Analysis from the Associated Press yesterday shows that the housing market is actually being negatively affected by stimulus spending geared toward doing the opposite: revitalizing the housing market.
The AP reports:
NEW YORK (AP) – The Federal Reserve announced a $1.2 trillion plan three months ago designed to push down mortgage rates and breathe life into the housing market.
But this and other big government spending programs are turning out to have the opposite effect. Rates for mortgages and U.S. Treasury debt are now marching higher as nervous bond investors fret about a resurgence of inflation.
That’s the Catch-22 threatening to make an awful housing market potentially worse and keep the economy stuck in a funk. Kick-starting the economy requires higher spending, but rising rates mean fewer Americans will be able to refinance their home loans. And some potential buyers will be shut out of the market by higher monthly payments they won’t be able to afford.
Many of us warned of these types of scenarios since government programs, more often than not, end up producing the exact opposite results of what was intended.
Fed Chairman Ben Bernanke acknowledged Wednesday in congressional testimony that large budget deficits could threaten financial stability by eventually eroding investor confidence and endangering the economy’s prospects for long-term health.
“Even as we take steps to address the recession and threats to financial stability, maintaining the confidence of the financial markets requires that we, as a nation, begin planning now for the restoration of fiscal balance,” Bernanke told the House Budget Committee.
That kind of talk is meant to calm bond investors’ nerves. It also shows the quandary faced by Bernanke and other federal officials. They need to hold down interest rates through massive government spending at the same time they have to deal with worries over how that spending could damage the economy over the long term.
This is all because “stimulus” spending is wrecking the economy and producing false markets and false results. The government’s attempt to alter the free market always fails, and this is proof.
On the same topic of stimulus dollars specifically not working, President Obama has now vowed to increase stimulus spending:
WASHINGTON (AP) – President Barack Obama assured the nation his recovery plan was on track Monday, scrambling to calm Americans unnerved by unemployment rates still persistently rising nearly four months after he signed the biggest economic stimulus in history.
Obama admitted his own dissatisfaction with the progress but said his administration would ramp up stimulus spending in the coming months. The White House acknowledged it has spent only $44 billion, or 5 percent, of the $787 billion stimulus, but that total has always been expected to rise sharply this summer.
“Now we’re in a position to really accelerate,” Obama said.
He also repeated an earlier promise to create or save 600,000 jobs by the end of the summer.
Neither the acceleration nor the jobs goal are new. Both represent a White House repackaging of promises and projects to blunt criticism that the effects haven’t been worth the historic price tag. And the job estimate is so murky, it can never be verified.
The economy has shed 1.6 million jobs since the stimulus measure was signed in February, far overshadowing White House announcements estimating the effort has saved 150,000 jobs. Public opinion of Obama’s handling of the economy has declined along with the jobs data.
The term “create or save jobs” is a complete fabrication meant to sound as if the stimulus is working. The government does not record data on “saved” jobs nor that can that even possibly be calculated. This is a term created by the Obama White House as a cover for the jobs they will never create. It is a smokescreen and many brain-damaged people are buying it without question, including the White House Press Corp.
Furthermore, public opinion of how Obama is handling the economy has declined. People are now waiting for some minuscule shred of promised results and there are none to be seen, heard of or demonstrated. Instead we have public ownership of private corporations and promises of new taxes to pay off President Obama’s massive deficits.
I guess that explains this news from Rasmussen:
Voters now trust Republicans more than Democrats on six out of 10 key issues, including the top issue of the economy.
The latest Rasmussen Reports national telephone survey finds that 45% now trust the GOP more to handle economic issues, while 39% trust Democrats more.
This is the first time in over two years of polling that the GOP has held the advantage on this issue. The parties were close in May, with the Democrats holding a modest 44% to 43% edge. The latest survey was taken just after General Motors announced it was going into bankruptcy as part of a deal brokered by the Obama administration that gives the government majority ownership of the failing automaker.
Voters not affiliated with either party now trust the GOP more to handle economic issues by a two-to-one margin.
Separate Rasmussen tracking shows that the economy remains the top issue among voters in terms of importance.
Republicans also now hold a six-point lead on the issue of government ethics and corruption, the second most important issue to all voters and the top issue among unaffiliated voters. That shows a large shift from May, when Democrats held an 11-point lead on the issue.
For the eighth straight month, Republicans lead on national security. The GOP now holds a 51% to 36% lead on the issue, up from a seven-point lead in May. They also lead on the war in Iraq 45% to 37%, after leading by just two points in May and trailing the Democrats in April.
Fewer voters see national security as a very important issue this month, but confidence that the United States and its allies are winning the War on Terror is at its highest level since February.
Republicans lead the Democrats on immigration for the third straight month, pulling ahead to a 35% to 29% advantage on the issue.
On taxes, the GOP leads the Democrats for the fifth straight month, 44% to 39%. In May and April, Republicans held six-point leads on the issue.
Democrats continue to hold the lead on the issues of health care, Social Security and education. While Democrats have a 10-point advantage on health care, that’s down from the 18-point lead the party had a month ago.
Not surprising in the least as more and more of President Obama’s promises are discovered to be empty. Public opinion sways often, however, the trends being set now seem to be holding and I’m glad to see it.
The economy, especially in the 2008 election, was an issue the Democrats always out-polled Republicans on. To see this type of change simply shows that Americans are beginning to question the blatantly socialist polices being instituted by the Obama administration.
On the issue of health care, the drop in support isn’t surprising either since more details leak about how you will be forced by the government onto “acceptable” care and millions will be forced off their private insurance as a result.
The only explanation for the shift in public trust must come from President Obama’s policies, not his personal approval ratings. People think he’s a nice guy though they are starting to question whether they agree with his vision for a socialist, government-dependent nation.