Taxpayers would take the fall for a problem Wall St created.
Millions of US taxpayers should not be held responsible for the catastrophe created by foolish (and greedy) bankers. This financial crisis did not materialize out of thin air. It is the result of years of reckless investments, careless government and already-wealthy bankers trying to get even richer.
Why should struggling US taxpayers take on this massive economic burden?
Is this $700B really going to protect ordinary people?
The people and institutions who have proposed this deal are trying to paint it as a last-resort to save thousands of ordinary people’s 401K’s, life savings, and IRA’s. No doubt, there will be pain felt by ordinary Americans if the bailout package is rejected by Congress, but this proposed $700B isn’t going to help the individuals hardest hit by the crisis — it’s going to help the shareholders and leaders of these companies.
If it’s really the ordinary Americans we’re concerned about helping, why don’t we let the banks fail and create a (much smaller) fund to support the hardest-hit American families?
$700B? Try $839B!
Although the cost of this bailout could not exceed $700B without further legislation, It would bring the total cost of this crisis to a staggering $839 billion!
Bush and the other proponents of this package neglect to remind us that this $700B will be added to the $85 billion agreement to bail out AIG, the $29 billion our government has pledged to support the merger between Bear Sterns and JPMorgan Chase and the government’s commitment to save Fannie Mae and Freddie Mac, which the Congressional Budget Office is saying will cost at least $25 billion.
Cheating the market is dangerous.
This bailout would represents us literally ‘cheating’ the market and it would only delay greater economic catastrophe down the road. Bush and Paulson act as if we (the taxpayers) take on the pain of paying the $700B, then everything will be fine in the future.
Many economists would argue this is not so. We are throwing up a “hail Mary” here. There are no guarantees of a full recovery, and many would argue that this bailout will only prolong and exacerbate an economic meltdown in the future.
The US dollar has already lost a tremendous amount of value over the last 5 years. What will happen to its value as we make the ultimate bad investment by buying worthless securities that are virtually un-tradable as the Fed continues to print billions more, diluting our currency even further?
The answer is that our dollar, the value of which Americans have always taken for granted, might lose (a lot ) more of its value over the next 10 years, making every single person in this country poorer.
Global economic recession?
There has also been talk that rejecting the bailout package would cause damage to the global economic system, since these worthless mortgage-backed securities have been divided into thousands of pieces and re-traded all over the globe.
But there is an even greater risk to the global financial system if we go forward with the bailout. As the US dollar loses more and more value, what will happen to the dozens of international currencies pegged to the dollar? The dollar’s demise would represent the ultimate global financial meltdown.
What if it’s not enough?
What do we do if the American taxpayer makes this tremendous sacrifice and it’s simply not enough? George W. Bush said the war in Iraq was going to cost $50 billion.
Did we pack up and come home when that threshold had been crossed? Of course not — we just asked Congress for more to keep fighting the war! As the real-time clock below shows us, we are now nearing $600B spent in Iraq. Once the US has invested $839B+ in this bailout mess, we are “all in” — there is no turning back and it shouldn’t surprise anyone if this turns out to only be the first installment.
The American tax payer is already fighting hard enough times.
Can American taxpayers even handle another burden on our finances? How much longer will we allow the federal government to drag us into economic despair and use our hard-earned money as their piggy bank, to bail out bad foreign policy and massive economic fumbles?
Imagine what our country would look like if we instead invested the almost 2 trillion dollars from the bailout and the war combined, on everything else we need? Imaging injecting those funds into our education system or health care. What kind of return on investment would that bring, in comparison to some now-worthless assets that might become slightly less-worthless in the future?
A leap towards Socialism.
We have built the most powerful country in the world using a system of free market capitalism. We use regulation to prevent things like monopolies that could harm the system and eliminate competition, but capitalism has worked so well because the golden rule is ‘survival of the fittest’.
Companies that make bad decisions and grow fat with debt are eliminated and make room for new ones who are more innovative and intelligent in their approach to doing business.
Buying up $700 billion worth of toxic securities is something a socialist government would do. Many have called for the end of government farm subsidies whereby the US government buys dead crops simply to keep our farmers in business. What we’re considering doing here, is buying almost a trillion dollars worth of dead crops!
Where is the pain for wealthy bankers?
There is nothing in this bailout plan that ensures the bankers and investors behind this mess would bear any burden. We should demand a guarantee that the people whose greed and recklessness caused this crisis lose their money first and are hit the hardest.
The current package has no limits for executive compensation for firms receiving funds from this package. If the current proposal goes through, these guys will have gotten away with financial mass-murder.
What example would it set for reckless financial institutions?
In the absence of responsibility that firms would have to take for their actions, Wall St would likely feel a sense of comfort that the federal government now had their back. This would only encourage more corporate policy that fosters insane risk-taking even when the potential fallout might maim the savings of thousands of hard-working Americans.
George W. Bush is urging Congress to take quick action.
What’s your first reaction when a sleazy salesman tries to force you into buying something quickly? How about when that salesman is George W. Bush and he’s just said, with a condescending smile on his face, “It’s a big price tag, because it’s a big problem.”
Since George Bush is not only the salesman, but also the administrator of this program, I for one would want to read the fine print to see what kind of other bullshit lies within the package’s language.
Surprise, surprise! Section 8 reads:
“Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.”
This little tidbit basically concentrates all power in the administration of this package in the Executive Branch and makes it illegal for the decisions made or money allocated to come under any scrutiny from any court or oversight committee within the US government.
Knowing what we know about George W. Bush, would you say he’ll be tough on the high-powered corporate interests as he distributes these funds? Will he stand up for the American taxpayer?
Would you feel comfortable giving Bush full reign of the implementation of these funds — allowing him to hire any non-governmental agent he sees fit?
If the bailout package is approved as is, it will be the final turn of the knife in the average working American’s gut — a crime we won’t be able to ever hold George Bush accountable for.
We urge you to write and email your congressional representative to make sure he/she knows you are watching for his/her vote on this issue. Please send this article to everyone you know, as the mainstream media is only perpetuating the fear spewed into the airwaves by the Bush Administration, all in a rush to get this through Congress before anyone can speak up about its lunacy.