Banks Saved, Government Solvency Lost
Sep 19th, 2008 | 13 responses
The above should be the headline for what Paulson’s Gang hath wrought today. In order to get ahead of a banking crisis hurtling down the tracks, our government has been tied to the tracks in front of this out-of-control train. When the markets (and much of the country) wakes up from the one- or two-day market drunk this move generates, truly horrid realizations will come to the fore.
Here’s just one thing to keep in mind in the wake of this mad concoction put together by a panicked group of frightened little men: This year’s projected federal deficit, recently projected to rise to a monstrous $490 billion, will now rise by another half-trillion to two trillion dollars, depending on the actual size of the “toxic assets” the government is about to acquire.
If your own personal debt were doubled, tripled or quadrupled, how would that affect your personal credit? It works the same for governments. Something to think about while this latest machination of an expiring Administration plays itself out.
13 Responses to “Banks Saved, Government Solvency Lost”
But hey, according to Bush lower taxes means more revenue for the government! And if the total deficit is increased by another trillion, it's good for the economy!
This is like the return of David Stockman. When the Obama Adminsitration begins, they will be facing huge deficits. So much for free college for everyone, free healthcare for illegal aliens, and more government jobs. Of course, this will give the coming Democratic adminisration a reason to support massive tax increases but the money will be spent on debt instead of new government entitlements.
This is sickening. Just sickening. What about better-risk people? They deserve their loans also be taken care of; in fact, the better-risk people deserve better treatment than the deadbeats.
And so much for Washingtonian Republican free-marketeers.
Never mind Bush's (and McCain's) tax cuts, Stockster. What is currently happening with these bailouts now justifies massive “investments” [sic; expenditures) on social programs by Obama if he is elected. “If we can bail out the banks, why not help the people?”
Superdestroyer: If Washington can engage in these bailouts, there's no limit to what kind and amount of spending Obama can decide to do, particularly if (as he would no doubt argue) many more people would benefit from Obamian social spending than from any bank bailout. On Inauguration Day Obama no longer need fear advocating Medicare for All, for example. These bailouts are _releasing_ Obama from spending constraints, as far as I am concerned (considering how social spending appeals to so many). Oh, we can view the current bailouts cynically and figure the GOP (Bush administration) is not only stealing the economy from Obama (or trying to, at least), but presenting the next President with hopeful spending limits as well as debt limits if a debt trap is to be avoided (how do you think the bailouts are going to be paid for?). Well, guess what. Perverse as it seems, it's also perfectly understandable that such bailouts now justify massive spending of other “needed” [sic] kinds by Obama next year.
DLS I don't think Obama will even be able to propose any new spending. At this rate no one will buy our bonds before he even comes in.
This will truly turn out worse than the Great Depression. If we do it then we're going to have to basically pull our military out from everywhere and cut its budget by 80%, get rid of all subsidies for everything and raise taxes a ton or else there will be currency collapse.
It might be a bit early for great depression speculation, but DLS makes some excellent points. The number of things wrong with this sort of proposal are numerous. From a strictly moral basis (if that's the right word) it's rather insulting to see this much of a handout take place when others who have managed to find a way to work within the system and do the right thing continue to foot the bill.
Also, can we really sit by and watch the potential addition of as much as another trillion bucks in Federal debt on our heads? As much as I've been looking for candidates who actually have some interest in reducing defiicts, the debt and government costs (with no expectation of success) this is just what I didn't need to see.
McCain's hiding Sarah Palin away from answering any questions from the media so that the American people will be able to make an informed choice, is the reason why we cannot trust him in this financial crisis. There is something deceptive in that action of hiding her away, it is not honest and it is not truthful and it is a lack of integrity!
America we cannot afford, nor can we trust, nor can we have any confidence that McCain and the Country Club Boys First Club will fix our failed and crumbling economic system, when at heart their allegiance is to the Country Club Boys first and not to the American people. Their fixing will be a partial measure of change and a band aid — looked to assuage a worried public but will do nothing to bring the radical change and upheaval needed to get America truly back to being fiscally sound and thriving again! It will be short turn and to their advantage.
McCain can Run, McCain can Pretend, McCain can Deceive but McCain cannot Hide from his past — the S&L Scandal and the Keating 5! To trust these Country Club Boys again to make fair and sound changes on behalf of the people, would be to do so at your own risk and detriment! When you see and hear McCain speak think, Wizard of Oz! America we must pull back the curtain and expose the deceit and deceptions of the country-club boys and get off the Yellow Brick Road! It is somehow sinister to hear McCain now pretend to get a Heart — Courage — and Brain while he deceptively talks about regulation and transparency when he has been against it his whole political career. McCain cannot change the Old Guard because he is part of the Old Guard, but the new kid on the block, Barack Obama can.
