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Thread: U.S. adds 290,000 jobs in April but loses them again in May !!!

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    Default U.S. adds 290,000 jobs in April but loses them again in May !!!

    The U.S. added 290,000 jobs in April, the most in four years.

    http://www.huffingtonpost.com/2010/0..._n_567463.html

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    Default Re: U.S. adds 290,000 jobs in April

    Number 1, the figure includes 66,000 TEMPORARY Federal ( Census ) workers.
    Second, 231,000 private sector jobs created is fine but it's NOT enough. The unemployment rate went UP to 9.9 %.
    Third, the private sector growth was almost entirely the result of the natural business cycle.
    The jobs "created" by Obamanomics were negligible.

    And things are likely to get worse. The stock market is a "canary in the coal mine" indicator. It looks 6 to 12 months ahead. Investors don't appear to like what they see down the road.

    More germane to the employment figures are the addition to the labor force of MILLIONS of brand new high school, college and post secondary graduates this month and next. Where are the jobs for them ? Btw, that is with the deletion of at least one million illegal immigrants who have gone home.

    Obama's tax increases are not going to promote job growth. Quite the contrary. A 40% tax on dividends ? That's really going to be an incentive for new investment.

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    Default Re: U.S. adds 290,000 jobs in April

    Jobs lost = Obama sucks
    Jobs gained = Obama sucks

    Ok, got it.

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    Default Re: U.S. adds 290,000 jobs in April

    Drop in the bucket.
    "Every experience is a lesson. Every loss is a gain."


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    Default Re: U.S. adds 290,000 jobs in April

    Quote Originally Posted by hockeybobby View Post
    Jobs lost = Obama sucks
    Jobs gained = Obama sucks

    Ok, got it.
    Bobby. I'm sorry but I really expect better from you. The fact is, that based on the government's own figures, that Obama and HIS policies have had a net ZERO effect on employment. Even with some growth in private sector employment, it is not enough to keep pace with population growth. HIS stimulus program did NOTHING to stimulate the economy. Neither for that matter did G.W. Bush's two attempts at demand side stimulus programs. The bottom line is that: the best that can be said for Obama's policies is that, arguably, they have not increased unemployment.

    According to the CBO and every other reputable source, 2/3 of the "Stimulus" package went to states and cities to save various programs other than energy and other infrastructure projects. At least with the latter there is something remotely resembling a "multiplier" effect.

    The total underemployment rate is still at 17.1 %. Since Obama took office, it is down from its high of 17.4.

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    Default Re: U.S. adds 290,000 jobs in April

    Mike Shedlock takes a look 'under the hood' ...

    (snip)"This morning the BLS reported an increase of 290,000 jobs. Headline unemployment rose to 9.9%. Hidden beneath the surface the BLS Black Box - Birth Death Model added 188,000 jobs. However, as I have pointed out many times before, the Birth/Death numbers cannot be subtracted straight up to get a raw number. It contributed to this months employment total for sure, but the BLS will not disclose by how much.

    This month there were 66,000 temporary census workers added to the payrolls. That number can directly be subtracted. Interestingly, the details show only 59,000 government jobs in total were added. That means, states have cut back 73,000 jobs. Expect this trend to continue.

    Next month is the big census hiring effect where as many as 500,000 temporary workers will be hired. In June through August they will all be fired but that will not stop economists and the administration from crowing about the numbers.

    On the whole, this was a decent jobs report, but the birth/death number is quite problematic. I do not buy it. Moreover, the BLS report does not remotely jibe with the ADP April 2010 National Employment Report estimate of 32,000. Someone is wildly off, and I expect that to be the BLS, not ADP.

    Those expecting the unemployment rate to drop given the headline number were in for a surprise. However, we were not surprised having talked about this before. The participation rate had been falling like a rock, and if people think there may be jobs, they start looking for them.

