Billions From Heaven
By Steve Hynd Thursday Sep 25, 2008 4:00pm
I keep reading about the Republican Eric Cantor's plan being better than Paulson's Folly because it says banks, financial firms and other investors holding toxic mortgage securities would pay premiums to the Treasury to finance the insurance coverage. The idea is that institutions holding higher-risk securities would require higher premiums and the whole thing would involve the investment houses forking over instead of the taxpayer.
Huh? This whole plan relies on most people thinking "insurance" just flies out of the heavenly spheres fully formed. But no-one knows how much these toxic debts are worth and it seems to me that if no-one can set a fair price for buying them outright, then no-one can set a fair premium for them. The premium, following good insurance practice, given that these debts are toxic and pretty much certain to result in payouts anyway, should be as near to the costs of just taking them on outright as makes no difference anyways. Think of it as just a form of gambling - you don't give decent odds to someone betting on a sure thing. That is, the costs of insurance will be exactly the same to the taxpayer in 2008 dollars as the costs of the Paulson bailout - just kicked down the road instead of right now. By which time, inflation and prospects for the dollar being what they are, they'll cost one heck of a lot more. And along the way, the Republican plan will have drained some more liquidity out of the financial system and helped finance house along the road to insolvency as the banks will have to reserve money to pay premiums that they could be lending to Main Street USA at financially sound terms instead.
Worse, it has been suggested that some of the toxic debt might not be so toxic after all and that some might even show a profit if the Treasury could "hold to maturity". If so, Cantor's plan really is outrageous because it would let the finance houses keep the profit for such while the taxpayer indemnifies them for the bad. And if the banks can in any way identify which portion of their toxic debt might be good at "hold to maturity" prices, they don't even need to pay the insurance premiums on that portion. The manager of the country’s largest bond mutual fund thinks his team can indeed seperate the truly bad from the potentially good, and has offered to do the job for the Treasury for free.
It looks like a political shell game to me, relying on common ignorance about insurance to push a plan that is actually functionally worse than the one it would replace while having almost exactly the same long-term costs to the taxpayer, only disguised in the short term for the GOP's political advantage. "Look how much we saved taxpayers!" It would also, according to Cantor's bullet points, remove " regulatory and tax barriers" - the same old Republican mutton dressed as lamb.
The other Republican plan floating around - that there be less regulation, more tax cuts and a suspension of capital gains tax for assets that are worth less than paid for them - is just dumb economically. It's a transparent attempt to hand ownership of the crisis to Dem's by throwing a spanner in the works then proclaiming loudly that they preside over a "do nothing Congress" and have wrecked the economy by their failure to act.
Warren Buffett today was quite clear where that kind of petty political obstructionism is going:
“We are looking over a precipice in terms of the economic condition of the country for the next few years,” Buffett said during an interview on the Fox Business Channel. “If Congress doesn't help us on this, heaven help us.”
So we have two alternatives, because Paulson's Folly really is dead. The Republican alternative calls for kicking the can down the road, increasing taxpayer costs thereby, making no meaningful plans to regulate financial services and even so leaving the taxpayer empty-handed at the end of it all. The Dem plan puts the costs up front but in tranches so that no-one is running away with taxpayers money without accounting for it and leaves the taxpayer owning a sizable chunk of admittedly partially damaged banks. Where's the debate?
Crossposted from Newshoggers
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Obama/Biden08
When it comes down to it, didn't AIG go under in the first place for insuring that mortgage borrowers who couldn't afford to pay would somehow magically be able to pay their debts? Now we're suggesting that doing just that -- only with the taxpayer's money as the held assets -- is somehow going to solve the whole problem? Does this make any sense at all???
world capitalism in crisis
Reading Marx describe exactly what's happening now way back in Capital vol.3 ch.30 is just eerie.
constituent @ 1:
Yeah, that helps seeing as Obama is for the original Paulson plan.
I know this is off subject but does anyone know what website is offering a live stream of the debates tonight? I don't have cable but really want to watch the whole thing. Thanks in advance.
