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Is it stimulus or hope? 26 January, 2009

Posted by David Anderson in Uncategorized.

The Congressional Budget office reported that a significant part of the Stimulus package won’t hit the economy for more than 2 years. Some of these programs are worthy and some may be of questionable worth, but it is not the merits of the programs which I will question.

Why do we have so many regulations that urgent projects take years to start? This entire recession has been called a paper recession. We are not here because of a lack of regulation, but as a result of poor regulation.

Energy, banking, and mark to market rules were seen as problems years ago, but we were so slow to change even when we saw the problems that we were slammed.

We could see the mortgage crisis building in 2002. Changes were recommended but blocked. We saw a credit crisis and made it harder to clear debt in bankruptcy.

We saw that we needed a new energy strategy, but still have new supplies of all types tied up in needless regulation even though it is vital for our national and economic security.

The entire credit crisis could have been resolved before it brought down the economy by correcting an accounting rule brought about to simplify corporate reports after Enron. The new rule caused more problems than it solved yet the SEC didn’t feel like changing it. It artificially lowered or raised the value of assets based upon whatever they would sell for at the moment not how much income they generated or other more stable values. It made long term planning horrific. When values in housing went down, the banks no longer had capital reserves and couldn’t loan.

Now the government can’t start old projects in a timely fashion because of regulations at all levels when we most need jobs. Imagine how the private sector feels.

Sadly, we still hear liberals say that we need more regulation. It would be laughable if it weren’t hurting us so much.


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