Topic: Federal Reserve Bailout
No Bailout Plan for We the People Bear Stearns, Fannie Mae, Freddie Mac, AIG, IndyMac, and many more already are directly involved in the great federal government bailout of 2008. GM, Ford, Chrysler, and the Governors Association are standing in line hoping to also get in on the bailout process.by Gary Wood
(conservative libertarian)
Saturday, November 29, 2008
We know the sales pitch as it is being used effectively from every sector. Our nation is in an economic crisis. This is not only a uniquely American problem but a world-wide emergency. Without immediate action all will be lost, all will fail while dragging the people of our nation into the deepest depression we've likely ever seen. In times of such desperate challenges there is but one answer, our federal government. Relying on the federal government to bailout all the areas necessary to avert an ever-growing crisis simply is the only answer we have for there is no other source available to stave off this emergency.
As the first $700 billion bailout plan was being rolled out we were beginning to hear connections to things we could relate to. Bernard Baumohl, chief global economist for The Economic Outlook Group, commented on the Federal Reserve and Treasury Secretary's challenges this way. "They were facing a Category 5 financial hurricane that really threatened the entire global financial architecture." There was no time to lose as the storm was quickly approaching. Bush warned, in a White House press conference, that "[w]e must act now to protect our nation's economic health from serious risk."
Those who study history remember this concept of acting now when faced with an emergency. Franklin Roosevelt used this tact when pressing for immediate passage of the Emergency Banking Act in 1933. This was the act which gave the federal government the authority to confiscate citizen's gold and all but remove us from the gold standard (completed by Richard Nixon in 1971). The emergency of the 1930s helped fuel the current emergency by allowing the federal government to institute a paper currency backed by nothing. Of course, all this was made possible with the 16th and 17th Amendment combined with the Federal Reserve Act which had been instituted 20 years before, in 1913.
Adding to the fuel is a long list of federal government actions occurring over the 75 year period from 1933 to 2008. Over that period it has been our legislatures, executives, treasury secretaries, and federal reserve chairmen who've managed to intervene in what was once a capitalist republic that flourished. Each time we have faced a crisis over the past century it has been our federal government riding to the rescue and each time we have the same results, bigger federal government without long-term fulfillment of the promises made during emergencies. What we have today are states so weak they too feel they need to request bailouts. People so scared many are willing to continually turn to the government for support. Dependency so deeply entrenched it is hard for people to comprehend any other answer but this same government that's led us to where we are today.
There are voices of warning during these periods yet most are muted. How many of you heard about the September comments from Senator Jim Bunning (R-KY) during the initial discussions on the original $700 billion dollar bailout request? At the time he said, "[t]his massive bailout is not a solution. It is financial socialism and it's un-American." In 1933 Representative Louis McFadden (R-PA) said of the Emergency Banking Act, "[i]t is a dictatorship over finance in the United States. It is complete control over the banking system in the United States." Yet their voices were not heard as clearly as those saying it is an emergency, a crisis threatening Main Street.
Perhaps it was the use of such words as socialism, dictatorship, and un-American which insured their warnings would be ignored or criticized. After all, we are not a socialist country, we are not under a dictatorship, and how can it be un-American when the spoken goal is to help Americans? Paulson himself assured us in September, "[t]his is all about the American taxpayer. That's all we care about." Since then he's proven this point as the Troubled Asset Relief Program (TARP) has spent over $350 billion and is considered largely ineffective. So ineffective there are major changes in approach, and dollar amounts, being proposed showing there was little care given to whether any of the intervention would really work to improve the economy.
If this entire emergency teaches future generations anything may it teach them the pitfalls of having no bailout plan for 'We the People' who were originally considered to be the government in the United States. Had the federal government remembered the Constitution, and the states remembered their roles, our economic well-being would be our responsibility with little interference from government. Of course, if we the people would remember the government is not some entity designed to save us but rather is us we would not be having these discussions.
A federal republic based on capitalism and sound money created one of the most prosperous, free countries in history. Our current shift to a democracy based on government intervention and paper money has destroyed that prosperity. We cannot blame the government for this change without remembering we are the government. It is our responsibility to control government and we are failing. Not only are we failing today, we are following in the footsteps of those who have failed over the last century while our children are set to follow in ours. Yet, our failure has been gradual over time, only today escalating at an alarming pace.
In 1788 James Madison gave a speech at the Virginia Convention in which he said, "I believe there are more instances of the abridgment of the freedom of the people by gradual and silent encroachments of those in power than by violent and sudden usurpations." A year earlier Jefferson provided us with these words we should listen to. "Dependence begets subservience and venality, suffocates the germ of virtue, and prepares fit tools for the designs of ambition."
Our government will not provide a plan to bailout 'We the People' because that is our responsibility. Those controlling our economic situation are not concerned with protecting Main Street as long as Main Street isn't willing to demand protection. We can start by demanding DC downsize and economic intervention stops. This will be extremely difficult because we are going to suffer, with or without all the trillions of dollars being washed away by our Category 5 financial hurricane. We must demand an end to the federal reserve system, paper money, and the blatant disregard for federal and state Constitutional responsibility no matter the emergencies being faced. "We on this continent should never forget that men first crossed the Atlantic not to find soil for their ploughs but to secure liberty for their souls." (Robert J. McCracken)
The views expressed in this
article are those of Gary Wood only and do not represent
the views of Nolan Chart, LLC or its affiliates. Gary Wood is
solely responsible for the contents of this article and is not an
employee or otherwise affiliated with Nolan Chart, LLC in his/her role as a columnist.
In my opinion, the bailouts amount to flat out robbery in broad daylight. I don't support them at all. But if our "benevolent" congress-critters want to take money from the taxpayers and hand it out to someone else wouldn't it would make more sense to give the $700 billion to the people? It would amount to $2300 for every man woman and child, $9200 for a family of four. If the object is to jump-start the economy wouldn't it make more sense to give it directly to the people rather than giving it to the crooked bankers so they can loan it to the people with interest?
Of course either way it will likely cause rapid inflation, but why pass it through the bankers first? Why give them such a sweetheart deal? (Hint: the politicians are in the pockets of the bankers?)
The bailouts to the banks accomplish so much...more growth of corporatocracy, more power to the congress critters, more wealth for the well connected...oh, that wasn't disclosed in the pitch where they were going to protect the taxpayers? Thanks for the comments and listings of contributors. It shows how much the majority in D.C. are connected to the business world that has replaced capitalism with a very sadly out of control oligarchy.
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 bona fide 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 billion 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 individual 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. Buy a second home - stimulate the economy Repay college loans - what a great boost to new grads Put away money for college - it’ll be there Pay off credit cards - more disposable income to invest or purchase goods and services - stimulate the economy Save in a bank - create money to loan to entrepreneurs. Buy a new car - create jobs Invest in the market - capital drives growth 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 Family plan only really costs $59.5 Billion because $25.5 Billion is returned instantly in taxes to Uncle Sam.
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