Very rarely do I praise something Representative Scott Garrett says, but in a press release reported by the Express-Times I think he hit the nail right on the head:
We were assured that the government intervention on behalf of Bear Stearns was necessary in order to avoid a complete financial collapse," Garrett said in a press release. "Rather than stem the tide, the government bailout of Bear Stearns opened the flood gates.Now, with a massive fund being assembled for even more bailouts, the American taxpayer could be on the hook for upwards of $500 billion when you add all the bailouts together. That's roughly the same amount as the Iraq War, and neither expenditure has proven an effective use of our money. What's even more frightening is the fact a trillion is not unthinkable for both the bailouts and Iraq.
Here's how the Washington Post describes the massive fund:
The plan involves using hundreds of billions of dollars in government funding to buy bad loans, leaving banks with more money and fewer problems, according to two sources familiar with what was said at the meeting.
Do you get that? We the taxpayer are sending money down a hole, with no chance of being repaid as we were with Crystler. What do we as taxpayers want with a bunch of bad loans? Those that made these bad decisions, based on greed over principle, are being rewarded because they're having their good loans left in their hands.
This is where the American people need to call bull manure.
First off, it represents the end of capitalism as we know it. The idea that Wall Street firms will no longer have to worry about whether they're making good decisions, because now everybody knows the Treasury will bail them out if they don't, won't have any restraint on bad decisions.
It will simply be a get as much money as possible before crashing, call Uncle Sam for help at the crash, and continue forward. Don't think that's how Wall Steet sees it? Then how else could anyone explain an 800 point increase over the last two days with no nuts and bolts economic data out. It's all based on the knowledge they can go back and do what they've been doing.
Sure, there are those like Representative Barney Frank who will say "oh, the Treasury won't use this authority." He said that with Fannie and Freddie, and he was being disingenuous then and those advocating this plan are being disingenuous now.
People have got to learn, whether it is with stuff like the Patriot Act or these bailout bills, if the government is asking for the authority to do something they are going to use it when they get it.
Our Representative's job is to protect us, and represent our voice on the Hill. As much as it pains people to give him credit at times, and as wrong as he often is; Garrett being against government getting bigger is exactly the perspective we need now. The more bad debt we assume, the less government is going to be able to do and the more of our taxes are going to simply pay off bad loans and decisions made in the private sector. It's lunacy.
We're already massively in debt. Roughly 30% of our taxes go to pay off debt (a lot of which Garrett voted for). Now, with the hundreds of billions in lending we're having to borrow from China and Russia to loan to companies who made bad decisions, with no discipline, that 30% could easily top 50% of taxes. What school of business teaches this as a prudent economic model?
People who want things like national healthcare or a stronger defense establishment or whatever, have to recogognize that Washington going forward with this plan is going to destroy our ability to pay for the things we need and want. We shouldn't be throwing good taxpayer money after bad private sector decisions.
But the greed goes on...