Tag: Taxpayers

Do You Truly Know The Cost Of All The Economic Moves?

Does anyone in the sound of my voice truly understand what all this dancing in Washington is gonna cost you? But you I mean the American people. You have heard that some want to protect the taxpayer and some want the markets to do the adjusting, but what will this package cost the American taxpayer?

Remember when I say you I am talking about the American taxpayer.

.Both parties agree on one fundamental principle: The American people will have no say whatsoever in an arrangement that will compel them to pay for the losses of bankers and speculators who created the financial disaster. That is the content of the demand on all sides that “politics” be kept out of the bailout talks.

If America were a democracy in any meaningful sense of the term, it would be considered obligatory to have a full discussion and debate in the course of an election campaign over plans to raid the federal treasury and mortgage future generations to guarantee the riches of the financial elite.

But if the bailout were on the ballot November 4, the voters would repudiate it overwhelmingly. It is precisely because of this opposition that the conspirators of both parties are seeking to reach an agreement this weekend, preempting the issue and depriving the American public of any say in a decision that will profoundly affect the future course of the country.

The Democratic Party, as the past week’s events have clearly demonstrated, is the servant of Wall Street. Long gone are the days when liberal Democrats postured as opponents of the moneyed interests.

There is virtual unanimity among the Democrats on the need to bail out Wall Street and grant the treasury secretary full authority to deal with the crisis in the credit markets. The Democrats privately welcome the opportunity to implement the plan before the elections, in order to provide an all-purpose excuse for an Obama administration to abandon its campaign promises and implement austerity policies.

The financial crisis has demonstrated the economic failure of the capitalist system and the bankruptcy of its political structure. There is no way for the interests and concerns of working people to find genuine expression through the two big business parties.

YOU, the American taxpayer will be paying for this one way or another.  Your pay will only go so far and that distance is getting smaller and smaller.  Your children will also be paying for this economic dance.  And now even your grandchildren will be paupers because of it.  Do you really feel that you are getting your money’s worth out of this damn system?  I am sorry, but this system is broken.

“The Party Is Over”

Let me repeat that..”The Party is over”….words uttered by Pelosi on the bailout deal over the weenend.  Now question is, HUH?  Where is this true?  Whose party?  For Wall Street?  Now that is a crock of crap!  Wall Street is not paying for anything that they screwed up.  I would say that as soon as the bill passes the party will have just begun on Wall Street.

I heard other great lines pertaining to the bailout, like “All has been met” and “Everyone is satisfied”.  Now who are they talking about.  The millionaires in Washington helping out the millionaires on Wall Street?  This is silly!  Opposition from Main Street against the bailout has been humongous, about 100 to 1 against the bailout.  So where is everyone satisfied?  I guess everyone is referring to millionaire Congress, Wall Street and the Prez, apparently those are the only people that this democracy cares about.

Then yes, the party is over!  The taxpayer will be left to clean up the vomit from Washington and fron Wall Street.

But wait!  The bailout failed in the House Of Representatives, the markets droopped near 800 pts, then yes the party is over and Washington is broken.  It is a crisis of leadership, no one could deliver the  votes for the bailout.  Of course, those that voted against it will say the people have spoken.  Well that could be, but it is election time, so they have to be listened to if they want to return to Washington to play the game one more time.

But in reality it is just politics as usual and the people are the furtherest thing from their minds.  Have you noticed when they talk about the bailout it is always to stabilize the markets and then to protect the people.  That alone should tell you where their priorities lie.

Are The American People Behind This Bailout?

The easiest and quickest answer is–NO! They are not!

This crisis has opened the door for McCain and right-wing House Republicans to posture as opponents of Wall Street and identify themselves with massive popular opposition to the bailout. The faction of House Republicans who have denounced the measure represents right-wing libertarian elements within the party who identify social spending and government intervention in the capitalist “free market” with what they consider the ultimate evil—socialism. They base themselves on appeals primarily to middle class layers, utilizing anti-tax and nationalist demagogy as their stock in trade.

In opposing the bailout, they are, moreover, responding to bitter opposition to the windfall for Wall Street among their constituents. The media and politicians of both parties have acknowledged that there is massive popular opposition to the bailout scheme.

