Wednesday, October 01, 2008

A Modest Proposal

It looks as if the House’s defeat of Paulson’s Raw Deal Wall Street bailout package on Monday afternoon was just a bit of theater to set let the market soften us up for a retry tomorrow. I read the new bill-it’s still horseshit. How will injecting cash into a bankrupt system ease credit and save us? Most Americans have car loans, mortgages, student loans, and credit card debt to the point where they have nothing to save. America's total debt, consumer, state, local, and federal is estimated to be over $50 trillion and this bill will do NOTHING to ease the debt burden on the average citizen.

Sorry, but I still smell a rat. This financial crisis has been a decade in the making, but we have to act on it in a week? We are being stampeded into supporting a plan that benefits few on the backs of many by fear mongering of the worst sort. No facts, no detailed analysis, just panic driven hyperbole. But don’t take my word for it, I’m not an economist. But hey, this guy is: Nouriel Robini, a professor of economics at NYU said that “[t]he Treasury plan is a disgrace: a bailout of reckless bankers, lenders and investors that provides little direct debt relief to borrowers and financially stressed households and that will come at a very high cost to the US taxpayer. And the plan does nothing to resolve the severe stress in money markets and interbank markets that are now close to a systemic meltdown. It is pathetic that Congress did not consult any of the many professional economists that have presented - many on the RGE Monitor Finance blog forum - alternative plans that were more fair and efficient and less costly ways to resolve this crisis.”

If the government really wanted to help out Main Street they would also stop fighting tooth and nail against any of the bankruptcy reform being proposed for inclusion in this bill. Why is Congress resisting changing the law that would enable judges to work with people in bankruptcy to avoid defaulting on their mortgages? This is a simple solution that -- while not perfect -- would shore up some of the base of the problem (defaulting mortgages) and would cost tax payers nothing. Guess who would stand to lose money under this scenario? Bankers. Wall Street. Thus, it’s a non-starter. But Congress cares about Main Street? Ha!

I’d like to put forth my own modest proposal. I say we give every registered voter in America $1,000,000. This would cost much, much less than the proposed bailout and allow countless Americans to pay off their mortgages, eliminate their credit card debt and at the same time, pump large amounts of money into the economy that would eventually trickle up to the banks. If secretary Paulson wants to discuss the plan with me I’m ready to take his call. But I’m not holding my breath.

1 comment:

Anonymous said...

The French had a saying when they realized their goverment had changed the terms of their "armistice" with the Nazis to include the term collaboration: give me your watch and I'll tell you the time.