Obama: Put More People on Welfare!

by Gerri Willis

The Obama Administration has a one-size-fits-all solution for our nation's problems: put more people on welfare!

We've just seen moves like running radio soap operas to encourage people to sign up for food stamps and claiming the right to waive welfare's work requirements.

But that's just the tip of the iceberg!

The federal government actually runs 126 separate anti-poverty programs. They're managed by 13 different agencies.

We use the word "welfare" to describe money that goes to needy people. But the government's war on poverty is a whole lot bigger. And it's rife with waste and redundancy.

The federal government runs 33 different housing programs: 21 programs to provide food, eight healthcare programs, 27 cash or general assistance programs. It's hard to find a government department that doesn't run an anti-poverty program. All this adds up -- and this is just the federal government.

If you also include state and local spending, the government will spend nearly a trillion dollars this year fighting poverty. That's almost the size of the national deficit this year.

Now let me be clear, I don't object to poor people getting help. My problem is a government throwing money at programs that clearly aren't working. Consider this: All this welfare spending adds up to $20,610 for every poor man, woman and child in the country.

For a poor family of three, that's nearly $62,000 dollars. The poverty line for that family is just $18,500. With this kind of spending, poverty should be wiped out - instead it's growing.

Today, one in seven Americans is living in poverty. The most in almost two decades. All the while spending is soaring.

And, welfare spending for the last four decades -- adjusted for inflation? Up, up, up. How can we spend all this money, and see so little progress?

Instead of pushing this line higher and higher, and expanding the welfare state, we should be stopping the taxes and bloated regulations that hold back economic growth and job creation. People need work, not handouts.

Unfortunately the only solution the president sees is throwing more money at the problem. More government, instead of less. More dependency instead of empowerment.

Instead of going forward, we're going in circles.

What My First Job Taught Me

by Gerri Willis

I didn't start out wanting to be a business reporter or a commentator on personal finance. Not by a long shot - I wanted to cover politics. And, like a lot of grads today - I hit the job market at a terrible time. A deep recession hit this country in the early 1980s, and in 1981, I was happy to even land a job.

I went to work for a small daily newspaper called The Lima News in Lima, Ohio, which at the time had a population of about 50,000 and a Ford plant. My beat was City Hall - I spent endless hours covering City Hall meetings. I was happy as a clam. But then a funny thing happened.

The local Ford plant began laying off people lots of people. And the layoff packages back then, well, they weren't as good as they are now. After several months, folks started forming informal bartering arrangements, trading toilet paper for light bulbs. The effects began to ripple: Other businesses that were reliant on Ford employee spending had to lay off people as well.

It was horrible to watch. I wrote stories about how people were coping with the situation. And about how the mayor and the city council of that town tried to resurrect their economy -- and lure new business. They set up special economic development zones and romanced scores of corporations. But nothing really worked.

And so, at a fairly young age I learned something fundamentally important: that the private sector - business, not government - had the real power to make a difference in people's lives - to send the kids to school with a full lunch pail - to put food on the table - to provide.

I don't think a lot of Americans have that confidence in companies and the private sector right now - and that's what I worry about.

They think the government can fill the gap ... and it can't.

The government doesn't have the money or the know how to create wealth - it can only disperse other people's money. Today, a lot of people believe that the private sector - companies and businesses - are the problem - that they monopolize the money.

More than three-quarters of people surveyed in a WSJ poll said the nation's economic structure is out of balance and favors the rich over the rest of the country.

For that reason, we need to painstakingly rebuild our faith in the power of the country's private sector. Because it's companies that will hire the jobless, companies that will expand payrolls, and companies that will seed the growth of this economy.

Today Lima is in better shape. It's diversified its economy and grown. It's doing better. And, the rest of us can, too.

Taxpayers Still Footing TARP Bailout Bill

by Gerri Willis

Robert Miller, Chairman of the board of directors at AIG, takes part in the panel discussion "Lessons From the Great Recession: How Businesses Survived and Now Look to Thrive." Taxpayers are getting some payback on their bailout of one of the world's biggest insurance companies: AIG.

It's a drop in the bucket compared to all the money that was sent out the door through the Troubled Asset Relief Program (TARP), but still, American International Group is repaying $972 million to the U.S. treasury this week.

That brings AIG's outstanding balance from the 2008 bailout down to roughly $68 billion. That's out of the $182 billion ploughed into the company at the height of the financial crisis.

The government still owns 77 percent of AIG's common stock - and don't expect it to sell any time soon. Because AIG stock has lost nearly half of its value this year - the expectation is those stock sales will not resume until shares go back up again.

So you're still out $68 billion bucks from AIG. Unfortunately the insurance giant is one of many that still owe Uncle Sam from their bailout deals.

According to the watchdog website Propublica - of the more than $580 billion spent so far, less than $278 billion has been paid back.

The biggest culprits are of course Fannie Mae and Freddie Mac. The mortgage twins have pocketed nearly $170 billion since 2008. The government has only recovered $28 billion.

The automakers also got huge handouts - with the exception of Ford. GM, which ended up in bankruptcy despite it's $80 billion bailout, has paid back about a half of its money.

The government wrote off over a billion dollars in the Chrysler bailout. And while the big banks have paid back on TARP - some smaller financial companies are still in the red.