The Los Angeles Times on Thursday called the proposal “wildly unpopular.” The New York Times reported that the “delicate” negotiations between Paulson and congressional leaders were “complicated” by pressure on rank-and-file legislators “who were fielding torrents of complaints from constituents furious that their own money was going to be spent to clear up a mess created by high-paid financial executives.”

The newspaper gave several examples of lawmakers who have been inundated with hostile emails and phone calls over the past week. “Senator Barbara Boxer, Democrat of California,” it noted, “has received nearly 17,000 email messages, nearly all opposed to the bailout, her office said. More than 2,000 constituents called Ms. Boxer’s California office on Tuesday alone; just 40 favored the bailout. Her Washington office received 918 calls. Just one supported the rescue plan.

“Senator Sherrod Brown, Democrat of Ohio, said he had been getting 2,000 email messages and telephone calls a day, roughly 85 percent opposed.”

What neither the media nor the politicians have pointed out is the brazen violation of any conception of democracy, even by the eviscerated and restricted standards of the American two-party system, represented by the enactment of such a momentous measure, which will impose massive burdens on the American people for decades to come, on the eve of a national election by a lame duck president and a Congress nearing the end of its tenure.

The Democrats’ rush to pass the bailout is driven by the most cynical calculations. They want the decision to be taken before the November elections, so that in the event they win, an Obama administration, with an increased Democratic majority in both houses of Congress, can claim that its hands are tied and it has no alternative but to pursue a right-wing policy of austerity, including savage cuts in social spending.

Then will the American voter take this disregard of their wishes to heart and vote these people out of office?

What Does The Bailout Really Say?

We are listening to the news and see that Wall Street is set to be bailed out of there current problems, but what does the plan really say?  Just thought, for those who want to know, here is the wording:

The text of the four-page “Legislative Proposal for Treasury Authority to Purchase Mortgage-Related Assets,” published Saturday by the New York Times, reveals the profoundly anti-democratic and open-ended nature of the scheme.

The first provision establishes the unlimited and unilateral authority of the Treasury secretary, an unelected official, to order the use of taxpayer funds to purchase whatever “mortgage-related” securities, at whatever price, at whatever amount and from whatever financial institutions he chooses.

It states that the secretary—currently Henry Paulson, the multi-millionaire former CEO of Goldman Sachs—is “authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by the secretary, mortgage-related assets from any financial institution…”

This is followed by a provision stipulating that the Treasury secretary’s authority under the act is “without limitation.”

A further provision authorizes the Treasury secretary to enter into contracts with the banks “without regard to any other provision of law regarding public contracts.” In other words, to ignore established law concerning public contracts.

The proposal states that the government will designate “financial institutions” to operate the bailout program. This means that the government will hand over management of the program to some of the very corporations that are responsible for the crisis and which stand to profit directly or indirectly from the bailout.

Congress, under the proposal, will be relegated to receiving semi-annual reports from the Treasury Department. It will have no real power of oversight or control.

The proposal gives the Treasury secretary unchecked authority to resell assets the department has taken off of the hands of the banks. This means that the banks will profit on both ends of the deal—they will be relieved of massive debts and will then be able to buy back the securities at fire-sale prices after the housing market has restabilized.

The text states that the Treasury secretary’s authority to purchase mortgage-related assets will be limited to $700 billion “at any one time.” In other words, he will be able to buy more worthless assets after having sold back some of those previously purchased—rendering the supposed $700 billion limit fictitious.

Under “Termination of Authority,” the proposal declares a two-year limit, but includes certain exemptions that will, in practice, enable the Treasury to extend the duration of the program indefinitely.

The proposal calls for a $700 billion increase in the statutory limit on the national debt, raising it to $11.315 trillion.

It then defines “mortgage-related assets” so broadly as to potentially cover everything from trillions of dollars in bonds to the estimated $62 trillion unregulated market in so-called “credit default swaps.”

Perhaps the most extraordinary provision reads as follows: “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.”

Now you have the wording of the plan….you decide who it benefits and who it screws.

Yet Another Bailout

Following emergency consultations between the Federal Reserve, the US Treasury and the Democratic leaders of both houses of Congress, the Federal Reserve on Tuesday night announced a bailout of the Wall Street insurance giant American International Group (AIG).