    That means people who were not counted as unemployed, now are.
    Expect this to go on for a long time, and expect the unemployment rate to be stubbornly high."(snip)

    from


    In other words, 2/3rds of the jobs the BLS claimed were added in April are the result of a 'computer model' which supposedly projects the formation of new businesses and/or the demise of existing businesses. In contrast ADP bases their numbers on actual paychecks being printed on behalf of employers. I happen to agree with Mike Shedlock that ADP's 'real paychecks' have far more credibility than the gov'ts' computer model. The ADP detailed report has a lot of interesting categorical breakdown as well ...




    Of course, ShadowStats still calculates unemployment statistics as the US gov't used to prior to Clinton Era changes ( i.e. redefining 'discouraged workers' out of existance ) ... and these stats tell an interesting story as well





    ~
    Last edited by Melonie; 05-07-2010 at 05:05 PM.

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    Default Re: U.S. adds 290,000 jobs in April

    ^^^ and even if the gov'ts official unemployment statistics for April actually turn out to be true, the question must then be asked as to what sort of jobs ( and at what sort of pay rate ) are unemployed Americans now willing to accept since the US congress finally drew a line in the sand and refused to extend 'emergency' unemployment benefits beyond the current 99 weeks !!! When ~$2000 per month in unemployment checks now finally stop coming in for tens of thousands of Americans who have now been unemployed for 100+ weeks, it's a fairly strong incentive for them to finally accept a job that pays <$2000 a month ( which they would not have accepted previously, for obvious reasons ) thus leaving the ranks of the officially unemployed.




    Circumstantial evidence in support of this point can be gleaned from another official gov't statistic ... food stamp recipients setting records ...

    (snip)"Nearly 40 million Americans received food stamps -- the latest in an ever-higher string of record enrollment that dates from December 2008 and the U.S. recession, according to a government update.

    Food stamps are the primary federal anti-hunger program, helping poor people buy food. Enrollment is highest during times of economic distress. The jobless rate was 9.9 percent, the government said on Friday.

    The Agriculture Department said 39.68 million people, or 1 in 8 Americans, were enrolled for food stamps during February, an increase of 260,000 from January. USDA updated its figures on Wednesday.

    "This is the highest share of the U.S. population on SNAP/food stamps," said the anti-hunger group Food Research and Action Center, using the new name for food stamps, Supplemental Nutrition Assistance Program (SNAP). "Research suggests that one in three eligible people are not receiving ... benefits."

    Enrollment has set a record each month since reaching 31.78 million in December 2008. USDA estimates enrollment will average 40.5 million people this fiscal year, which ends Sept 30, at a cost of up to $59 billion. For fiscal 2011, average enrollment is forecast for 43.3 million people."(snip)

    from


    From the standpoint of actual income tax payers, the cost of providing food stamps ( as well as subsidized rent, subsidized utilities, medicaid etc. ) for an unskilled worker who is working for $10 an hour is lower than the cost of 'paying them to sit home' for 99 weeks via generous unemployment checks.

    From the standpoint of newly re-employed $10 an hour American workers, unfortunately their re-employment really doesn't do anything to help improve the US economy in general. They contribute zero in the way of net federal or state income tax revenues, and 'consume' a whole lot of social welfare benefits that must be paid for by higher earning Americans who do actually pay income taxes. Thus another case of 'slower decline' i.e. federal and state budget deficits will grow at a slower rate as the result of long term unemployed Americans finally accepting $10 an hour jobs. However, don't confuse a 'slower decline' with actual improvement. And unfortunately, as Greece and other European countries have now discovered, an ever rising percentage of the population who become permanent net 'consumers' of tax revenues versus net 'contributors' of tax revenues is a formula for permanent economic distress.


    More germane to the employment figures are the addition to the labor force of MILLIONS of brand new high school, college and post secondary graduates this month and next. Where are the jobs for them ?
    This is a very serious issue ... given that in order to 'play the 99 weeks worth of unemployment checks' game the unemployed person must have held a job in the first place !!!