Ally Financial - an arm of General Motors - has returned about a quarter of its $16 billion dollar handout. And Regions - has barely put a dent in the money it was given!

It's been nearly three years and companies are still not fulfilling their end of the bailout bargain and the taxpayers are the ones paying the price! As usual!

As is the case with the bungled stimulus money, more strings needed to be attached to such gifts - and much more follow-up conducted.

This isn't Monopoly money the White House and Congress can spend at will. They're playing with our hard-earned money. I watch where I invest, and so should they!

A Complete Waste of $1.2 Billion? (It's YOUR Money!)

by Gerri Willis

Solar panels sit on the roof of SunPower Corporation in Richmond, California March 18, 2010You've heard me talk about the ridiculous loan guarantee program at the Department of Energy before - and goodness knows if ever there was a waste of taxpayer money it was the half a billion dollars we gave to a solar power company called Solyndra that then went belly up.

But wait: It gets worse.

Thanks to that "loan guarantee program" - another California solar company is getting more than twice that amount!

SunPower manufactures solar panels, tiles, and even builds ranches. And just before the program expired last month - it got a sweet $1.2 billion in taxpayer money!

So what are they going to do with this money?

The Department of Energy says it will create 350 temporary construction jobs. And 15 permanent jobs!

$1.2 billion for 15 jobs. Let's do the math again - since this Administration apparently doesn't: That comes out to $80 million dollars per job! The company will also be opening up another plant that will surely bring in more jobs. So where is that plant going to be? Mexicali, Mexico!

Taxpayers are giving this company money to help boost the Mexican job market.

How did they even qualify for such a big loan?

Well turns out, it pays to have friends in high places - and what's higher than the halls of Congress?

Democratic California Congressman George Miller has been on the Hill since 1975. He's a big fan of SunPower - which apparently converted an old plant into a major manufacturing facility in Miller's district. His son also happens to work for the company as a lobbyist!

And Miller's not the only fan. SunPower Pac - yes, this company has its own pac - donated nearly $15,000 to democrats in the 2010 elections. The top recipients include Senate Majority Leader Harry Reid - not a bad man to have on your side! And they've already started doling out funds for 2012.

They also have a fan in Interior Secretary Ken Salazar who after visiting the company last October said, "The path to a clean energy economy starts here, in places like SunPower's research and development facility."

Now who does he sound like?

So Solyndra and SunPower are the companies of the future? Well we all know how well the whole Solyndra thing turned out. Is SunPower's future any brighter?

Not really. First of all, SunPower is facing a host of lawsuits from investors - including a class action suit - claiming the company made false statements to the public.

These lawsuits have yet to be resolved. When comparing stock charts from the last decade, SunPower hit its peak in December of 2007. $133 a share. That's when the company was worth $13 billion. Since then - it's lost 94% of its value - trading at under nine bucks.

That means today it's market cap is $800 million, just shy of its debt - of $820 million!

So let me get this straight, we gave a company with more than $820 million in debt. That's only worth 800 million dollars - $1.2 billion?! It also issued an earnings warning right after they got that government loan!

Once again the math doesn't add up with this administration.

What is it going to take for them to realize these green companies are not the job creators they make them out to be- they're not the wave of the future - they're barely staying afloat!

If you want to help them out so much - you buy stock, you invest...

But this Administration needs to stop picking winners and losers and using our money to do it!

The Dangers of Government Handouts

by Gerri Willis

The trouble with government handouts is that once you get hooked on the free money - it's really hard to give it up.

And it doesn't matter what kind of entitlement you're getting -- just this week, for example, we learned that the executives at Solyndra applied for a second government grant after wasting half a billion dollars in federal loans.

The stereotype of somebody on the government dole is a welfare mother living in urban poverty but the reality today is that it could just as easily be a graduate of Stanford University who holds an MBA -- that's a fair description of Brian Harrison, the CEO of Solyndra.

Government dependency, it seems, is a disease that is spreading. Census data shows nearly half of U.S. households have at least one member receiving some type of government aid or benefit.

That percentage has skyrocketed over the last few decades - only about a third of American households received that kind of support back in the 1980s.

And that 48.5% is four percentage points higher than during the height of the recession in 2008! So we are more hooked on Uncle Sam now than ever.

While it's true that the population is aging and more people are receiving Social Security -- we know they are receiving benefits they've spent a lifetime paying for. But there are other ways that people get public dollars - like ObamaCare. There are also the government's stimulus programs and other benefits. So who gets what?

The average American got more than $7,400 in benefits last year. That's up from under $4,800 in 2000. And under $3,700 in 1990.

The Wall Street Journal points out: Lower income households were the largest share of recipients. More than a third of Americans lived in a home that utilized food stamps, welfare, Medicaid - and other means-tested programs.

Also, more than 14% have someone on Medicare... And nearly 16% are receiving Social Security benefits. Couple all this with record high unemployment - and you get nearly half of American households paying no federal income taxes this year!

And interestingly, the fastest growing proportion of people paying no taxes is in the middle class -- people making $75,000 to $100,000 a year - because of the burgeoning number of tax loopholes and deductions.

Look, this Administration prides itself on "looking out for the little guy" not having the government turn its back on any American in need. But when the President says he needs $447 billion for a jobs bill - somebody has to pay the price - that's us the taxpayer!

The overabundance of handouts and ridiculous spending is putting this country in need - and that could have disastrous consequences for us all.

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