Trailer for Barack Obama The Movie. Check it out :)
http://www.youtube.com/watch?v=p4p1G3r0948
Bailout, from what?!!!
The results of their own greed. Nearly everyone speaks as if the assumption that it must be done is correct.
The is Master Swindler George Bush talking about his buddies.
Government of, by and for the Fat Cats.
A well-run insurance company (good underwriting practices, solid investing practices, etc.) is a GUARANTEED money-maker.
I think Cantor's plan has merit -- if the government insurance company were run by insurance industry professionals and overseen by a master insurance regulatory body.
Billdemo @ 6:
Let Nader debate, check it out!
http://www.youtube.com/watch?v=u5WiE6MnmCM
EJG @ 5:
I would first try c-span on line. One of their channels is sure to be carrying it. I think CNN has on line feed too.
I would think that regular channels like NBC would be carrying it as well as maybe CBS and ABC. I hope they are, as important as this debate is for all America.
wheyghey @ 4:
i thought he wanted modifications. sounds like you know
better than i do....maybe your right mccain and palin
has it all figured out.
pissed off patricia @ 10:
Last schedule I saw had all the major networks carrying the debate.
We need to start arresting people in the Treasury Dept. and the Federal Reserve.
That would be my plan.
Billdemo @ 6:
Another example of right wing (non) humor.
Over five million homes are in foreclosure now... they are happening at a rate of over 1,000 a day.
These thieves have not only ripped off those home owners, but now they have brought down the whole banking system and want the US tax payers to pay for it??? WTF!
I want the money back from these assholes! I want perp walks! I want frog walks! I want the guillotine brought back!
http://www.bloomberg.com/apps/news?pid=20601109&sid=aGL5l6xOPEHc&refer=home
warren buffet has said that the public could make money if done correctly.
someone here is against how obama is dealing with paulson.....let me remind you that the republicans
don't have a plan. the democrats are trying to find compromise with the republicans so they can work on
this in the future instead of pointing fingers.
obama made it clear he wants a deal that protects the
public............period. one last thing warren buffet
supports obama.
No bailout for these guys. The only bailout I would support is for the people who would lose their homes . Pay off their mortages, let them have title to their homes. Buy back the foreclosed porperties and give them back to the people who lost them. The money will trickle back up to the usurers. Put all the CEO's, board members, officers and guilty directors and mangers of those companies in prison....after confiscating all of their personal wealth. Give that wealth to the treasury. If their companies fail, they fail.
They have been parasitizing our society for too long.
The day before you declare bankruptcy, it's kind of hard to buy bankruptcy insurance. Ask anyone with a pre-existing concdition if they can get health insurance. "My doctor told me I have cancer, so I want to buy your best policy."
Do these guys live in America?
Besides, do they have any money to buy insurance? Looks like NO. Or they wouldn't be aksing the taxpayers for $700 billion.
The GOP idea of offering insurance instead of money is ridiculous.
The Federal Reserve is ALREADY the lender of last resort for the banks. The banks have had "insurance" in the form of emergency funding since 1913. A few weeks ago the Fed and the Treasury extended the lending window to investment brokers.
What the banks need is money, not insurance. They need capital. If the dubious mortgage bonds and derivatives they hold as part of their capital base turn out to be worth pennies on the dollar, or nothing at all (either way, a virtual certainty), the crisis continues and risks getting far worse as public confidence in the banks worsens. As it is, hundreds of smaller banks are on the brink of failure. A run on one or more of them could cause a chain-reaction bank failure. This is the next shoe to drop.
The bad loans and securities need to be taken right off the balance sheets of these firms. That's the only way to get rid of the problem.
What the Neocons can't stand is the idea that the government will take shares or warrants (exchangeable for shares) in firms that make up a big chunk of the financial industry. The US Treasury now owns 80% of AIG, the world's biggest insurance company. To the clones at the think tanks, that's communism. They'd rather see a crash and another depression.
VietVet8666 @ 8:
These assets that the Republicans are talking about insuring have already failed. This would be the equivellant of taking out homeowners insurance, after the house has burned down. Right now the U.S. Government and the taxpayers are liable for up to $100,000 per failed bank account. This is going to cost the taxpayers a lot of money already. Why should the taxpayers take on any more liability at this point?