    Also keep in mind that something like 1/2 million 'temporary employees' of the US Census Bureau will be getting pink slips in the third quarter as the Census winds up its data gathering phase. As mentioned earlier, the hiring of these 1/2 million temporary gov't workers has been a major contributor to 'favorable' unemployment numbers in the first and second quarter. However, 99% of mainstream financial media and 100% of politicians act as if this hiring is permanent ... and also as if it were funded by private sector business activity as opposed to the US gov't piling on yet more bond debt and deeper deficits in order to cover their paychecks.

    ~
    Last edited by Melonie; 05-07-2010 at 05:50 PM.

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    Default Re: U.S. adds 290,000 jobs in April

    Folks, this is what a "U" shaped recovery looks like. There was other good news in the last few weeks, corporate profits are up! Corporate balance sheets are strong. Why? Banks have quit lending yet business continues on. Companies are using cash flow to grow the business. That is good for the economy. (Bad for banks, but they're zombies anyway. Sooner or later we'll get around to burying them. But, they have too much invested in the Democratic and Republican parties to make them go away too soon.) Companies are hiring. The D&G crowd talks about temporary census workers. But, the truth is companies are hiring permanent workers. The rise in nominal unemployment rates means people are going back into the job market. That too is a good thing.

    But, there was some real bad news, as opposed to the D&G scenarios that pollute this board. The bad news was FreddieMac. Freddie, has already received $52 billion in bailout money and says he needs $10.6 billion more to make it to the end of the year. $6 billion of that is needed to pay the US Treasury the dividend owed on our preferred stock. Thus, Freddie wants/needs to borrow the money to pay the interest on his bailout. The real question is are we throwing good money after bad? The rest of Freddie's balance sheet isn't all that healthy either. Some low lights: Conventional mortgages 90 days late 4.13% up from 2.41% a year ago. Alt-A loans 12.85% delinquent. Interest only mortgages, 18.5% delinquent. Foreclosed properties rose from 29,145 units at the end of March 2009 to almost 54,000 units at the end of March 2010. When Freddie sells properties, it averages a 39% loss on the loan amount. The only bright spot is the number of foreclosed properties seems to have stabilized. None of the financial reforms being discussed in Washington even touch Freddie. We have a lot of work to do and the housing market is no where near out of the recession.

    HTH
    Z

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    Default Re: U.S. adds 290,000 jobs in April

    There has been an upward trend in fewer jobs being lost, more jobs being created over the past year.


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    Default Re: U.S. adds 290,000 jobs in April

    in the interest of fairness ...



    (snip)"The graph below displays monthly employment levels for the private sector (blue line, left scale) and the government sector (red line, right scale) from January 2000 through December 2009, and shows a bleak job picture for America’s private sector. Since private sector employment peaked at almost 116 million jobs in December 2007 at the onset of the recession, more than 7 million private sector jobs have disappeared, while during the same time period government jobs increased by almost 100,000. In other words, the entire burden of job losses during the recession has fallen on the private sector, while the public sector has actually expanded and added jobs during the economic downturn."(snip)

    (snip)"What about the stimulus package, revised yesterday upward to $862 billion, that President Obama claimed recently had already “created or saved 640,000 jobs” through last November, and would eventually save or create 3.5 million jobs in total? The employment data suggest that the $862 billion stimulus has yet to create a single new private sector job, as the private sector continues to shed jobs and hasn’t seen a monthly gain in jobs for 24 months. To the extent that the stimulus has created or saved any jobs, they’ve been in the public sector, and have likely come at the expense of crowding out the growth that might otherwise have taken place in the private sector. After all, the only way the government can stimulate one person with a job or income is to first “unstimulate” somebody else with higher taxes, with no net gain in jobs or income."(snip)

    from


    The obvious take-away is that one must differentiate between private sector jobs, i.e. jobs where paychecks are funded by business profits ... and public sector jobs, i.e. gov't jobs where paychecks are funded by taxing private sector businesses and workers, by money borrowed from foreigners by the US ( and state ) gov'ts which US taxpayers must eventually pay back, or by money newly printed up out of nowhere by the US Fed which devalues everyone's US dollar purchasing power !!!