Republican Good Old Boy Government Says:
“We don’t have ENOUGH MONEY to fix Social Security
We don’t have ENOUGH MONEY to fix Medicare
We don’t have ENOUGH MONEY to provide health care to ALL Americans
We don’t have ENOUGH MONEY to help out Americans losing their homes
We don’t have ENOUGH MONEY to help all our veterans returning from war
BUT
We DO HAVE ENOUGH MONEY to bail out Fannie Mae and Freddie Mac
We DO HAVE ENOUGH MONEY to bail out Bears Stearns
We DO HAVE ENOUGH MONEY to bail out AIG
We DO HAVE ENOUGH MONEY to pay for an unnecessary TRILLION DOLLAR war
When the LITTLE GUY needs help, they scornfully say, “GET A JOB!”
But when one of their BIG GUY CRONIES from the COUNTRY CLUB FIRST need a bailout, what do they say?
LET ME GET MY CHECK BOOK!”
DLS,
The other treat to economic sanity is the idea that opening the border to unlimited legal immigration will increase the demand for housing by both new immigrants and miidle class people tring to escape the immigrants. You can call it the California plan for real estate development.
Of course, if no new houses are being built, then there is no need for more low skill immigrants.
Super D: I want economic sanity. (I'd like to see Washington put on a diet and cleanup regimen and return to constitutional federalism and minimalism, but too many who are ignorant or have various motives see the “Auschwitz look” when this is mentioned.) My point is that the moral as well as economic barriers have been broken by some of the worst conceivable “compassionate conservatism” imaginable. It's almost incomprehensible. Almost. [scowl]
*** THIS GUY SAYS IT RIGHT AND SAYS IT ALL, SUCCINCTLY. ***
http://www.bloomberg.com/apps/news?pid=20601087…
Unlimited immigration is simply sought by morality-free and party-building Democrats as well as the GOP that's in bed with the business community. How often have any kinds of businesses been raided? Other than the meatpacking facility in Iowa, whose raid had raised howls of horror and outrage?
“Capitalism without failure is like religion without sin — it doesn't work.” — Meltzer
Super D, where I never have had confidence in Obama's financial plan is in how he plans to offer _real_ tax cuts for most people (below $250,000, the same figure he has chosen for his additional Social Security tax levy and a realistic definition of the boundary between middle and truly high incomes). However, as I have said, this opens his plan to several questions, because it's impossible to avoid levying taxes on those below $250,000 if substantial revenue is desired, particularly given Obama's intention to spend huge new sums of money, as his many promises to his supporters clearly imply.
I've said before that incomes approximate a log-normal distribution, which places the bulk of aggregate income among many, not those few at the top, and requires a “broad” tax base to reap huge revenues, and here you are for one year's example.
( Also see parts 2 and 3 and coincidental definitions of “rich” by Obama and McCain.)
http://www.visualizingeconomics.com/2006/11/05/…
Readers can compare the graph at the foregoing page to the following (and read the related material to learn more about log-normal distributions). (Think of metro area housing prices, for example, while you review this, as well as income distribution.)
http://www.inf.ethz.ch/personal/gut/lognormal/b…
Enjoy (and learn).
Here's my problem with this situation. When you and I invest, take that risk, and lose, we lose. That's it. Plain and simple. When really rich people play the same game with other people's money…making tons off it in the meantime by risky investments, they get bailed out when they lose…by us…
When “Uncle Sam” says “he” will bail out these institutions, what he means is “you folks will bear the burden in the form of huge national debt, reduced programs to the poor and middle classes, meanwhile we rich folks will find ways to get you to make sure we still live in posh, affluence and still enjoy high levels of healthcare and financial soundness.”
It is the final slap in the face from the GOP.
And by the way, the current 'word on the street” is that it is the housing crises that spurred all this on. I think we can find a root deeper than that. I think things started getting out of hand with this illegal war in Iraq and the BigOil push behind that.
T Boone PIckens pointed out that “in the future” a record amount of American wealth was going to be funneled to the Middle East. What he failed to point out was that it already has been funneled to the Middle East OPEC magnates, many of which have deep ties in Washington and our nation's bedrock. That bedrock was shaken when their big gamble: taking over Middle East oil reserves and all the trickle-down wealth they hoped to provide to themselves (and maybe eventually us) failed. That was the beginning of the end.
The housing crises never would've been a crises if our nation was strong and had only a meager obligation to help that out and had preserved better oversight. Our nation is weak precisely because of our unnecessary decades-long forced dependance via the oil monopolies and their lobbiests; who actively suppressed alternative energy to this very day.
No, they didn't totally succeed in convincing the public that alternatives didn't work, only that they were “weird” “futuristic” and “unattainable”.. All of which was false even as long as thirty years ago. They're still at it today with their TV ads telling us that widescale alternatives are still “a long way off” and we “need a bridge” to them for many more years with oil oil oil and drill drill drill.
No. We don't. We need petrolium products to move heavy machines and trucks that need torque but we don't for passenger cars and we don't for light industry. We could've had alternatives for them decades ago and not even be talking about the economy today from the saved revenue and interest.
I'm tired of the lies. Know the truth.