Insurance? Another scam designed to flow zillions of dollars to the pockets of the people administering it in way of fees.
The people administering this insurance apparatus will be the same damn fat cats who are benefiting from the bailout. Every premium, every transaction will have a fee, a fee that goes into GOP friends and cronies' pockets.
It represents a huge stream of revenue to the people that handle the transactions. That's why these GOP pigs want it.
In other words, it's a double giveaway to the assholes who made this shitpile in the first place.
upchuck @ 19:
Seems he forgot that AIG was one of the worlds largest insurers and now we are propping them up Too!
constituent @ 1:
The Democrats are fully on board with this plan.
Voting for McCain was already out of the question, but now I don't know if I can vote Democrat either. It seems that my options are not voting and voting 3rd party.
I had hopes that Obama would actually be something other than a politician. Foolish me.
EJG @ 5:
http://www.c-span.org/
A very good analysis. The only point to insurance is to distribute risk. Who can tell us the magnitude of the risk? No one of course. Let me guess who'll be providing the pool of capital to payout the insurance claims.
constituent @ 15:
Most of Wall St. supports Obama. He's their boy.
Warren Buffet supported the original Paulson plan too.
Don't let Bush scare you again. There is no crisis that must be dealt with immediately. These Wall St. assholes have known their little Ponzi schemes would dry up for a couple of years now. They saw this coming and they don't need any "bailout." I keep having to remind people that these "debts" are mostly bets. All these banks owe each other billions just because they say they do.
It's like you and I both say (by contract) that we owe each other $1 billion because we both lost bets with each other. Then, when we don't each have a billion dollars to pay, we get the government to "bail" us out of our "crisis."
It's a scam.
Don't let the Bush boys fool you again.
OT But speaking of booty from heaven:
Somali Pirates' Unexpected Booty: Russian Tanks
33 T-72 battle tanks
Excellent suggestion:
Thom Hartmann: How Wall Street Can Bail Itself Out Without Destroying The Dollar
Excellent analysis:
Walden Bello: Wall Street Meltdown Primer
What I see is the same bunch of fuckin' crooks who tried a swindle by getting us to gamble our social security on Wall St. and since that didn't work they are now just coming straight at us and mugging us for $700billion...to give to Wall St (and I even have my doubts about THAT).
I mean, one way or the other, these (I don't know a filthy enough invective for them!) scumbags were going to get one more big chunk before they leave and HERE IT IS.
Hey, everybody: feel that sharp pressure at the small of your back? That's a pistol held by your current government run by neocons and they'll be your mugger for tonight. Have a nice day!
#18 got it right. The Republican plan is wolf in sheep's clothing. It would have the government own the downside risk while giving the same scum bags that caused the problem all the potential profit -- and they'd like capital gains on those profits to be lowered as part of the plan too, thank you.
The Paulson plan will make money if they price the securities in question appropriately. Stop calling it a bailout. This is not a bailout. The government is buying securities that will recover in value as long as the system doesn't completely fall apart. Don't get confused by people calling this a bailout of Wall Street.
Supporting this deal doesn't preclude the government from going after those that caused the problem. This is the best hope of maintaining our financial system and keeping the country from coming to a screeching halt.
There is plenty of time to legislate away all the hedge funds and greedy bankers that got us here.
The whole banking system relys on faith -- there is nothing supporting the dollar other than the faith and credit of the gov't. Don't lose faith now - get behind the plan, get Obama in office, and get ready for a recovery based on a massive effort to build new technologies and infrastructure that support alternative energy.
What about homeowners who have already lost their homes to foreclosure or just abandoned them, is there any way to help them? I don't see how. My neighborhood is littered all over with homes that have been empty for a long time and the grass is growing up around them. There are "for lease" and "for sale" signs all over in the business district. Restaurants are dropping like flies, even chain restaurants. Businesses are literally here today and gone tomorrow. How is this bailout going to help people who have bad or horrible credit ratings due to the crash of the housing market? I'm not being snarky or anything, I just don't see what can help these people.
