IS THEIR ONLY ONE PLAN FOR THE BAILOUT?
HERE ARE SOME SUGGESTIONS FOR ALTERNATE BAILOUT PLANS THAT WON’T COST THE TAXPAYER 700 BILLION. THIS WAS WRITTEN BY DAVID SEROTA:
THERE ARE CLEARLY BETTER AND SAFER ALTERNATIVES (FOR BAILOUT)
The mantra throughout the week has been that America has “no choice” but to pass Treasury Secretary Henry Paulson’s $700 billion giveaway – that, in effect, there are no alternatives. But that’s an out-and-out lie – one with a motive: Making it seem as if the only thing we can do is hand the keys to the federal treasury over to both parties’ corporate campaign contributors. The truth is, there are a number of alternatives. Here are just a few:
* In the Washington Post last week, Galbraith outlined a multi-pronged plot shoring up and expanding the FDIC, making a Home Owners Loan Corporation, resurrecting Nixon’s federal revenue sharing, and taxing stock transactions (a tax that would fall mostly on speculators) to finance the whole deal.
*The Service Employees International Union has drafted a plot based around a massive investment in public services and national health care, and regulatory reforms preventing foreclosures and forcing banks to renegotiate the predatory terms of their terrible mortgages.
* For those in the mindless, zombie-ish “someone has to do something!” camp, consider the possibility that you are under the spell of the same kind of White House dread that led us to invade Iraq because of Saddam’s supposed WMD. Consider, perhaps, that there may not even be a compelling basis for doing anything just yet (or at least not anything nearly so huge), and that the whole reason there is this urgent push right now has nothing to do with the financial situation, and everything to do with making the political dynamic to pass a wasteful giveaway – one that couldn’t be passed otherwise without a sense of emergency.
In two separate posts (here and here), CEPR’s Baker says that letting the problem play out could be the best path, because Treasury and the Fed may already have the tools they need. Following this path, the worst thing that happens is “The Fed and Treasury will have to step in and take over the banks is exactly what many economists argue should happen anyhow,” Baker writes. “So the outcome of the worst case scenario is a really frightening day in which the whole world financial system is shaken to its core, followed by a government takeover of the banks. Eventually the government straightens out the books and sells them off again. But the real threat here is not to the economy, it is to the banks.”
* Then there is the thought of simply taking the $700 billion and simply give it to struggling homeowners to help them pay off part of their mortgages. This hasn’t even been discussed but the thought experiment it involves is vital to understanding why there is, indeed, an alternative to the Paulson plot. If the root of this problem is people not being able to pay off their mortgages, and those defaults then devaluing banks’ mortgage-backed assets, then simply helping people pay their mortgages would preserve the value of the mortgage-backed assets and recharge the market with liquidity. That would be a bottom-up solution helping the mass public, rather than a top-down go helping only financial industry executives.
On this latter proposal, some may argue that giving any relief to homeowners is “unfair” in that those homeowners made their problems, so why should taxpayers have to help them? But then, is helping homeowners any less honest than simply giving all the money away to Wall Street, no strings attached? I’d say no – and helping homeowners also serves a second purpose: namely, keeping people in their homes, which not only helps them, but helps an entire neighborhood (as any homeowner knows, nearby properties can be devalued when foreclosures hit).
WHAT DO YOU RECKON OF THE ALTERNATE BAILOUT PLANS? SHOULD WE WRITE CONGRESS? OR JUST GIVE THE POOR BANKS 700 BILLION OF OUR HARD EARNED MONEY— NO STRINGS ATTACHED?
RHYKER My question was and is: “is their a better way to get money to the credit markets then a blank check from us TaxPayers? Myself I don’t fall down when I sing and walk at the same time, but some do.
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Tags: bailout, campaign contributors, corporate campaign, federal treasury, financial situation, galbraith, henry paulson, home owners loan corporation, massive investment, mindless zombie, national health care, only, Plan, pronged plan, regulatory reforms, s 700, serota, service employees international union, speculators, stock transactions, Their, treasury secretary henry paulson, washington post
This crisis is not about politics, it is about our countries economic survival.
The average American does not know how this will affect them, God forbid, until it is too late.
The American economy operates on borrowed money.
Not just individual Americans, but the businesses you work for and the businesses you personally do business with.
Republicans and Democrats, Democrats and Republicans better e-mail or call your Congressional Representatives and Senators and tell them to get it done, now.
OMG, this is way too long to read, sorry!
They gave us the only plot they really wanted…
Whats more than just the money, is the centralization of power granted.
The pooled investments is the only aspect of the money supply that is not controled by the FED. Once our government gains control of our money supply entirely, we will stop to have a free market.
What they were proposing is COMMUNISM. Government control of the means of production. If you control the money supply, you control the means of production.
Our founding fathers are turning over in their graves at this latest disgrace to the constitution. The failure of the Federal Reserve System signals its time to change and abolish that corrupt banking cartel that has driven us into this situtation.
YOU can take your money and throw it in the street.
the problem is there are 432 plans and just as opinions are like a holes they all stink!
What You worked for is Theirs, just question em.
I say let the banks fail. I do NOT agree with saving them…it’s their own fault, why should taxpayers foot the bill?? Me and Wifey agree with the thought of giving the money to the tax payers because WE (the taxpayers) are the ones who need the bail out.
THAT would be an economic stimulus, not that lame a$$ check we got earlier this year…
Thanks for posting your question! Very thought provoking!
I have emailed my rep (Vern Elhers – R-MI).
I guess he feels he had done his job by showing up and signing his paycheck every Friday. I hope he enjoys it while it lasts.
NO BAILOUT! NO WORKOUT! NO WAY!