Do we really need a “bailout?” If so, let’s actually PAY for the “bailout.”

September 25, 2008 | By | 3 Replies More

Some really good stuff at DailyKos.   Here are some much under-appreciated proposals to actually pay for the bailout.  Better yet, these include some proposals to make the people benefiting from the bailout pay for it.

Really, does it make any sense to call this a “bailout” when we are accomplishing it with borrowed money? We’re going further into hock to China to “save” our economy.   This sounds idiotic.

Check out these article by many economists pointing out that this bailout is less than necessary.

Consider, also, Ralph Nader’s approach, from this interview by Amy Goodman:

Basically, Bernanke is saying, “Well, we’re doing this because the banks are contracting their credit, and this is affecting the economy.” Well, you can deal with that problem in a far better way than an ill-defined $700 billion bailout with total authority to the Treasury Secretary, with no judicial review, with no criteria and no reforms.

In other words, the Democrats should say, if they’re going to concede this bailout, is to say, “Well, we want comprehensive regulation and disclosure of the financial industry to make sure this doesn’t happen again. We want criminal prosecution of the crooks on Wall Street and disgorgement of their ill-gotten gains. We want a securities derivative tax and higher margin requirements to make speculators use their money, more of their money than other people’s money, like worker pension funds, to keep down speculation, as well as to produce revenues, which might lighten the tax load on working families. And we want to give shareholders control over the corporations they own.”

And they’re not even talking about these kinds of reforms. And this is the best time to get these reforms, because this is called a must bill on Congress—in Congress, and if Bush wants his package, he’s going to have to sign them. So, there’s no reciprocity here. It’s the usual fairly good questions by the Democrats at the hearings, but because they don’t follow through, they don’t have adequate leadership, it becomes a kind of posturing. It’s just maddening to watch how vague Bernanke and Paulson are in answering one question after another. It’s just an evasion, where they keep saying, “We need to do it. We need to do it.” And their Chicken Little material is conducted in closed session with Harry Reid and Nancy Pelosi and the Republican leadership. It’s always in closed session.

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Erich Vieth is an attorney focusing on consumer law litigation and appellate practice. He is also a working musician and a writer, having founded Dangerous Intersection in 2006. Erich lives in the Shaw Neighborhood of St. Louis, Missouri, where he lives half-time with his two extraordinary daughters.

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  1. Erich Vieth says:

    This note on the poor state of the U.S. economy was sent to me by ThinkProgress:

    IRAQ RECESSION?: A significant reason for the current $9.6 trillion federal debt has been the Iraq war, which the U.S. largely financed through borrowing. This week, President Bush said that the crisis began after "a massive amount of money flowed into the United States from investors abroad because our country is an attractive and secure place to do business," which led to easy credit and to the housing bust. But the problem isn't simply one of excessive foreign investment because of businesses. "It's that the U.S. had to borrow money from foreign nations at an alarming rate, after it dug itself into debt paying for the Iraq War while cutting taxes," The Wonk Room observed. Thus, the United States had to turn to investment from abroad for financing. This, as well as lax regulation and oversight of Wall Street contributed to the credit troubles. Currently, 45 percent of Treasury securities are owned by foreign nations, with the most owned by China and Japan. Other nations owned less than 20 percent of these securities as recently as 1994. Bush left out of his assessment the fact that much of the foreign investment went to finance a war and his tax cuts.

    See here http://yaleglobal.yale.edu/display.article?id=106… and See this ThinkProgress article, "March 2008: Conservatives Were For Deregulation Before They Were Against It" http://wonkroom.thinkprogress.org/2008/09/19/dere

  2. Niklaus Pfirsig says:

    I think several things are needed. First, we need major tax law overhaul focusing on simplification of the current tax code. There is something seriously wrong when multi-millionaires can gamble by underwriting high risk loans, and then when the loans default, write off the loss on their tax returns, so they don't have to pay income tax, while a huge number of low income American workers who don't have the benefit of of the deductions and tax shelters, who must spend most of their money on basic needs of food, clothing, and shelter, a then hit with the bill for the excesses of the wealthy.

    I have long advocated an idea that we should have a constitutional amendment the strictly describes how elected officials are paid. My idea is this: Limit the income of any and every elected and appointed official to the mean (not median) income of the official's constituents.And I mean limit the official's income from all sources, both private and public. If the average income of a congressional district is $50,000 per year, and Congressman Bob receives $500,000 from investments, bribes and his salary, then $450.000 goes to the IRS, no deductions, no adjustments.

    The should make political positions less profitable and force those that represent the people to live within the same financial restrictions of the people.

  3. Erich Vieth says:

    Niklaus: I like your idea at a gut level, but if this were enacted, the only people running for office, I believe, would be zealots and no-nothings like Sarah Palin. http://dangerousintersection.org/2007/08/10/ameri… I also conclude this because of the damage that would be done to regular well-meaning folks and their families if they dare to run. It's just too much to expect highly competent people to give up their lives to jump into the lion's den of politics. http://dangerousintersection.org/2007/09/16/how-t

    I would rather that the system ran on clean money, rather than limited salary. Truly, to be a competent politician these days is an all-consuming affair. I don't grumble that members of Congress (at least those who haven't become totally corrupted) make in excess of $100,000. I think of Russ Feingold. http://dangerousintersection.org/2006/02/26/get-d

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