Hopeful in Chicago @ 28:
The credit markets work on faith? Well, this must be another one of Bush's 'faith based initiatives' then. And it appears to be working just as well...
Rasputin @ 21:
You guys are, of course, right. Which goes to the central issue. We are not in a liquidity crisis. There is, quite simply, for the evil fucks, a valuation problem. Insurance companies, btw, are the best experts at sorting out risk. That's what they do.
That Republican plan has never made sense to me. They want the Government to insure bad debt which investors and financial institutions already hold and make those same groups pay a premium on top of it? The situation will remain the same and could possibly become even worse. Basically, that idea is basically saying the Government will do nothing.
Then, they state that private capital needs to come into the financial markets. How? Even if they remove tax barriers and other regulations there still is no guarantee those institutions won't fail and take that private capital down with them.
I can go on and on. The funniest idea is the very last one though. Create a blue ribbon panel of treasury, the Fed, SEC and others to provide recommendations. Thats a laugh! These are the same agencies that missed and/or allowed the entire thing to happen in the first place!
I had the following e-mailed to me today and this makes much more sense than giving the crooks on Wall St. all of this money.
I’m against the $85,000,000,000.00 bailout of AIG.
Instead, I’m in favor of giving $85,000,000,000 to America in
a We Deserve It Dividend.
To make the math simple, let’s assume there are 200,000,000
bonafide U.S. Citizens 18+.
Our population is about 301,000,000 +/- counting every man, woman
and child. So 200,000,000 might be a fair stab at adults 18 and up..
So divide 200 million adults 18+ into $85 billon that equals $425,000.00.
My plan is to give $425,000 to every person 18+ as a
We Deserve It Dividend.
Of course, it would NOT be tax free.
So let’s assume a tax rate of 30%.
Every individua l 18+ has to pay $127,500.00 in taxes.
That sends $25,500,000,000 right back to Uncle Sam.
But it means that every adult 18+ has $297,500.00 in their pocket.
A husband and wife has $595,000.00.
What would you do with $297,500.00 to $595,000.00 in your family?
Pay off your mortgage – housing crisis solved.
Repay college loans – what a great boost to new grad s
Put away money for college – it’ll be there
Save in a bank – create money to loan to entrepreneurs.
Buy a new car – create jobs
Invest in the market – capital drives growth
Pay for your parent’s medical insurance – health care improves
Enable Deadbeat Dads to come clean – or else
Remember this is for every adult U S Citizen 18+ including the folks
who lost their jobs at Lehman Brothers and every other company
that is cutting back. And of course, for those serving in our Armed Forces.
If we’re going to re-distribute wealth let’s really do it...instead of trickling out
a puny $1000.00 ( “vote buy” ) economic incentive that is being proposed by one of our candidates for President.
If we’ re going to do an $85 billion bailout, let’s bail out every adult U S Citizen 18+!
As for AIG – liquidate it.
Sell off its parts.
Let American General go back to being American General.
Sell off the real estate.
Let the private sector bargain hunters cut it up and clean it up.
Here’s my rationale. We deserve it and AIG doesn’t.
Sure it’s a crazy idea that can “never work.”
But can you imagine the Coast-To-Coast Block Party!
How do you spell Economic Boom?
I trust my fellow adult Americans to know how to use the $85 Billion
We Deserve It Dividend more than I do the geniuses at AIG or in Washington DC .
And remember, The Birk plan only really costs $59.5 Billion because $25.5 Billion is returned
instantly in taxes to Uncle Sam.
Ahhh...I feel so much better getting that off my chest.
Kindest personal regards,
PS: Feel free to pass this along to your pals as it’s either good for a laugh
or a tear or a very sobering thought on how to best use $85 Billion!!
lawl. He's off by a few orders of magnitude, but I like the moxy.
ontheleftcoast @ 30:
Maybe I wasn't clear... but yes, when economies collapse it is usually because people have lost all faith in the soundness of the system -- A sound financial system requires faith that when you put your money into a bank you'll be able to get it back out. The strongest bank in the world would still collapse in a day if enough people lost faith in their ability to get their money out.