According to reports posted by the New York Times and the Wall Street Journal, under the emergency plan the Fed will provide the failing firm with an $85 billion loan in exchange for 80 percent of its assets.

The bailout is one more demonstration of the systemic crisis confronting American and world capitalism. It is unprecedented and, in some respects, goes even further than the government takeover of Fannie Mae and Freddie Mac barely a week before. Unlike the two mortgage finance giants, AIG is not a government-sponsored institution and is not even directly regulated by the federal government.

Pressure for a rescue of AIG grew after all three major rating agencies downgraded its credit Monday night, raising the prospect that lenders would recall their loans.

It was feared that the failure of AIG, with $1 trillion in paper assets, would have a domino effect, threatening banking and corporate failures throughout the world economy. AIG is one of the largest players in the global, unregulated market (estimated at $62 trillion) in credit default swaps, i.e., private contracts under which companies like AIG guarantee the debt, including mortgage-backed bonds, held by other companies.

The newspaper warned ominously, “More major bank failures are a certainty, including some very large ones.”

Its solution? The setting up of a new Resolution Trust Corporation, of the type created during the savings and loan crisis of the 1980s, which would “provide a buyer for securities for which there is no market.” In other words, the US Treasury’s vaults should be opened up to bail out major Wall Street investors and CEOs who made billions off of a speculative housing bubble that has now burst, precipitating the greatest financial crisis since the 1930s and threatening millions of working people with the loss of their jobs and homes.

This Is For All You Commie Haters

I remember back in the day all those haters of socialism said that if it was to come to the US then all the economy would be in the hands of the government.  Remember those days?  Well, dipsticks, what do you think the bailout of Fannie and Freddie are?  Do not hurt yourself–it is a form of nationalization, something that you say the commies want to bring.  Let us begin with my favorite couple–Fannie and Freddie, poster children of corporate greed.

The Financial Times has hailed the effective takeover of Fannie Mae and Freddie Mac by the US government as “what could become the world’s biggest ever financial bail-out.” Treasury secretary Henry Paulson has promised he will pump in ‘unlimited liquidity.’ Don’t you wish the government would grant you unlimited liquidity? When it comes to the food and fuel bills of the poor and the working class, the British and American governments find that the cupboard is bare. But now it’s not bare. Predictably markets all over the world have breathed a sigh of relief. Fannie and Freddie have effectively been nationalised – and big business thoroughly approves!

In the Financial Times (08.09.08), Clive Crook comments, in an article significantly entitled ‘Nationalisation in all but name,’ “The eventual cost to taxpayers is unknown. If the housing market rallies before long, it could be in the low tens of billions of dollars. If things keep getting worse, it could be in the hundreds of billions. But Fannie and Freddie have made themselves indispensable to any housing market recovery: the cost, whatever it is, will have to be paid.”

Like it or not….my favorite couple has been nationalized.  The best part about it is that it is being done by Republicans, who for years have seen hidden commies everywhere.

Fannie And Freddie

Treasury Secretary Henry Paulson said in an interview with U.S. radio broadast on Monday that a plan to take control of Freddie Mac and Fannie Mae had been structured in a way to protect U.S. taxpayers.

He also said the move had been taken after the Treasury had found “major structural flaws” in the two agencies.

“We structured this very carefully to protect the taxpayers,” he told WAMU radio, monitored via internet in London. “And to the extent that taxpayers are going to put preferred stock into this entity it will be structured so that the first losses will be borne by the existing shareholders.”

Now ask yourself …who does this takeover really help?  They expect a 200 pt rise in the Dow….does that really help homeowners or speculators?  And at what cost to the taxpayer?  But did not Bush say that he would not bailout speculators?  Are not heavy investors in the markets, speculators, in a sense?

Candidates Tax Plans–Revisited–Obama

Obama’s tax plan skews the other way, aimed at strengthening benefits for lower-rung taxpayers and raising rates at the top. His plan would restore the Clinton-era rates for the two highest tax brackets to 36% and 39.6%

Obama would exempt seniors making less than $50,000 a year from paying any income tax. And he would make the Bush cuts permanent for poor and middle-class Americans, adding tax breaks such as a refundable credit for wage earners and a higher-education credit for students who agree to perform 100 hours of community service.

