Tampa Tea Party Blog
Washington Post: “President Obama’s Phony Accounting on the Auto Industry Bailout” “One of the Most Misleading Collections of Assertions”

I thought I was done with posts about politicians’ difficulty with numbers for one day… And then I see Washington Post’s fact checker chimes in with this headline: President Obama’s phony accounting on the auto industry bailout. Desperation setting in?

We take no view on whether the administration’s efforts on behalf of the automobile industry were a good or bad thing; that’s a matter for the editorial pages and eventually the historians. But we are interested in the facts the president cited to make his case.

What we found is one of the most misleading collections of assertions we have seen in a short presidential speech. Virtually every claim by the president regarding the auto industry needs an asterisk, just like the fine print in that too-good-to-be-true car loan.

In awarding President Obama 3 Pinocchios for his auto industry speech, the Washington Post leaves with this:

The president is straining too hard. If the auto industry bailout is really a success, there should be no need to resort to trumped-up rhetoric and phony accounting to make your case. Let the facts speak for themselves.

Read the link for the full breakdown of the whoppers Obama told or check out here for Ed Morrisey’s summation.

Graph: Latest unemployment figures added to the famous graph that shows official unemployment numbers plotted alongside what the Obama administration said would happen with and without his nearly $1 Trillion Keynesian “Spendulus” experiment.

Graph: Latest unemployment figures added to the famous graph that shows official unemployment numbers plotted alongside what the Obama administration said would happen with and without his nearly $1 Trillion Keynesian “Spendulus” experiment.

Total Unfunded Federal Obligations: $61.6 Trillion

USA Today looks past the oft used current debt figure ($14 trillion) to look at the complete picture including all unfunded federal liabilities: What it found is not pretty.

Corporations would be required to count these new liabilities when they are taken on — and report a big loss to shareholders. Unlike businesses, however, Congress postpones recording spending commitments until it writes a check.

The $61.6 trillion in unfunded obligations amounts to $534,000 per household.


USA TODAY has calculated federal finances based on standard accounting rules since 2004 using data from the Medicare and Social Security annual reports and the little-known audited financial report of the federal government.

Got to love ideologues who can brush off the enormity of $61.6 Trillion:

Michael Lind, policy director at the liberal New America Foundation’s economic growth program, says there is no near-term crisis for federal retirement programs and that economic growth will make these programs more affordable.

"The false claim that Social Security and Medicare are about to bankrupt the United States has been repeated for decades by conservatives and libertarians who pretend that their ideological opposition to these successful and cost-effective programs is based on worries about the deficit," he says.

CBO: True cost of Fannie/Freddie bailout more than 2x Obama claim

A new Congressional Budget Office report says taxpayers are on the hook for Fannie Mae and Freddie Mac at over twice the amount the Obama administration claims. The Obama administration counts only the $130 billion in cash paid to bail out the two government sponsored enterprises (GSE’s) while ignoring “the cost of the federal government guaranteeing the loans bought and securitized by the GSEs.” The CBO says the total is really closer to $317 billion.

In a report delivered to the House Budget Committee on June 2, the CBO said a “fair value” accounting of guaranteeing the two defunct mortgage companies – known as Government Sponsored Enterprises (GSEs) – was more than twice as high as the Office of Management and Budget had accounted for.

The total of those cash payments is $130 billion, and is normally reported as the cost of the bailout of the GSEs to date. However, the CBO said that merely counting the cash payments, and not the cost of federal subsidies granted to the GSEs, obscures their real costs.

Essentially, the CBO is accounting for the cost of the federal government guaranteeing the loans bought and securitized by the GSEs.

Say again?

The GSEs have a fair-value deficit between assets and liabilities that total to $187 billion. Combined with the $130 billion in cash infusions given by the federal government to Fannie and Freddie, the taxpayer is on the hook now for $317 billion. The CBO predicts that the liability will increase each year by slightly more than $4 billion over the next ten years as well.

Taxpayers might have to eat it all in the near term in order to shed the liabilities. If Congress gets around to ending the government guarantees for Fannie and Freddie, it will almost certainly have to resolve the deficit. That is why the CBO calculation is so important, and likely why Congress and the White House avoided addressing the issue in 2009 and 2010.

The government-sanctioned monopolies that securitize the majority of all mortgages in the U.S. are among the major players in the real estate collapse and the subsequent recession. As political instruments, politicians over the years made demands of these GSE’s to securitize more and more loans and ones that were riskier and riskier — eventually under the Clinton administration demanding more risky, subprime loans.

And when that risk is realized, who’s on the hook? The people who agreed to take on the risk? The politicians who built the system? Of, course not. Us taxpayers are the ones to pay the bill.

If these GSE’s weren’t too big to fail — ie, if they weren’t government sanctioned monopolies — they a) would be more difficult to become political play things and b) could fail and other enterprises could move into their place. Instead, as blunt political tools (and ones that give generously to the very political candidates who oversee them [Obama, Dodd, Frank, R’s too…]) they remain instruments of social engineering that we taxpayers must prop up when they and their political cronies fail.

Fannie / Freddie are the poster children for why governments should not play puppet masters in the marketplace.

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Whoops: Rail cost estimates already exceeding initial projection

As predicted, cost projections were a bit too rosy. The real cost, says Hillsbororough Area Regional Transit officials, will be much higher.

NoTaxForTracks.com has continuously pointed to the huge costs and record of cost overruns associated with rail projects and already the evidence with this rail tax is in: (From the St Pete Times today:)

Projections by the county’s Metropolitan Planning Organization put the construction costs for a new light rail system — the figure commissioners considered — at $70 million per mile.

Now, Hilllsborough Area Regional Transit officials say the cost likely will be $85 million to $120 million per mile, based on an analysis issued two weeks ago that doesn’t consider inflation.

"I think that’s a consistent pattern and it’s occurred in city after city," said Martin Wachs, who supervises transportation research at Rand Corp., a nonpartisan, nonprofit think tank.

Past history is a much better indication of reality than the rosy, overly optimistic assumptions and predictions from those who are in support of this initiative.

Phoenix:  Mayor told voters cost would be $500 million, actual cost is $1.4 Billion and with $240 million deficit to close added a 2% tax on food and groceries in April, a portion of that money to keep rail operating (after cutting bus and rail svcs) Also, University of Phoenix bought tens of thousands of passes and free rides are given to students who pay for them thru their tuition (many paid for by parents or tax subsidized loans or grants).  Those “free” rides are included in their ridership numbers.
Phoenix is rated one of the 15 most bankrupted cities according to BusinessInsider.com:  http://www.businessinsider.com/americas-most-bankrupt-cities-2010-4

Charlotte:  Charlotte had cost overruns of over 100%, first leg cost $48 million per mile, to build out will now cost $101 million per mile and they have raised fares and delayed build out they promised voters due to declining revenues. Regarding their transit oriented development, Charlotte  taxpayers subsidize the rail, subsidized the developers and subsidized some of the residents to entice them to move into high density housing by waiving their property taxes for 5 or more years. And their rail ridership includes 4000 previous bus riders who simply moved over to higher taxpayer subsidized rail.

Stop the Boondoggle BEFORE it starts!


Florida Voter Guide

Have you settled on your vote for senator, governor, or attorney general? What about judges? Do you know how judges ruled on ObamaCare? Or know the ins and outs of all the amendments? Check out this Florida Voter Guide.

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