By, Howard Rich

Sometimes it’s important to try and fathom the unfathomable.

For example, why is “thirteen” considered an unlucky number? Why do pigs continue to fly in Washington D.C. (no matter which party is in power)? And why would a nation already in the throes of unsustainable deficit spending think that it could somehow spend its way out of an economic downturn – to the tune of $13 trillion (and counting)?

That’s right – since the beginning of the current recession, the federal government has spent, lent or pledged $13 trillion on various “economic recovery” efforts.

How big is that number?

Well, if you were to spend a dollar every second, it would take 412,000 years to blow through $13 trillion.

If you were to lay 13 trillion $1 dollar bills end-to-end, you could travel to the sun and back – five times.

And if you were to put all of those $1 bills on a scale, you’d be talking about 28 million pounds – or the weight of 462 Statues of Liberty.

In a calamitous coincidence, those mind-boggling figures mirror an equally monumental sum – the $13 trillion that has been lost in the U.S. stock and housing markets since October of 2007.

As our Chinese friends would likely say, that’s an awful lot of ‘yang’ and no ‘yin.’

Worse still, even bigger numbers could be forthcoming – on both counts.

“The president and Treasury Secretary Geithner have said they will do what it takes,” Goldman Sachs CEO Lloyd Blankfein said last month. “If it is enough – that will be great. If it is not enough, they will have to do more.”

That’s certainly a convenient perspective coming from someone whose firm has been the beneficiary of multiple bailout billions, isn’t it?

In fact, with so much money flowing out of Washington these days, it’s useful to consider just how much of it is actually winding up in the pockets of U.S. taxpayers – whose sons and daughters are ultimately going to have to repay it all.

Based on the latest calculations from the “American Recovery and Reinvestment Act,” the answer is “not much.”

For example, President Barack Obama’s much bally-hoed “recovery” package is adding only $13 to the average American paycheck each week, which analysts agree isn’t going to do much of anything to increase consumption.

Numbers like that make you scratch your head and think about what “might have been.” Like what would have happened if our policymakers had taken the total value of all the bank and bureaucratic bailouts over the past 18 months and given that money directly to the people?

Assuming the current U.S. population of 306,000,000, you’d be talking about $42,483.66 pilfered from every man, woman and child in America to pay for propping up a failed financial system that is only further weakened by watering down the currency in this manner.

Think about that for a moment – that’s nearly $170,000 from every family of four. This is the debt to which they are being hopelessly shackled to, and they will never be able to pay it back.

Assuming this was tax-free income that could be invested back into the economy – the total amount would have been nearly equal to last year’s gross domestic product of $14.2 trillion.

That’s a huge chunk of change – in fact, it’s more than fifteen times the value of the cash currently circulating through the American marketplace.

If even a fifth of that cash was spent on domestic consumption, you’d be looking at an economic revival the likes of which this nation has never seen – a real “stimulus” that might actually justify all the borrowing.

But that’s not Washington’s definition of a “recovery.”

Instead of targeting the American people directly, they are pouring all of this borrowed money into failed banks and bureaucracies by the billions – with little to no oversight, accountability or transparency.

It’s “trickle-down” welfare – a colossal investment in failed institutions and a colossal failure to truly invest in the American people.

Trying to borrow ones way out of debt in any way, shape or form is insanity, but the least D.C. politicians could have done was to put the money into the pockets of the American people.

Maybe that would have “stimulated” something other than an explosion of government debt.

By, Howard Rich

With another $2 trillion in federal interventionism announced within the last week alone, the price tag for America’s economic “recovery” continues to soar to stratospheric, scarcely-comprehensible heights.

First we had hundreds of billions for troubled – now “toxic” – assets.

Then we had President Barack Obama’s $787 billion bureaucratic bailout – an unprecedented expansion of programmatic, status quo spending that will create the “Mother of All Annualizations” for dozens of cash-strapped state governments that even now still refuse to live within their means.

Next there was “quantitative easing,” which is another way of saying our federal government started printing money so that it could purchase more of its own debt.

All told, the feds have pledged $13 trillion to deal with the current recession – or trillions more than our existing national debt.

Think about that for a moment – $13 trillion.

It took several generations of Washington politicians more than six decades to rack up America’s national debt – although in fairness to the politicians of previous eras, more than a third of it was added during the last decade as Congress and the White House ran annual deficits of half-a-trillion dollars each year beginning in 2003.

Yet in spite of the fact that we were already lurching along on an unsustainable course, it has taken the current crop of Washington politicians less than a year to exceed the entire national debt as they have jumped from one taxpayer-funded “solution” to the next – all in response to a crisis largely of their own making.

Last Wednesday, in addition to announcing the purchase of $300 billion in Treasury securities, the Federal Reserve announced that it was purchasing another $750 billion in government-guaranteed mortgage-backed securities.

