternative stimulus package that has a much lower price tag than the current version of the stimulus bill, as the AP reports that the current plan tops $900 billion. The Republican alternative allows home owners to refinance their home mortgages at a low interest rate that will help the home owner and help stabilize home prices in general. This plan also provides more money for infrastructure projects than the current bill and cuts the payroll tax and the corporate tax to encourage economic growth and job creation. Also, it requires spending cuts once the economy has rebounded helping to limit the amount of future government debt. CNN reports not only that their is a this second bill, but moderates are also working on the current bill trimming the excess pork...

Some Republicans want to take it a step farther than their party's leaders. Ten Republican senators, including Sen. John McCain, want more funds -- almost $90 billion -- for infrastructure. They are shopping around a plan with a price tag of just under $500 billion.

"We can either fight the Democrat proposals, which would increase the deficit incredibly and mortgage our children's futures and not beneficially stimulate our economy, which we will do, in many respects. But we have to have a proposal of our own," said McCain, R-Arizona.

That version of the stimulus measure, put together by Florida Sen. Mel Martinez, is broader than the one proposed by GOP leadership, but narrower than the Democratic bill.

The group of Republicans met Tuesday to discuss their plan because they don't believe their leadership's approach, focusing exclusively on the housing crisis and tax cuts, is enough to jump-start the economy.

Another alternative that's getting a lot of attention is a bipartisan plan from Nebraska Democrat Ben Nelson and Maine Republican Susan Collins. The two moderate senators are looking at the current economic stimulus package and trying to scrub it of all spending that they say will not stimulate the economy.

One attempt to trim pork from the current bill was successful. An amendment passed sponsored by Tom Coburn that eliminated a $246 million dollar tax break for Hollywood movie companies.

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Senator McCain has sponsored a petition protesting the current version of the stimulus bill...

Sign Vote No On The Stimulus Package Petition

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Republican Senators Put Together Alternative Stimulus Package

Democrats Discuss Taking Over People's 401K's

If you don't think an Obama, Pelosi, Reid run government would result in a dramatic swing to the left, read US News and World Reports article on congress' discussion of takng over people's 401K's. 401K's are not 'rich people' savings plans they are middle America's retirement and savings plans, and Dems are looking to make them into 'government created' accounts. Would Obama, Dems Kill 401(k) Plans?

I hate to use the "S" word, but the American government would never do something as, well, socialist as seize private pension funds, right? This is exactly what cash-strapped Argentina just did in the name of protecting workers' retirement accounts (Efharisto, Fausta's Blog). Now, even Uncle Sam isn't that stupid, but some Democrats might try something almost as loopy: kill 401(k) plans.

House Democrats recently invited Teresa Ghilarducci, a professor at the New School of Social Research, to testify before a subcommittee on her idea to eliminate the preferential tax treatment of the popular retirement plans. In place of 401(k) plans, she would have workers transfer their dough into government-created "guaranteed retirement accounts" for every worker. The government would deposit $600 (inflation indexed) every year into the GRAs. Each worker would also have to save 5 percent of pay into the accounts, to which the government would pay a measly 3 percent return. Rep. Jim McDermott, a Democrat from Washington and chairman of the House Ways and Means Committee's Subcommittee on Income Security and Family Support, said that since "the savings rate isn't going up for the investment of $80 billion [in 401(k) tax breaks], we have to start to think about whether or not we want to continue to invest that $80 billion for a policy that's not generating what we now say it should."

Hat Tip to Smart Girl Politics original article Kiss Your 401k Goodbye!

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Democrats Discuss Taking Over People's 401K's