Under Obama’s plan, the highest corporate tax tier would hold at 35% — a nod to Wall Street but higher than McCain’s slashed rate. Obama would raise the highest rate on dividends and capital gains from 15% to 20%. And he would keep the estate tax in the same form approved by Congress for 2009, with an exemption for the first $3.5 million and a top tax rate of 45%. That would mean a higher tax rate on the wealthy than McCain would allow.

As for the onerous alternative minimum tax, both candidates would allow more than 23 million middle-class taxpayers to avoid it by extending a 2007 “patch” that raises the amount of income triggering the AMT. In 2007, the AMT was triggered at $44,350 for single taxpayers and $66,250 for those filing jointly. McCain would increase that income trigger each year by 5%, starting in 2013; Obama would index it for inflation to maintain the patch.
Conservative economists caution that Obama’s tax hikes on the wealthy and corporations would increase the drag on the sluggish economy. “It would lead to disincentives for savings and productivity,” said Alan D. Viard, a former senior economist at the Federal Reserve Bank of Dallas who is now a resident scholar at the conservative American Enterprise Institute. “Over time, it would mean less capital accumulated and would ultimately force wages lower.”

Now the voter has an overview of both candidates tax plans…please use the info to make an informed decision.

Candidates Tax Plans–Revisited–McCain First

A close look at their proposals shows that the differences fall neatly along the traditional policy gulf that has long divided Republicans and Democrats: liberating the wealthy with tax cuts to stimulate the nation’s prosperity versus raising their rates to redistribute the tax burden and pay for crucial government programs.

Both candidates have promised to balance their tax relief programs with budget cuts designed to trim soaring deficits. But the Tax Policy Center has warned that both plans — coupled with the candidates’ high-cost healthcare proposals — would balloon the $9.6-trillion national debt. The center’s analysis reported that McCain’s tax proposals would add $5 trillion to the debt over the next 10 years, while Obama’s would add $3.6 trillion.

McCain’s plan would cater to wealthy taxpayers and corporations by extending and expanding President Bush’s tax cuts, slashing corporate taxes and weakening the estate tax, but it would also aid taxpayers across the board by making the full Bush cuts permanent.

A deficit hawk and formerly a critic of the massive tax cuts launched in 2001 by the Bush administration, McCain now embraces the tax policies of supply-side economists who contend that lifting the tax yoke on the rich would encourage investment and stimulate the economy. “Wealth creates wealth,” McCain said during a primary debate in Michigan last year.
McCain also has proposed a sharp reduction in corporate taxes. He would pare the two highest corporate tax brackets, 34% and 35%, down to 25%. The top bracket would be immediately eliminated, and the 34% bracket would be phased down to 25% between 2009 and 2014.

He would also maintain the 15% tax rates on dividends and capital gains for the highest-tier taxpayers. And starting in 2010, McCain would substantially reduce the estate tax. He would increase the exemption on inherited funds from $3.5 million to $5 million and sharply lower taxes on remaining wealth from 45% to 15% — moves that would enable affluent families to hold on to more of their wealth.

Democratic-leaning economists say McCain’s plan offers little new aid to squeezed middle-class families. And they question whether corporations and wealthy Americans would convert McCain-era tax savings into new investments that would bolster the economy.

Obama Needs The Rich

Barack Obama’s ambitious plan to take roughly $131 billion from your bulging pockets so that he can keep taxes low and refunds high for the middle class on down.

Obama wants to hike taxes to Clinton-administration levels, lifting the top marginal rate to 39.6% versus 35% today, for roughly 5.6 million wealthy tax filers. “Wealthy,” in Obama-speak, covers filers reporting income of $250,000 or more. The hike on this gilded army, which is four times larger than our active-duty military, would let Obama to keep the Bush tax cuts in place for the remaining 143.7 million filers.

According to Urban-Brookings, Obama’s tax plan will increase the national debt by $3.4 trillion by 2018 if he can’t persuade Congress to significantly cut spending. Republican John McCain’s plan cuts revenue even more, and would boost the debt by $5 trillion if he doesn’t bring discretionary and entitlement spending under control. Both candidates claim they have the courage to do this.

The above is from the business publication, Barron’s.