All together, that’s another trillion dollars into the rabbit hole – but politicians were so busy making hay over the AIG bonus scandal that they scarcely noticed the expenditure.

Basically, we are printing money to purchase “toxic” debt – a policy that began with the onset of this crisis and which has already substantially eroded the U.S. dollar.

This week, the Obama administration announced yet another $1 trillion plan aimed at “purging balance sheets” of this debt so that banks can begin lending again – which obviously ignores the fact that we’ve spent hundreds of billions to get them to do that already and they’re obviously not taking the bait.

Curiously, this latest plan is built around government “creating a market” for private sector investors to purchase these bad assets.

Wait – if these assets had value, wouldn’t there already be a market for them?

Amazingly, this inherently contradictory logic is what forms the very basis of our government’s increasingly irrational, exorbitantly expensive meddling in the American free market.

Despite our country’s founding wisdom (and the two centuries of unrivaled prosperity it produced), America’s new leaders view capitalism as a flawed, antiquated way of thinking – because after all, the myth is that the market caused this problem.

In fact, in a Wall Street Journal op-ed published earlier this week, Obama’s Treasury Secretary Timothy Geithner essentially blamed consumer debt and not enough government regulation for the housing collapse – comments which were echoed in Canada the week before by former President George W. Bush.

But just as the government decided which people would be given loans they couldn’t afford, it now decides which companies are too big to fail from the fallout.

It then decides to purchase up to 80% of some of these companies (with your money) to keep them from failing.

In addition to that, it decides how many hundreds of billions will go toward bailing out Fannie Mae and Freddie Mac – the true heart and soul of this crisis – as well the trillions it will take to clean up all of their “toxic” mortgage-backed securities.

Finally, when none of that works, the government decides how many trillions of new dollars it will print to fill in the holes.

$13 trillion later, I would humbly submit that the only holes in need of filling are the ones in the heads of people who continue to fall for this scam.

By, Howard Rich

We don’t name calendar years in America like they do in China, but if we did, it wouldn’t be hard to find a moniker for 2008.

It was “The Year of the Bailout.”

A.I.G, Bear Stearns, Chrysler, Citigroup, Fannie Mae, Freddie Mac, Morgan Stanley, Indy Mac and GM are just a few examples of taxpayer-funded benevolence this year, as our government veered wildly (and expensively) toward nationalization and rule-by-decree in attempting to resolve a crisis largely of its own making.

And while there is some confusion as to the current price tag of this growing “Bailout Mania,” we know that over the past sixteen weeks the U.S. government has poured nearly $10 trillion dollars into “correcting” the market.

You heard that right – $10 trillion dollars.

Think about that number for a moment, because it’s a lot larger than the $700 billion financial services bailout George Bush signed on October 3, which effectively marked the end of capitalism as we know it in this country.

That so-called “Emergency Economic Stabilization” is the bailout most Americans are familiar with, including the $17.8 billion chunk of it that was awarded to Detroit automakers.

But what about the rest of the money?

What about the $2 trillion in FDIC assurances, $1.75 trillion in Federal Reserve commercial paper purchases, $900 billion in term auction facility lending, $600 billion to insure money market funds, $600 billion to cover Fannie and Freddie’s worthless mortgage-backed securities, $550 billion for discount Federal Reserve loans, $500 billion to insure FDIC deposits, $300 billion for FHA mortgage relief, $250 billion for Citigroup debt, $225 billion for securities loan facility lending, $200 billion for Fannie and Freddie’s debt, $112 billion for A.I.G., and on down the line.

Add all those numbers up and you’re dealing with more than twice the inflation-adjusted cost of rebuilding post-World War II Germany, the Louisiana Purchase, NASA’s entire budget (since its inception), the S&L bailouts, Roosevelt’s New Deal, the Korean War, the Vietnam War, the Gulf War, and the Iraq War – combined.

Again, that’s inflation adjusted – and all of it spent or pledged by our government within the last sixteen weeks.

2009 could bring additional bailouts, as well, with President-elect Barack Obama proposing another $800 billion plan this week and a number of states announcing that they will seek $1 trillion from the federal government to bail them out of bad spending decisions.

The dimensions of this bailout culture are truly staggering, but other than trillions in “troubled assets,” what exactly have ‘We the Taxpayers’ purchased?

For starters, a lot of debt. With only a fraction of the total bailout tab on the books, our national debt has already soared to more than $10.7 trillion dollars.

That’s an astounding 72.5% of our gross domestic product (GDP).

Eight years ago, the debt was $5.6 trillion, or 58% of our GDP.

Throughout this crisis, we were told by leaders of both parties that government had to “do something” or else we would face an “economic Pearl Harbor.”

