Sunday, May 17, 2009

Obama's Personal Bailout By Taxpayers?

Debtor in Chief Obama failed to manage his own household family budget well.

Barack Obama ran his own household family budget like a stereotypical overspending, over-indebted yuppie:

It is no surprise that President Obama supports unprecedented spending and borrowing in the federal budget since he has never suffered any consequences from the excessive spending and borrowing in his private life.

And I'm not just talking about the First Lady's $540 sneakers.

A close examination of their finances shows that the Obamas were living off lines of credit along with other income for several years until 2005 . . .

This means they spent perhaps $80,000 beyond their income from 1999 to 2004. ("President Obama's troubling mantra: In debt, we trust," Richard Henry Lee, Daily News, 5/2/09)

Obama's "Home ATM": Equity Harvesting with Mortgage Equity Withrawals (MEW)

The Obamas took out so many loans that their mortgage exceeded the purchase price of their home, because they used their home as an ATM and ate their home equity via a MEW to cash in on the housing bubble to finance things like $10k in piano and dance lessons and other consumption.

The "home ATM" (MEW) was a major cause of the bubble and, after house/asset prices inevitably contracted to saner levels, the resulting underwater borrowers (owing more than house is worth), foreclosures, and economic crash.

The home ATM (MEW) accounted for 75% of GDP growth between 2003 and 2006. (Bailout Nation: How Greed and Easy Money Corrupted Wall Street and Shook the World Economy, Barry Ritholtz 2009, hat tip: Eddy Elfenbein, Seeking Alpha)

That unhealthy "growth" was overreaching people overheating your economy by overextending themselves with debt.

Obama is the type of person who CAUSED the foreclosure mess yet somehow he has been promoted to be in charge of fixing it.

A classic political platitude is to say that the government budget should be run like a household budget. If Obama runs the federal budget like he ran his own finances, we are all in deep trouble.

Obama's financial fortunes did not turn around until he became a US senator and cashed in on his new national celebrity:

But in 2005, Obama's book sales soared and the royalties poured in. Michelle explained, "It was like Jack and his magic beans."

Yes, a taxpayer-funded job can be quite a cash cow.

Maybe Obama's next economic recovery plan will make every American a senator.

It is no wonder that Obama's federal budget plans assume that money suddenly will appear out of nowhere sometime in the future and make our deficit problems vanish.

Sudden multi-millionaire Obama again cashed in (now on the presidency) with a lucrative $500,000 book deal signed only 5 days before his inauguration and took a trip to Europe to hobnob with European royalty while mocking average American workers by starting their paltry $13/week tax cut on April Fool's Day.

Ask not what your government can do for you, ask what you can do for Obama.

Taxpayer-funded tourists Barack and Michelle Obama in Europe pose with British Queen Elizabeth II.


Dedicated said...

Seems to me a couple pieces are out of place here or missing.

Not looking at parties - just thinking:

Do you really believe that Obama was the only one running for public office that spent big money in the years ahead? The big difference between him and Bush, is that Bush had family money, Obama was earning very little doing community work here in Chicago and no family cash.

The book deals - this does not come from the tax payer, this comes from book buyers. He is merely cashing in on his education and the wave of people interested in his life. Isn't that what you would do (or anyone else) if the opportunity presented itself?

If Bush could read or write, he would probably do the same thing....maybe not, he doesn't need the money. He put enough things in action, while in office to pad his future for a while.

Now if Obama was stealing(taking legally) money out of the government, like others, then we would have a beef.

Most folks, with you kids, spend big bucks on them for a better life. Obama was trying to do this, I suppose, while running a very costly campaign, that would keep him from building his income.

J at IHB and HFF said...

Hello. I remember a list claiming that many Congresspersons were formerly bankrupt or otherwise irresponsible. I do not know how many book sales were directly taxpayer-funded (public library acquisitions?) but the point was the indirect gravy train when someone wields the power and influence to give away other people's money, like Dodd and his "Friends of Angelo" sweetheart mortgage.

Thank you for raising those points.