Paulson Stampedes Congress

Secretary (His Majesty) Paulson is stampeding Congress into spending taxpayers' money to bail out Wall Street and other bankers.

If you and I had bought these bad mortgages or the CDOs (Credit Default Obligations), who would bail us out? No one. We would have to work it out on our own.

He is telling us the banking system of the US and maybe the whole world will fail unless us little guys give our money to the billionaires in New York, London, Tokyo, wherever. Shucks, we can do it. Every man, woman and child in our country only has to cough up $2,500. I better check my bank account to see if I have that much so I can write them a check.

If you notice, your local Congressman and Senator (hopefully yours isn’t one of them) is fitting you with bracelets to tie your wrists to your ankles.

The latest words of wisdom from The King (as he was called by Newsweek magazine) is we will make a profit when we (the government) sell the mortgages we are now going to buy from the banks at a discount. Of course, he didn’t say how much of a discount.

Let’s just say for a minute that they do sell that discounted mortgage paper at a profit. Where is that profit going to show in my (taxpayer) account? Do I need to remind anyone that when money is given to the government it is spent? (There is no money in the Social Security Trust [sic] Fund).

There will be another huge government bureaucracy created just to manage the outgo and (theoretical) income of this $700 billion. This is where all the friends of the new president (whoever that might be) will end up drawing big salaries. Once a new bureau is created, it is never dissolved.

This is supposed to create a surplus. Has there ever been a year when government expenditures have decreased? Never. In good times government grows to give more services and in bad times government grows to help get us out of the bad times. YUK!

The problem is not that there's not enough money. The problem is the FLOW of money. Money is the life blood of business. It has come to a halt not because there is not enough of it, but because no one trusts the collateral being given for borrowing purposes. namely these garbage mortgages created at the requirement of the federal government. (I won’t explain that here.)

The smokescreen going up says more people will be put out of work if small (and large) businesses can’t borrow. There are other ways to flood the country with money.

Giving special tax incentives to business will bring back money that is now hiding overseas. This would not only not cost the taxpayers any money, but would create many, many new jobs.

Don’t be stampeded by rhetoric. There are better ways to get the economy moving and save the banks too.

Comments

[NC Trader:]

CDO= Collateralized Debt Obligation. That correction pretty much sums up my feelings on this article.

2008 Sep 28 07:29 PM

[TheSnail:]

Thank God your not in charge of anything

2008 Sep 28 08:55 PM

[TheSnail:]

If you want to understand why we need to stabilize the economy with this bill, check out this piece by John Mauldin.

www.frontlinethoughts....

He's been spot on for the last year. Its hard to believe he shares his insights for free. Subscribe!!!

2008 Sep 28 09:05 PM

[johnthebear:]

Google "Community Reinvestment Act" or check out Wikipedia for a very good discussion of the history leading to the massive bailout.

What you will read will make your blood boil and tell you the truth without political distortion.

There are many other web sites that discuss and analyze the financial failure of Fannie and Freddie. Just take a look with Google. You don't have to take my word for it.

It is amazing that the public is so dumb and easily fooled by the smooth talking oboman.

When we elect him president, he will control 100% of the United States Government. It will not take long before he takes over the Supreme Court by appointing a couple of very young left wing extremist to the court. You can say good bye to everything good about America.

We will look just like Russia, And to think, not a shot was fired! Lord help us, we know not what we do!

2008 Sep 29 04:18 AM

[henarl:]

Al: Actually, this bailout will not cost you any more that all of the other government expenditures that you are paying for. A government (any government) will always take all of the money from their population that they can get away with without creating a revolution (occasionally they miscalculate and the revolution does occur). Your cost, whether by taxation or by inflation caused by excessive borrowing will always be the maximum they think they can get away with. How they spend it has no bearing on how much they will take from you. Governments are a necessary evil and eventually become more evil that necessary. Learn to live with it!

2008 Sep 29 04:14 PM