I Love the Smithsonian but.....

I’ve talked about this before, but why are we putting taxpayer money into the Smithsonian? Why is that stimulus? OK, sure you can argue it would spur some business activity in the nation’s capitol, but it just seems to me that we continue to  ignore the problem of housing.   I compared the House plan to the Senate plan, and I have to say I agree with some of the Senate proposals when it comes to tax cuts for businesses.  The thinking is if a business can go back and claim a refund from previous tax years paid because operating losses are currently negative they will use that capital to invest, develop, and hire.

I understand the thinking but my fear is that businesses will not do this.  They do not have a crystal ball and if you are uncertain of your future, why would you create jobs or spend money on development?  Small businesses are the backbone of the economy (I sound like a politician, yikes) but it’s true.  That is where job growth primarily comes from and they are a huge hunk of GDP.

Back to housing for a moment.  If we continue to borrow and increase the federal deficit, and thus weaken the dollar and issue new government securities, it’s not going to matter if Fannie and Freddie guarantee mortgages at 4%.  The bonds tied to mortgage rates are going to have the exact opposite effect on rates, and the guarantee will be worthless:  rates will go higher no matter what.

My solution?  Start cutting the fat from the bills.  At least I’m ending this blog not sounding like a politician, because I feel my argument is going into a black void:  this thing passes upwards of a trillion dollars.

CC