You’ve been screwed

In polite company using the slang phrase “You got screwed” may be a regarded as unseemly, perhaps even rude. Among friends though, everyone understands the phrase means that you got bilked or cheated. The sad fact is that we’ve all been screwed by government programs that were designed ostensibly to help us. A perfect example is the most recent recession which was caused by government programs that were supposed to help us. Instead of helping, federal housing programs forced institutions to make bad loans, created massive housing inflation by inflating the credit market which was followed by a bust that still has many underwater on their mortgages. President Obama’s first term is full of programs that hurt far more than they help, funded by borrowed money. Here is a a short list of programs, what their end result was, and who got screwed.


 

The Program: Auto Industry Bailout
The Result: Designed to help the car industry the bailout superseded the normal, well established bankruptcy procedure and replaced it with a highly politicized plan that rewarded political allies. The plan forced investors to take massive losses, while giving large chunk of the car companies to directly to unions. It also made union member’s pension and healthcare plans whole while drastically cutting non union delphi employee benefits. Decisions were made to favor political allies, not to bolster the business of a failing US auto maker. To add insult to injury, most experts predict GM will be back in bankruptcy by 2016. The true cost to the American tax payer won’t be fully known until the government sells its GM stock. 
Who got screwed: GM and Chrysler investors and stock holders, the rule of law, non union auto workers.

 

The Program: Fast & Furious
The Result: In a claimed attempt to curb illegal guns going to Mexican Cartel members, the ATF allowed thousands of guns to go into Mexico with no way to track them. The ATF never informed their Mexican counter parts about the firearms and even overrode local field officials that begged their superiors to allow them to arrest gun walkers. The firearms that the ATF deliberately allowed to flow into the hands of criminals have shown up at the scene of hundreds of violent crimes in Mexico and killed US Border Patrol Agent Brian TerryPresident Obama asserted executive privilege to block the release of documents on the program to the House oversight committee which was investigating the program.
Who got screwed: Poor Mexicans living in the unmarked border areas between rival Mexican gangs all across Mexico. Americans living along the porous border with our southern neighbor & the men and women that work there for the border patrol.

 

The Program: Cash For Clunkers
The Result: Designed as a 3 billion dollar gift to the US auto industry, the program ended up paying 24,000 for each vehicle sold, and had little impact on new car purchases. Besides costing a ton of money the program destroyed and removed from the used car market thousands of cars driving up used car prices. The average increase for a used car was more than 10%, but because of the number of largish SUVs that were traded in, the market for used SUV’s and full sized trucks rose 30%.  On the coasts among the green elite these vehicles are known as “gas guzzlers”, for the rest of America, the same vehicles are known as the work truck.
Who got screwed: The poor, especially the working and rural poor in need of basic transportation. All hard working Americans and businesses that needed affordable used cars and trucks.

 

The Program: The Federal Takeover of Student Loan Guarantee Program
The Result: Designed to help more students afford college, the federally guaranteed loan program has helped fuel education inflation rate which is running 498% (no that isn’t a typo) since 1986. That inflation rate is outpacing the consumer price index, healthcare prices, and even such highly volatile commodities like gasoline. Much like other federal programs, pouring money into the market place has driven prices up and helps account for the huge debt that students graduate college with. Sadly some of the increase in costs has to do with increased back office staff required by federal government dictates helping create a vicious cycle. More money is required in tuition to support more staff to get more money. Is it any wonder students graduate with more than 25,000 dollars in debt?
Who got screwed: Students and the people that pay for their education.

The Program: Patient Protection and Affordable Care Act (ObamaCare)
The Result: In an effort to help the 15% of US citizens that were uninsured the Obama administration gave us a monstrous healthcare bill that makes 100% of us pay. Unlike the promises, the program will cost over a trillion dollars and puts into law some of the most perverse economic incentives imaginable. The law provides incentives for employees to drop coverage (up to 20 million by CBO estimates), incentives for business to drop the number full time workers, and punishes medical innovators. The increased complexity and coverage required is costing consumers through increased costs for all healthcare insurance and in 2018 the law adds a 40% tax to “gold plated” healthcare benefits. One of the other perverse incentives is that the ‘free contraceptives for women’ clause has sucked the dollars out of research into advanced oral contraception for women (Popular birth control advances like Seasonale would never have been invented if this law went into affect earlier).
Who got screwed: Everyone that purchases or uses the US healthcare system. It hurts the working poor and Senior medicaide recipients the most.


 

These are but 5 examples that come from thousands of pages of legislation that have been passed during President Obama’s first term. An underlying problem with Obama’s programs is that the people dreaming them up them have little or no experience with a functioning marketplace. The administration has proven that it has no respect for the unintended consequences of government interference. The same administration has proven that it doesn’t care how much debt the government takes on. President Obama’s total disregard for fiscal responsibility has brought us a national debt that is now more than 16 trillion dollars! That’s more than 51,000 for every person that lives in the United States.

 

You’ve been screwed.

 

 Is it any wonder that voters are breaking for Mitt Romney, a man that understands how the economy works, how markets work, and actually has a plan for our nation’s future?

 

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