The credit markets are now frozen because so many banks have assets on their books they have been forced to mark to extremely low values, those loses are forcing the banks to hold onto the cash they have left, and they aren't lending it out. These assets are currently marked much lower than they will likely be worth once this crisis is past, and the economy recovers.
Ask yourself this -- if this is such a rotten deal why do Warren Buffet and Bill Gross (world's largest bond manager) want to participate alongside the U.S. gov't?
Go after the guys that created the problem - but don't blow up the whole system just because you're pissed off at the guys that caused the problem -- if done correctly they won't be the one's profiting from this deal.
dothehop @ 33:
85 billion divided by 200 million is 425.
Sorry, you need a new slide rule!
If you can delay any vote or bill before Oct 1st, then it goes into the next fiscal year. Emergency legislation in late September is exactly as planned. The deadline for something must be Setp 30th.
If Bush can attach another $500B to FY08, then the blame for FY09 goes to Obama.
This is a hand-grenade being turned over to Obama with the pin pulled. Poppy Bush pulled the same thing in Dec 1992 when he sent US troops into Somalia after the election.
If a few big boys go under, let 'em. The Oil Industry and Saudi's have all the money. Why are they not investing in the banking industry. Would seem to me that a solid banking industry is necessary for the oil industry to flourish. Why the taxpayers again? Nothing is going to take a total shit between now and January. If it does, then so be it. Survival of the strongest. There will be mergers and consolidation, just like the airline industry. Losses will occur, profits will be made. Cash is king.
the repigs are the most disrepectful bunch of BASTARDS
they are so intent on destroying this country, they are
willing to completely sellout the American taxpayers.
the repigs like bush want smaller govt involvement from
the govt, but why is it that everytime they take charge and
get power over the govt, they run the national debt up
higher than it has ever been. they don't believe in
social programs that will help middle-America taxpayers
but as evidenced with this fucking banking bailout,
they sure don't socialized slavery of the taxpayers to
enrich themselves and their neocon corporate fascist buddies.
Why in the world would anybody listen to any way, shape, or form type of GOP strategy?....
After all we have been through....deregulation of sound government oversight...wars in Iraq, in Afghanistan....FISA....why do we need a stinking Constitution....etc....
Geesh....
Now this....the economy is crashing on our heads.....
That the GOP even submitted a "plan" considering their past track record is beyond audacious....
Damn....
Lots of comments blaming the criminals in the Republican party without any hint that it will the the majority of Democrats who will vote in favor of this bailout.
Elections are nothing but picking your poisen anymore.
Rudy Giuliani's is positioning his law firm to cash in on Wall Street's train wreck
http://www.nydailynews.com/news/politics/2008/09/25/2008-09-25_rudy_giul...
AND Rudy has been traveling with McCain on his jet since they left DC.
SwingingJohnson @ 41:
Like a fly to a pile of sh!t.
I think it is time to use Arecibo to beam a message to outer space, asking if any benevolent, advanced race is available to invade the Earth and take over its administration. Even Klingons would be better than BushCo or its most likely successor.
The best course of action would be to let the companies that own the toxic "assets" go under and spend the proposed $700B on a multitude of public works programs, education, health care, etc. Yes, thousands of people will lose their jobs; but thousands of jobs will be created.
Real estate value should be allowed to descend to whatever level is necessary - i.e., until someone is willing to buy it. Remember, homes are being bought and sold every single day in the midst of this "crisis" and somehow lending institutions are able to value them for mortgage purposes. So things can't be nearly as bad as they are being made out to be in Washington.
No, the Paulson proposal -even modified by Congress - is outright theft of taxpayer money to give to people who should be going to jail not being given another chance to do what they do so well - steal.
The Democrats, in agreeing to work with Paulson and the Bush regime, have shown themselves fully complicit in maintaining some vestige of the status quo while providing a few sops - however needed - to keep their constituents from driving to Washington and hanging them from lampposts.
Meet the New Boss @ 44:
Thank you. It's like I'm talking to myself over here.