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    Default Re: U.S. adds 290,000 jobs in April

    Quote Originally Posted by Melonie View Post
    in the interest of fairness ...

    The obvious take-away is that one must differentiate between private sector jobs, i.e. jobs where paychecks are funded by business profits ... and public sector jobs, i.e. gov't jobs where paychecks are funded by taxing private sector businesses and workers, by money borrowed from foreigners by the US ( and state ) gov'ts which US taxpayers must eventually pay back, or by money newly printed up out of nowhere by the US Fed which devalues everyone's US dollar purchasing power !!!
    No, the obvious take-away is you picked a graph that misrepresents the size of government jobs in comparison to those in the private sector.

    HTH
    Z

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    Default Re: U.S. adds 290,000 jobs in April

    Quote Originally Posted by Eric Stoner View Post

    And things are likely to get worse. The stock market is a "canary in the coal mine" indicator. It looks 6 to 12 months ahead. Investors don't appear to like what they see down the road.
    As of right now, the Dow is up 433 points.

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    Default Re: U.S. adds 290,000 jobs in April

    ^^^ you can thank German, French, British and to some degree US taxpayers for that !!!

    However, many argue the position that the EU bailout is just the latest edition of 'extend and pretend' ... that will have to be dealt with in real terms sooner or later



    I would also point out that today's 400 point DJIA gain is still 300 points short of making good the DJIA losses from a week ago !
    Last edited by Melonie; 05-10-2010 at 03:55 PM.

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    Default Re: U.S. adds 290,000 jobs in April

    Quote Originally Posted by Zofia View Post
    No, the obvious take-away is you picked a graph that misrepresents the size of government jobs in comparison to those in the private sector.

    HTH
    Z
    Huh ? Would you please explain that ?

    The fact is that increases in GOVERNMENT employment are a drag on GDP. Government workers do NOT produce goods and services. They CONSUME. Money spent on them cannot be spent on other things.

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    Default Re: U.S. adds 290,000 jobs in April

    Actually the numbers from the Household survey were even more encouraging ( up over 400,000 jobs ) but the overall unemployment rate still went up two basis points.

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    Default Re: U.S. adds 290,000 jobs in April

    Quote Originally Posted by eagle2 View Post
    As of right now, the Dow is up 433 points.
    The markets LOVE bailouts. Even TRILLION dollar ones that, at least in the case of Greece, will not work. Even with the bailout, Greece is headed for eventual default.

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    Default Re: U.S. adds 290,000 jobs in April

    Quote Originally Posted by Eric Stoner View Post
    Huh ? Would you please explain that ?

    The fact is that increases in GOVERNMENT employment are a drag on GDP. Government workers do NOT produce goods and services. They CONSUME. Money spent on them cannot be spent on other things.
    THis is a myth, since government services usually come with FEES, which either mitigate or offset the "drag" on the economy. The government also gets its tax-revenue back on the salaries. Works projects build infrastructure, which increases productivity for everyone. Build a highway and that cuts commuter time, auto repeairs, accidents and medical expenses. Schools keep kids occupied inexpensively (money that would go to childcare), and educates future taxpayers.

    You seem to want FEUDALISM more than a true private-sector economy. Public spending is just a necessary check and balance against selfish rich people hoarding their carsh in an attempt to starve the ppoor. If rich people did their job and invested in the poor, we wouldn't ened government to take their place.

    When's the last time you invested $10,000 in a startup run by someone with a great idea and no cash, for reasons other than they were a relative or someone you liked? Capitalism depends on merit, and on those with money rewarding those with merit. When that happens, good people with good ideas get ahead. Instead, you have rich people trying to cut the legs off the poor, and trying to cut off the legs of the governments that would assist them, or merely restore economic justice. Look at the unemployment situation: CEOs move jobs offshore, and complain about people receiving unemployment for 99 weeks, when they created the conditions that caused this in the first place.

