The 2015 budget plan comes out today. Will President Obama's Robin Hood approach improve the economy?

SGT Newman.  Some things to consider...

I agree that picking winners and losers IS a great thing, so long as it is the consumer that does so.  As we see all too often when government is allowed to do so, the winners tend to be those who contributed to some politician's campaign.  The examples are rife.  Haliburton, Solyndra (to the tune of nearly a half billion dollars of taxpayer or borrowed money, only to go bankrupt a short time later), Michigan automotive battery maker A123 that received 250 million ( 1/4 billion) dollars to build factories and batteries here in the US, only to be sold to the Chinese after producing exactly 0 batteries.  Is this the fool-proof government winners and losers you are suggesting.  When the Winners and losers are picked by politicians, then the friends of politicians are the winners (even when they go bankrupt) and the American Taxpayer are the losers EVERY TIME.  I would suggest that the market is far better at choosing the winners and losers based on their ability to provide useful products at marketable prices that people are willing to pay for freely.  The alternative of government making those choices for us means that there are fewer choices, and other perhaps, more efficient companies are being excluded after not being able to compete without the millions, or tens of millions, or hundreds of millions of dollars of taxpayer money arbitrarily sent to their "competitors" in the marketplace. 

The Commons?  Have you heard the term "Tragedy of the Commons".  It is an economic term that illustrates the folly of the Commons.  Because the "commons" have no owners, the incentive is to use as much of the commons as is possible regardless of the sustainability of doing so.  Ultimately, the tragedy is that the commons become depleted because nobody owns them and nobody concerns themselves with their sustainment. The solution that comes forth time and again, and can be illustrated by the Pilgrims, is that dividing the commons into individually owned plots incentivizes the individual owners to ensure their sustainability, to not over graze, or over farm, or over use a resource because it will reduce one's own ability to sustain. 

It should be clear that the last thing the Federal government is capable of is long term sustainability.  If they were, we would see balanced budgets, and a shrinking debts.

As to Regulations... the problem with Regulations is that they have the force of law, and yet they are created not by Congress, but instead by politically appointed bureaucrats, often with an agenda.  There are laws against pollution, in every State, and though the Federal government has authority to "regulate" issues between the many States, it is often the Federal government that gives waivers to their friends to pollute more than others are allowed to. 

You mentioned Glass Stegall, wasn't that enacted in 1933?  How well did that work to prevent the banking issues we ran into in 2008?  Regulation does little good when the Federal government enacts other regulations such as the Community reinvestment Act that forces banks to act in an irresponsible manner to fill a political agenda of making sure "every American can enjoy the benefit of home ownership".  Such policies sound great on the surface, but they also led to the easy-money practices that created the housing bubble.... Oh... and the Federal Reserve didn't help by keeping interest rates so artificially low for so long.

Now, regarding the assertion that this is "trial and error", I agree, mostly error.  The problem with a Central body like the Federal government making trial and error decisions for 300 million Americans is that their errors become very large, and end up affecting millions upon millions of individuals.  When the marketplace is the arbiter of winners and losers, then each individual is free to make a trial and error decisions for themselves, and each business is allowed to make trial and error decision for itself.  If they succeed, then we ALL win with better products, at cheaper prices, if they fail, then it's just one company that fails, and others are free to step in to fill the void in a more efficient manner, leading to more winners.  It is through these small leaps of winning that we all benefit, for even when some lose, lessons are learned. 

On the other hand when government makes all these decisions there is no upside.... except a bail out, which hurts the taxpayer, and ultimately sends the signal to the failing company that bad behavior doesn't mean we go out of business to be replaced by a more efficient business with a better product... instead, failure then means being rewarded with other people's money.

