The Fiscally Insane Bailout Bill Might Not Pass -- Here's 5 Reasons It Shouldn'tBy David Sirota, Blog for Our Future. Posted September 29, 2008.
The scheme would force taxpayers to absorb the pain, while Wall Street execs reap the gain. There was news Sunday afternoon of a congressional deal to bailout Wall Street fat cats with $700 billion of taxpayer cash (you can read the draft legislation here). Though the deal negotiated between congressional leaders and the White House is better than what Treasury Secretary Henry Paulson originally proposed early last week, it remains an insulting atrocity, having omitted even basic aid to homeowners, bankruptcy reforms and any modicum of future financial industry regulation. Now, the New York Times reports that the Democratic leadership may not have the votes to pass this bailout. So without further ado, here are the top 5 reasons (in no order) why every single member of Congress -- Democrat and Republican -- should vote this sucker down. Please feel free to copy and paste this post into an email to your congressperson. They are deciding right now -- let them hear your voice.
1.This Bailout's Inherent Fiscal Insanity Could Make Problem Worse
When an individual consumer uses a new credit card to pay off astounding debt from an old credit card, it's akin to check kiting, which is is illegal. Apparently, though, when the government does it, it's billed as Serious Public Policy. Because that's what this supposedly prudent bailout bill would do: Force taxpayers to borrow $700 billion from foreign banks to pay off the bad debt of Wall Street banks. During a crisis that is aimed at preventing interest rates from skyrocketing, nobody has been able to explain how adding almost a trillion dollars to the interest rate-exacerbating national debt would do anything other than undermine the plan's underlying objective. Worse, the U.S. Treasury Department itself admits that the $700 billion number is "not based on any particular data point" -- that is, they created it out of thin air because "We just wanted to choose a really large number." Slapping that amount of money onto the national credit card when our government can't even justify the amount is beyond absurd -- it is insane.
It didn't have to be this way, of course. As I noted in my newspaper column this week, Senator Bernie Sanders proposed a temporary tax on millionaires to finance part of this bailout. Similarly, Blue Dog Democrats proposed a future tax on financial firms if and when taxpayers lose cash on the deal. These proposals were discarded in favor of language asking the government to "submit a plan to Congress on how to recoup any losses," according to the Associated Press. Not only is that language toothless, but it opens up the possibility of a plan being submitted that says we should raise middle-class taxes or slash middle-class social programs to pay for Wall Street's misbehavior.
2. Experts on both the left and right say this bailout could make things worse...'
1.This Bailout's Inherent Fiscal Insanity Could Make Problem Worse
When an individual consumer uses a new credit card to pay off astounding debt from an old credit card, it's akin to check kiting, which is is illegal. Apparently, though, when the government does it, it's billed as Serious Public Policy. Because that's what this supposedly prudent bailout bill would do: Force taxpayers to borrow $700 billion from foreign banks to pay off the bad debt of Wall Street banks. During a crisis that is aimed at preventing interest rates from skyrocketing, nobody has been able to explain how adding almost a trillion dollars to the interest rate-exacerbating national debt would do anything other than undermine the plan's underlying objective. Worse, the U.S. Treasury Department itself admits that the $700 billion number is "not based on any particular data point" -- that is, they created it out of thin air because "We just wanted to choose a really large number." Slapping that amount of money onto the national credit card when our government can't even justify the amount is beyond absurd -- it is insane.
It didn't have to be this way, of course. As I noted in my newspaper column this week, Senator Bernie Sanders proposed a temporary tax on millionaires to finance part of this bailout. Similarly, Blue Dog Democrats proposed a future tax on financial firms if and when taxpayers lose cash on the deal. These proposals were discarded in favor of language asking the government to "submit a plan to Congress on how to recoup any losses," according to the Associated Press. Not only is that language toothless, but it opens up the possibility of a plan being submitted that says we should raise middle-class taxes or slash middle-class social programs to pay for Wall Street's misbehavior.
2. Experts on both the left and right say this bailout could make things worse...'
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