I would argue that with wealth disappearing, unemployment skyrocketing, productivity vanishing and consumers burying their money, the “economic Pearl Harbor” is upon is – and that the trillions in bailout funds did nothing to slow its fury.

In a recent article published in the Wall Street Journal, former American Express CEO Harvey Golub proposes a different solution.

“We must get back to our historic reliance on personal responsibility and market forces, and get government out of economic management,” Golub wrote. “It doesn’t do a good job, as the current economic mess amply proves.”

I couldn’t agree more.

Let’s not continue down the same road this year. Let’s make 2009 the “Year of Fiscal Responsibility.”

On this week in 1936, United Auto Workers’ members occupied a General Motors plant in Flint, Michigan, staging a “sit-down strike” that resulted in the beginning of a thoroughly destructive exclusive labor agreement between the company and the union.

With the eager acquiescence of corporate management, the UAW union bosses quickly set out upon a decades-long policy of bleeding the competitive life out of General Motors (and Chrysler and Ford). That policy helped the union emerge as an unrivaled political force and eminently wealthy special interest. But, the relationship was, if anything, parasitic.

Like a parasite devouring its host organism, the union thugs have finally ended up slaying the goose that laid their golden eggs. In this case, however, it must be noted that the goose willingly laid its head upon the chopping block.

Bowing to each and every union demand with slavish obsequity, the Big Three management all but abandoned even the appearance of focusing on long-term viability rather than the next quarter’s profits. As, Noel Tichy, a University of Michigan business professor and author who ran General Electric Co.’s leadership program 1985-87 and once worked as a consultant for Ford, recently wrote, “There has been 30 years of denial. They did not make themselves competitive. They didn’t deal with the union issues, the cost structures long ago, everything that makes a successful company…”

And as was all but inevitable, soon, both the union and the host will begin to disappear beneath the waves of a free market reality that American politicians can’t bail them out of – no matter how much taxpayer money they throw at the problem.

It turns out that Reagan was right – you can’t consistently turn a profit with a Marxist albatross hanging around your neck. And of course the thick-necked union enforcers don’t get it – steadfastly refusing to acknowledge that fattening their pension funds has crippled the sustained employability of the millions of American workers they were created to “protect.”

Even as American taxpayers are pumping billions of dollars into a dying industry, there is near universal agreement that this latest round of excess government interventionism is destined to fail.

“This is like taking a little Flintstones Band-Aid and using it on a leg that has been amputated,” Ft. Worth Business Press/ writer Tony Auer wrote earlier this week. And amazingly, no one in the Bush administration that foisted this mess upon us is seriously challenging the analogy’s accuracy.

In fact, even before the president approved the initial outlay of $17.4 billion (previously rejected by Congress), his own Treasury Secretary, Henry Paulson, admitted the long-term futility of the investment.

“If the right outcome is reorganization or bankruptcy, then isn’t it better to get there through an orderly process where every effort is made to avoid it, and if it can’t be avoided, everyone’s prepared for it?” Paulson told a group of New York industrialists shortly before Bush approved the bailout.Bush’s spokeswoman similarly referred to the bailout as giving Detroit a “soft landing.”

Of course, some analysts anticipate another $50 to $75 billion worth of “soft landing” being poured into the “Big Three” over the coming fiscal year as a more “labor-friendly” administration comes into power in January.

Not surprisingly, the union bosses remain just as arrogant and the corporate chiefs just as tone-deaf as they’ve always been; the former adopting a harsh line in negotiations and the latter supinely accepting it as they both race to the brink of extinction. Having chauffeured the compliant carmakers off a cliff by refusing to make concessions to keep them competitive, they are now making certain that the ruinous cycle repeats itself on an even higher-stakes stage.

Specifically, labor bosses are refusing to agree to the wage concessions of the initial bailout, terms which one of their bought-and-paid-for, Democratic Congressman Rep. Barney Frank, recently decried as an “unfair assault on working men and women.” Of course, while Frank and labor’s other leftist allies invoke the tired old class warfare liturgy, just last week it was revealed that the UAW was continuing to operate a money-losing $33 million lakeside retreat with its own $6.4 million designer golf course.

And in a particularly juicy bit of irony, the union pays for the facility with interest from its “strike fund.”

This is precisely the sort of self-serving hypocrisy that has caused the UAW to lose nearly two-thirds of its membership over the past three decades.

Yet while the costly (and unnecessary) demise of the American automotive manufacturer will no doubt continue this coming year, Washington politicians haven’t learned the painful lesson of the “Big Three.”

In fact, they’re trying to add millions of new workers to organized labor’s dwindling rolls by passing the oxymoronically-entitled “Employee Free Choice Act,” which actually strips away a workers’ right to a secret ballot.

America simply cannot afford to conjure up new ways to bring organized labor back from the dead. As the sad saga of Detroit makes clear, doing so is only to invite further disaster.