One last thing.  We have mechanisms to ensure proper banking that don't require expensive and regular reporting to a federal entity.  They're called LAWS.  We have laws against theft, we have laws against fraud, and each of these laws come complete with a list of punishments.  You know, Bernie Madoff got away with his scam for so long because he knew the regulators, knew what they were looking for, and was actually friends with some of them.  Ultimately it wasn't any regulatory process that nabbed Mr. Madoff, it was Fraud.  In short, the Regulatory process is a big huge net full of holes big enough to drive a truck through, with a huge and expensive infrastructure in place who's primary purpose is to employ bureaucrats, who happen to by chance or luck, or even sometimes by hard work to ensnare a wrong doer.  It is, in fact the LEAST efficient means of policing, but it does have the redeeming value of being politically popular.

Sgt.  None of this is meant with any disrespect, I'm simply making the argument from the perspective of Economic Freedom.  To be clear, I think polluters, should be severely punished, I just think that the EPA spends far more time protecting rodents and insects on private property than they do catching or preventing polluters.  Apologies for the length of this post.

Actually, the DOE loan guarantee program is not doing all that well.  In fact, "the Congressional Budget Office has calculated that the risk of default on the DOE’s nuclear loan guarantee program, for example, is well above 50 percent."  Meanwhile if the loan DOES happen to pan out, the risks are socialized, while the profits are privatized.  There is little market involvement, and a whole lot of political and ideological involvement in making such decisions.

In the article linked below you will see how one corporation has received DOE loan guarantees to produce solar panels, while it's parent company received DOE loan guarantees to purchase those panels essentially from themselves.

You will also see that the jobs created and sustained by these DOE loan Guarantees leave a taxpayer exposure of  $6.7 million each.

And since these 1709 guarantees fall under the 2009 stimulus package the chartered purpose of these loan guarantees is that they are to go to start-up companies.  Records show this is far from the case.  In fact, over $90 million went to Goldman Sachs.

Perhaps these examples are meaningless if one only understands that the losses could have been, or were projected to be even higher, but by any rational standard, such programs are clearly malfeasance, and if they were conducted in the private sector, they would be labeled and prosecuted as fraud.  But since it's politicians and Bureaucrats making the decisions and it's the Taxpayer who is left on the hook..... well, there are apparently less offensive words that are used to describe such activity and no consequences for "wrong" answers.

Keep in mind that when ANY DOE loan is defaulted on, the American People end up paying the bill.  Here is an informative article from George Mason University on the subject.

http://mercatus.org/publication/assessing-department-energy-loan-guarantee-program

Assessing the Department of Energy Loan Guarantee Program | Mercatus

In his famous book Economics in One Lesson, economist Henry Hazlitt wrote, “Government encouragement to business is sometimes as much to be feared as government hostility.”[1]

Sgt Newman, "Glass Stegall, wasn't that enacted in 1933? How well did that work to prevent the banking issues we ran into in 2008? " It worked great until it was slowly weakened starting in the 1980s and fully killed off in 1999.

Are you suggesting that these regulations are no longer in effect?  Have they been repealed?  Or were they simply set aside in favor of political programs like the Community Reinvestment act that encouraged banks to lend to high risk lenders but to NOT have to service the notes, with Federal Reserve-set  artificially low interest rates that caused a housing bubble?  Here we clearly had one set of regulations that negated another set of regulations leading to very destructive consequences. 

The fact remains that there are over 170,000 pages of Federal regulations, many of them contradictory.

My only point regarding Glass Stegall, and the Community reinvestment act is that the latter trumped the former and effectively made Glass Stegall a moot point, in favor of a home buying frenzy.  The Reinvestment act took away many of the protections of Glass Stegall and encouraged lenders to sell mortgages to risky lenders and later allowed, through FMAC to bundle and sell those mortgages instead of requiring that those lenders service a significant percentage of those loans.  I wasn't equating them by any means, but rather pointing out how the one essentially negated the other.  It is the folly of the web of regulation in which we are entwined.

I too grow weary of sparring... thank you for the good points, and the civil tone Sgt Newman.