    Our billionaires are so selfish at this point they'd rather see America itself collapse than redistribute wealth so that the average person could live a decent life, and become the next generation of consumers that would preserve their position in society. By the time they realize why they had to do this, they'll be as broke as everyone they used to laugh at.

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    Default Re: U.S. adds 290,000 jobs in April

    Still not a net positive. None of this has anything to do with Obama. It seems his bailouts haven't trickled down at all in terms of employment opportunities. But shareholders of large corporations, which we all are if we own any stocks or mutual funds, seemed to have finally gotten out of the hole that was 2008.

    Still not sure how this has anything to do with Obama and everthing to do with the pre-eminent natural business cycle.

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    Default Re: U.S. adds 290,000 jobs in April

    Quote Originally Posted by Eric Stoner View Post
    Huh ? Would you please explain that ?
    I thought you might be smart enough to read the scales on the left and right vertical bars, but I was wrong.

    The fact is that increases in GOVERNMENT employment are a drag on GDP. Government workers do NOT produce goods and services. They CONSUME. Money spent on them cannot be spent on other things.


    GDP is gross domestic product.
    C is private consumption.
    INV is investment.
    G is government spending.
    eX is exports.
    i is imports.

    Learn the terms or don't expect anyone to take you seriously.

    HTH
    Z

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    Default Re: U.S. adds 290,000 jobs in April

    ^^^ that is indeed the classic formula. However, the fact remains that the classic formula attempts to equate the CREATION of wealth (i.e. domestic production consumed and exports) with the TRANSFER of wealth ( i.e. gov't spending and imports ). In the real world they are vastly different entities !!!

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    Default Re: U.S. adds 290,000 jobs in April

    No they're the not. They're the same thing. Each dollar paid to a government worker is worth exactly the same amount as a dollar paid to a worker in the private sector. A bridge built by the government has the same value as it would have if it were built by the private sector. What you're saying makes no sense. You're basically saying the George Washington bridge has no value, since it was built by the government, but if it were built by the private sector, it would have added millions of dollars to GDP.

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    Default Re: U.S. adds 290,000 jobs in April

    Each dollar paid to a government worker is worth exactly the same amount as a dollar paid to a worker in the private sector
    Well, that is certainly what the Keynesian academics would like everyone to believe, but it is simply not true across the board. Consider an 'apples to apples' example of a US Postal Service worker versus a UPS worker.

    When the UPS worker pays federal income taxes, this represents additional money coming into federal coffers in the form of tax revenues. But when the US Postal Service worker pays income taxes, this represents zero additional federal tax revenues ( it merely reduces the amount of tax money that flowed OUT of federal coffers to pay the US Postal Service worker in the first place). When a UPS worker pays state and local taxes, this represents additional money coming into state and local coffers. But when a US Postal Service worker pays state and local taxes, this represents a TRANSFER of federal tax money into state and local coffers. Same is true of general expenditures made by the UPS worker bringing new money into local economies, whereas general expenditures made by the US Postal Service worker merely TRANSFER federal tax money into local economies.

    The UPS worker's paycheck dollars originate from private sector business profits, while the US Postal Service worker's paycheck dollars originate ( in part ) from taxes imposed on UPS Corporation and UPS workers !!!!

    In other words, the UPS worker provides a net positive economic contribution to federal, state and local economies, while the US Postal Service worker does not. Yet under the classic GDP formula we are 'told' that the contribution is equal. It is this fact which leads us back to the original thread topic's point of contention ... that the addition of 66,000 temporary US census workers in this month's employment statistics represents a far different result for the real US economy than the addition of 66,000 private sector jobs would have.