Eric Cantor, total right wing pro-business fanatic from Richmond VA is married to Diana Cantor, investment banker. Cantor is my congressman. He votes ONLY for corporate interests and gets an "F" on his voting record for middle class taxpayers.
He's voted repeatedly against S-CHIP and funding alternative energy sources.
So...if Eric Cantor is so opposed to so many groups of Americans, just who likes him. Well, let's look at the top four sources of funding for Cantor:
Real Estate: $208,047
Insurance: $168,665
Securities & Investment: $145,150
Lawyers/Law Firms: $135,75
He cannot be trusted for one second to help out the middle class. As soon as I saw this smarmy weasel's name on the plan, I knew it was for his corporate buddies.
Jake Blues @ 22:
YOUR wrong....initial proposal was paulson and BUSH
mccain hasn't commited to anthing. there are conservative republicans that don't want this but their plan won't work either. warren buffet said it's needed and could make the public money if done properly. the democrats don't have the votes to do it on their own PLUS they don't want to do it on their own. you don't know what you are talking about. obama wants to make sure public tax payers are protected. some people are showing they are falling for the politics
and hyperbole.
Jake Blues @ 22:
seems that a vote from you is not well thought out and
is a lose lose lose for everyone. granted the two party
system is not the best and that you don't get everything
you want from either, but. when did you have everything
that is right for everyone........are you perfect? even god
does not have or give a 100% guarantee that everyone
will be happy with his decisions. if you believe in god.
look at history......NO ONE IS PERFECT INCLUDING THE ONE UP THERE!!!!
RoRo @ 2:
Here, here!!
a government audit report done by the office of inspector
general was released today. it's an audit regarding the SEC and how it handle the bear sterns firm.
risk assessment,audits, and auditing of quarterly
filings.......audits were random and sporatic.
they also used an inside auditor instead of a non bias
auditor. there is info on cncbc about this. won't see
much about this on media.
Meet the New Boss @ 44:
Those are some good options. I would also add that some of that $700 billion could go towards infrastructure and manufacturing. These along with education, health care and so on are what America was built on. It wasn't built on Wall Street contracts.
short video report.
office of inspector general office blames regulators for
Bear Stearns
http://www.cnbc.com/id/15840232?video=868666144&play=1
Get the 700 billions bailout package done. Then, Obama should tax the crap out of every fucking millionaire in the US. After all, I'm pretty sure, that package deal is going to end up in their pockets...again.
although maybe different reasons BOTH parties don't
like this 'bailout'. paulson and rush gave their proposal
democrats made changes that both parties want NOW.
control spending of the money
CEO compensation changes 'golden parachute'
public profit...warrants
before mccain came into the picture it was moving along. i don't want a bailout for what think is due to greed and deregulation.....this is much more than foreclosure. that's the simple explaination that the public can understand.
the bottomline this must be very serious. the market could slide very quickly......maybe that's needed but
maybe it can't handle it.
sounds like more privatizing profits and socializing losses to me. It sounds like they want the oprotunity (SIC) to hold on to their hand as long as possible without having to call or raise. This way if the toxicity is low and the value is high they get it, but if the value is in the tank later they get bailed out at a later date. I smell something fishy, either bail them out or don't, the Repubs are playing big games with this one, they are determined to make this an October suprise for McCain. Part of me wants no bailout and lay it at the feet of the Repubs and move on, life goes on, it went on after 9/11 it went on after the Bubonic plague it will go on if Wall Street tanks, it will go on if millions lose their jobs.
VietVet8666 @ 8:
I think this thing is being rushed through too fast to get good underwriting information on what may be uninsureable assets.
this is let's make a deal and we do not know what is behind the door.
VietVet8666 @ 31:
But there is the rub... we are in a liquidity crisis....
http://www.ft.com/cms/s/0/dec5d55a-8b2a-11dd-b634-0000779fd18c.html
In short... the banks are lying sacks of shit weasels... they know it and they know all the other banks are weasels too
Back in August when they all got caught with their "subprime knickers" pulled down, they all looked at their balance sheets and realized that they sucked and they needed to raise capital.
So the banks began refusing to loan money to each other or to companies and they began to look for ways out of existing contracts.
