Another post from Daily Kos I have to agree with
Posted by Mike Sylvester - 9/22/08 @ 10:39 pm - Filed Under Uncategorized
Two posts from Daily Kos I agree with in one day.
This one is from Hunter and you should read the post.
I want to state that I am 100% against the bailout package being considered in Congress. It is absurd. It is socialist. It forces the taxpayers to bail out companies that have made massive profits and taken excessive risks.
First of all the bailout does not fix anything; instead, it forces the taxpayers to bail out companies that have made mistakes. It does not fix the core problems.
Second of all the bailout will cost the taxpayers between 700 billion and two trillion depending on the final package. I feel that it will likely cost us at least 1.2 trillion dollars so I will use that figure.
This 1.2 trillion would be used to buy up toxic debt and save Wall Street firms from imminent failure. This is what the idiots in Congress are currently considering.
I agree with Hunter over at Daily Kos. I would rather see this money printed by The Treasury and directly mailed to the taxpayers. I do not want to see a dime spent on Wall Street.
The IRS has estimated that 130 million taxpayers will get an economic stimulus payment in 2008 (Most already have it). If we were to remove the income limits and just mail new bailout stimulus payments to all taxpayers regardless of income and regardless of the number of children they have we would be sending checks to about 150 million Americans.
If we spent the same 1.2 trillion Congress wants to waste on Wall Street then each taxpayer would get a check for $8000 in the next few weeks.
Taxpayers would then take those checks and spend them.
This would most likely have a much stronger effect on the economy then what Congress is considering.
Taxpayers would most likely choose to spend their bailout stimulus checks to catch up their mortgage payments. This would allow many Americans to stay in their homes for at least a year longer. This would allow many Americans to catch up on late bills and pay some of their credit card debt. It would allow many Americans who are behind on their car payments to catch up on their car payments. This would result in Americans removed debt from their personal balance sheets and these payments would shore up the balance sheets of Wall Street firms as well.
Many Americans also would likely save some of this money and this would shore up the banking deposits and hence reserves.
This plan certainly stimulates the economy and it would put money into the banks, mortgage companies, finance companies, etc. It would also stimulate consumer spending.
Better yet this plan would send money to every voter and would not send money to those whose failed policies created this mess.
This plan is far more “fair” then what they are currently proposing. At least this way everyone gets some of the money not just Wall Street.
I prefer the bailout plan listed above to the one being considered by Congress.
That being said I 100% oppose the bailout plan being considered by Congress. I also would oppose the bailout plan listed in this post; however, it would be a far better plan then the one being considered by Congress.
If either Democrats or Republicans embraced the plan I denoted in this post and passed it through Congress they would win the next election in my opinion.
What do you think?
Mike Sylvester
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11 Responses to “Another post from Daily Kos I have to agree with”
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Mike, correct me if I’m mistaken, but if the $700B is being handed over to investors in exchange for the “bad mortgage” portfolios, then, uncle sam will become the owner of those mortgages. Isn’t that a “main street bailout” instead of a “wall street bailout”? Granted, it will free up the lenders to make more loans and absolve them of collections, but the real beneficiaries will be the mortgagee’s no? Unless of course Uncle Sam forecloses on them too.
Mike,
With all of the nutroots over at Kos, you are far better off getting your economics lessons from a real economist. My favorite is Professor Mark Perry over at Carpe Diem.
Today he writes:”This Isn’t Capitalism, It’s Corporatist Socialism: There’s Nothing Free Market About It”
The article is based upon a piece by Randy Balko, Senior Editor for Reason magazine.
http://mjperry.blogspot.com/2008/09/this-isnt-capitalism-its-corporatist.html
Mike
Upon further review, I think that Leo Morris has hit a home run with his post:
“The economic meltdown explained.”
http://openingarguments.wordpress.com/2008/09/22/the-economic-meltdown-explained/
Mike,
This should be the easiest vote a Democrat would ever have to make. Step to the mic and say this:
“This administration has failed miserably in nearly every decision and policy it has undertaken. I have absolutely no confidence in this President, or his administration, to solve this crisis in a manner that is fair to the American taxpayer and won’t sink this country into long-term financial ruin. I vote NO.”
Twice in one day, Mike? Really? There’s hope for you yet! :-)
Tim Zank,
You are very mistaken Tim. The bailout would have the Government take bad debt from Wall Street and would benefit Wall Street.
It will not benefit Main Street unless the Government then decides to forgive some of the debts of homeowners. If this occurs the price would sky rocket and many voters would ERUPT.
Mike Sylvester
Gadfly,
I read articles from both sides and everyone should do so in my opinion.
As I keep saying it is socialism and I oppose it.
And yes, Leo did hit a homerun with his post.
Mike Sylvester
Jeff,
I agree with your comment; however, you and I both know that the Democratic Congress will do no such thing and is equally at fault for the “financial crisis.”
Mike Sylvester
Mike, I am by no means in favor of this or any of the bailouts going back to chrysler, I’m just confused as to what happens to the “ill-liquid” (jesus what a term)portfolios. If they are active mortgages in default, somebody has a mess on their hands with foreclosure, auction, and possession of the physical property. In which case it’s not only a bad idea, it’s gonna create an absolute clusterfrick with yet ANOTHER new agency & layer of bureaucrats.
If the portfolios are already completely “written off” and the property title cleared, then all the feds are doing is absolving the lender of the debt, which is even more freakin’ ridiculous.
Tim,
The plan is not final yet; however, the Treasury wants to do something like this:
Lets say a bank loaned money to Bob and Sue in Fort Wayne. Lets say they purchased a house for $200,000. Lets say the house would currently sell for $160,000. Lets say Bob and Sue got an interest only loan. Lets say Bob and Sue are one of the 7.5 million homes where the owners pay more then HALF of their income on their mortgage payments. Lets say Fannie Mae has this loan on their books.
Lets say Bob and Sue walked away from the home and it is in the foreclosure process.
The Treasury would take this loan from Fannie Mae. They would most likely pay a deeply discounted price for this mortgage and the property it secures. Lets say they buy it for $100,000.
If this baailout package is passed the Treasury Department has done the following:
Borrowed another $100,000 and increased the National Debt by $100,000.
The Bank can write off the mortgage and pocket $100,000.
The Treasury Department now owns a home that is in the foreclosure process. The Treasury Department now has to manage the property and then will hopefully sell the porerpty down the road.
It is a disaster.
Mike Sylvester
Mike - Per your suggestion, I read the Daily Kos post by Hunter. Your outline of a plan was not found in Hunter’s post - so it’s really your idea. I agree with you that doing the give-away this way would accomplish the same effect - without giving the people that caused the melt-down a pat on the back - either way at our (the taxpayers) expense. I also agree, whichever political party pushed this to reality, would win the November election, hands down. So, is any leading politician listening?, like people advising either one of a couple of US senators?