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    Default Re: U.S. adds 290,000 jobs in April

    When the "government" pays for a good or service, it's actually individual taxpayers that are paying....no differently than if they were paying someone to build a fence, or clean their house. The people the government pay (on behalf of the taxpayer), are doing work for the taxpayer...whether you personally value that work or not. The government works for the people (as a general contractor of sorts), providing the vital service of running the country....without which, there is no country.

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    Default Re: U.S. adds 290,000 jobs in April

    ^^^ again I am not arguing that a certain percentage of public sector workers isn't necessary, only arguing that public sector salaries ( to the degree that they are subsidized by federal or state tax money net of fees ) do NOT represent the same real world economic benefit as equivalent private sector salaries.

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    Default Re: U.S. adds 290,000 jobs in April

    Quote Originally Posted by Zofia View Post
    I thought you might be smart enough to read the scales on the left and right vertical bars, but I was wrong.



    GDP is gross domestic product.
    C is private consumption.
    INV is investment.
    G is government spending.
    eX is exports.
    i is imports.

    Learn the terms or don't expect anyone to take you seriously.

    HTH
    Z
    Would you please stop personalizing ? It is not necessary and does nothing but detract from whatever merit your arguments might have.

    I asked you a legitimate question which you did not bother answering. Perhaps you don't have an answer. I don't know.

    If you claim that Melonie's chart is flawed then please explain HOW you claim that to be the case. Instead you just resort to personal attack. As you usually do with those with whom you disagree. From my reading of the chart it clearly shows increased employment in the PUBLIC sector and increased unemploymnet in the PRIVATE sector. Do you have numbers which you claim are more accurate and/or more up to date ? Do you have a chart that shows a different picture ? Do you have ANYTHING resembling a factual critique instead of just philosophical disagreement.

    In classic Keynesian economics, a dollar is a dollar. It doesn't matter who spends it for what. Be it the private or public sector. A dollar taken from one taxpayer and given to another has the same economic benefit as a dollar spent on the G.W. Bridge or a dollar put into the garter of a dancer. ( Just trying to keep this as germane to dancing without clothes on as possible. ) However as Melonie points out, there are substantial differences between public and private sector spending and Obama's own DOL and Department of Commerce numbers PROVE IT ! Despite the nearly trillion dollars of "Stimulus" funds spent, there was a net ZERO effect on GDP. That is despite all the new Federal hires under Obama and not just the temporary Census workers. There has not been the predicted and hoped for "multiplier" effect.

    And this is giving Keynsians like Krugman fits. He and his ilk are tearing their hair out trying to come up with explanations of how and why all the spending they advocated has not worked. Most even refuse to admit that too much was spent on transfer payments as opposed to inrastructure projects. Best of all, their loudest wails are that Obama and the Congress did not spend enough !!!! I am not making this up.
    Krugman and his fellow Keynsians have repeatedly written that Obama should spend MORE. That we need another stimulus package !!!!

    Things like bridges are not necessarily good examples. The G.W. was built with funds raised from Port Authority BONDS. Tolls charged to the users of the bridge were and are used to pay interest on those bonds; and to pay P.A. cops, tolltakers and bridge painters. There were also corollary benefits from the bridge including ease of travel and more efficient delivery of goods via truck. People in California and Florida were NOT taxed to build it. Which was only fair because few if any residents of those and many other states use it. If and when they do, they pay a toll like everyone else. Did it generate other economic activity ? Of course. Steel, concrete, asphalt, paint, signage and the like had to be bought thus creating jobs elsewhere.

    In contrast, the "Bridge to Nowhere" in Alaska was paid for entirely with FEDERAL tax funds. It's beneficiaries can literally be counted in the hundreds hired to build it and the dozens who use it on a regular basis. Americans living in the Continental U.S. had to pay for it just as they paid $10 billion for the "Big Dig" in Boston. There are NO benefits, direct or indirect, for the average taxpayer from either project. Both should have been paid for with Alaskan and Massachusetts funds respectively.
    Last edited by Eric Stoner; 05-11-2010 at 11:06 AM.

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