The Fed got involved and began bailing them out, providing low rate loans, providing extremely low rate loans even to hedge funds, bailing out Bear Stearns... AIG.... and so forth.
The Fed hoped that this would get the banks to start lending again... but the banks, those lying shit weasels... knowing that all the rest of them are lying shit weasels and all of them are lying about what is on their books... still won't loan any money to anyone... they are just sitting on the cash.
That is why the Paulson Plan is not seen as being able to solve the problem... it is more of the same.
There is a solution though... take the money that they are proposing and don't give it to the banks... set up a National Investment Bank to solve the liquidity problem and let the Wall Street crowd auger in with all the bad paper they sold.
This was written by a foreign investment banker who hates the Wall Street crowd and he makes a lot of sense. What he is advocating is screw the "trickle down" crap and get the capital where it is needed and let Wall Street drown in it's own greed and stupidity.
http://www.dailykos.com/story/2008/9/26/84724/5166
The precedent for this was the Resolution Trust corporation that was created to solve the S&L crisis and Home Owners Loan Corporation of the 1930’s.
In both cases taxpayers were able to recover most of the money that was used to create them and in many cases a profit was shown. I say save the real economy and let the Street Assholes Burn!
pissed off patricia @ 29:
I'm sure in a world of increasingly limited credit and tons of folks with bad credit,
we'll all do just fine!
I like #57's proposal.
Here are a few facts apparently missing in most of the talks about this false crisis:
1. The real root cause of mortgage foreclosures is the fact that the mortgage holder can not pay the mortgage (DUH!).
2.The reason MOST mortgagee's can not pay the mortgage is that they don't have the money to pay the mortgage.
3. The reason MOST mortgagee's don't have the money is be cause they are either unemployed or seriously under-employed.
4. The reason people are unemployed or under-employed is the off-shoring, out-sourcing, H-1b/LI visa and slave immigrant labor practices of the last 8 years.
Now we see the REAL problem - no jobs! Duh!
How to get the country back on track:
1. Revoke all H-1b/L1 visas in 30 days automatically - save a small percentage that meet draconian requirements (<5% of the 700,000 current outstanding).
2. Tax all firms for any items that they import into the US that were previously made within the US (during the last 10 years) the equivalent amount being lost to the economy from the resultant unemployment. Tax any company utilizing any off-shore resources the difference between US wage and actual expenditures.
3. Eliminate the Import/Export Bank immediately.
4. Tax deductions for companies that invest in domestic manufacturing, energy independence technologies, green technologies, and public infrastructure.
5. Tax credits for hiring US Citizens.
6. 100% enforcement of all employment citizenship requirements and increasing penalties 10 fold.
7. Repeal NATFA and any other trade agreement with any nation that does not mandate and enforce reciprocal wage, workplace or social benefits equal to US laws.
Put these changes in effect and see the most dramatic economic turn around in 70 years. And it wouldn't take very long!!!
One way to fix the economy is to declare all delinquent home mortgages fully paid and transfer full ownership free and clear to the mortgagees. Suddenly, millions of people would find themselves free of mortgage payments, their only payments would be property tax and insurance. Now they have more spending money to pump up the economy and can afford to pay a slightly higher tax rate. Because the insurance companies are part of the problem, the insurance industry should be nationalized and financed by everyone via taxes. With the profit-motivated capitalist parasites out of the picture, everyone would pay much less for homeowners, health, and vehicle insurance.
The companies that have been run into the ground by greedy, incompetent capitalist parasites should be allowed to vanish. All their tangible assets such as property owned should be sold and the money should be deposited into the general U.S. tax fund. The capitalist parasites who destroyed those companies and our economy should be prosecuted and executed--or in the very least, be sentenced to prison chain gangs repairing our highways and other elements of our infrastructure for the remainder of their lives. All their personal assets should be sold and the money deposited into the general U.S. tax fund. Their minor children should be sent to Iraq to be permanently adopted and raised by the parents of Iraqi children who were murdered by Bush and the Republicans.
Income taxes should be raised to 60% of the income of all persons within the top 3% income. All income taxes should be at a flat rate with no deductions allowed. Employed people would never again be required to file a tax return; taxes would be automatically deducted and paid by their employers.
Law needs to be enacted making it illegal for any executive of any company to be paid more that 20 times the amount of the annual salary of the lowest paid employee. Violators should be sentenced to life on prison work gangs along with all those corporate or private individuals who exploit and hire illegal aliens.
Another needed law would make it illegal to charge or pay more that 2% interest on any loan, investment or deposit. The entire banking, savings and loan industry would be nationalized, the profit-motivated capitalist parasites would be removed permanently.
One more law would make it illegal to export any job outside of the United States, and would require importers to pay tariff on all products.
Problem solved. Economy healed. Sociopaths imprisoned.
david blimmo @ 62:
A lesson from History...
The Home Owners' Loan Corporation (HOLC) or Home Owner's Refinancing Act, was a New Deal agency established in 1933 under President Franklin D. Roosevelt. Its purpose was to refinance homes to prevent foreclosure. It was used to extend loans from shorter loans to fully amortized, longer term loans (typically 20-25 years). Through its work it granted long term mortgages to over a million people facing the loss of their homes. The HOLC stopped lending circa 1935, once all the available capital had been spent. HOLC was only applicable to nonfarm homes, worth less than $20,000. HOLC also assisted mortgage lenders by refinancing problematic loans and increasing the institutions liquidity. When the HOLC ended its operations and liquidated assets in 1951, HOLC turned a small profit.[1][2]
I say let them lie in the bed they made. Why should anyone bail them out.
PIGS FLY!
I laughed my ass off watching Gingrich disagree with every point Angry O'Rpheus made tonight on the Fracture on the bail out. Gingrich actually has a financial head on him. O'Rpheus was for the bail out, Gingrich was not and went on to school O'Rpheus how you don't fix bad debt with more bad debt. About the only thing they agreed on was oversight was needed.
LMAO!
This"plan" is nothing but a calculated ripoff of the USA. Watch closely as billions of dollars mysteriously "disappear", with no or faulty oversight, to surface in the BUSH FAMILY COFFERS. That´s part of the Paraguay Plan. Talk about theft on a grand Scale!!!
This COULD have been a defining moment for the Democratic Party, but they have blown it.
I would rather see that Wall Street get NO BAIL-OUT and a somewhat deeper (but shorter) recession, than Yet-Another-Corporate-Welfare-Taxpayer-Funded Folly. The Republicans have been busy for 30+ years trying to shrink and emasculate regulatory governance. Of course, R. Reagan didn't practice what he preached, and government (mostly military) ballooned way out of control. Wall Street doesn't deserve a bail-out, the CEOs and Board members that have taken truly titanic SALARY + BONUSES + GOLDEN PARACHUTES while ordinary shareholders have been left holding the empty sack deserve imprisonment AND seizure of ALL ASSETS to make the ordinary shareholders "whole".
Wall Street and the markets will "self-correct" on their own, without the $700 Billion taxpayer funded "GIFT" that GWBush and Paulson want to bestow on Wall Street. A far better use for that huge mound of SWAG would be to establish a Federally mandated "Lender of Last Resort" with competitive rates against conservatively valued collateral, available to home-owners, main street bankers, and small businesses.
Barring that, then our government is obliged to provide the greatest benefit to the greatest NUMBER of its citizens, and NOT the smallest number of its RICHEST (and often not) citizens. The Swedish model for the reconstruction of their financial meltdown, circa 1982, provides the BEST model for adoption here in the USA for THIS "crisis". Otherwise, I say F*** THEM ALL.
The Bush/Paulson proposal (or ANY variation thereof) is tantamount to the complete and utter destruction of America's Middle Class (and Poor). It is also the death-knell of freedom and democracy in the USA, having been usurped completely by Corporate Socialism (aka National Socialism, aka Fascism). I would rather see a bit of revolution in the streets in this country than see the USA slip into THAT form of government.
I cannot provide attribution to the following, since I am pretty sure it is paraphrased:
"A patriot must be ever vigilant to defend his country from its government."
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