38° CLEAR, Bailouts unfairly burden taxpayers
Last Modified: Monday, September 15, 2008 at 11:17 a.m.
Let’s see, IndyMac, Bear Stearns, Fannie Mae, Freddie Mac… not that anyone’s counting, but just for the heck of it, I’d like to know if anyone’s keeping track of how much these bailouts are going to cost American taxpayers. Me being one of them, I’d really like to know what someone else is signing me on for, without my consent.
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I’ve never studied economics. But even I know that 1 + 1 = 2 and that a finite amount minus unlimited withdrawals equals unpayable debt.
It occurs to me the one thing legislators of both parties have consistently refused to accept is the solid fact there is a limit to the amount of debt the American economy can absorb.
No, let’s look at it the way it really is. There is a limit to the amount of debt the American taxpayer can absorb. That’s you and me. And it makes a huge difference. It puts my name and yours on the dotted line as the responsible party to pay for the debt.
It is not fair for another person to place me in financial jeopardy without my knowledge and consent.
It is even more unfair for the legally elected legislators of this nation to place American taxpayers in financial jeopardy without a full disclosure as to exactly what we’re signing on for. Because the truth is, we are not signing on for it. They are signing their names on dotted lines that you and I have to pay for.
The newest case of our government bailing out two very high profile entities, Fannie Mae and Freddie Mac, stands to cost American taxpayers $25 billion dollars. Considering they lost $3.1 billion between April and June of this year alone, that’s the kindest estimate out there. The reality will undoubtedly be far worse.
To all of this I have just one question: Is anyone keeping track of the balance sheet? That’s a question I want answered NOW.
Before one more administration comes to power and tries to undo the mess the irresponsible spending in Washington has created, I want to know exactly what that debt picture looks like. Since you and I are the ones who will be paying for it, we have a right to know that information now, before one more giant restructuring of the debt is arranged and new spending is piled on top of it as a thank you gift for “electing me as your president.”
So far, what I can see (and remember, I don’t know anything about economics) looks something like this:
1. The coming bailout of Medicare.
2. The coming bailout of Medicaid.
3. The looming bailout of the Social Security Fund as the last of the Baby Boomers hit retirement age.
4. The bailout of Bear Sterns, which required the Federal Reserve to kick in $29 billion to get J.P. Morgan Chase & Co. to sign on to the deal.
5. The bailout of IndyMac by the Federal Insurance Deposit Corp.
6. The bailout of Fannie Mae.
7. The bailout of Freddie Mac.
8. The ballooning war debt held by other nations
9. Disaster relief funding for rapidly increasing natural disasters due to global warming (huge forest fires, hurricanes, tornadoes, floods, storm surges).
10. Disaster relief funding for natural disasters around the globe (also increasing at an alarming rate).
11. Refurbishing the ageing infrastructure of highways, bridges, dams and water supply systems servicing American cities and rural areas.
12. Increased spending for homeland/national security when (not if, when) the next terrorist manages to penetrate our weak system of border and port security.
13. Stabilizing spending on entitlement services (education, healthcare) for populations who do not contribute to the tax base (undocumented aliens) but continue to draw from the pool of taxpayer provided services
Frankly, I’m worried. I’m not a genius, but I’m having trouble figuring out how we’re supposed to pay for all of this when we have been systematically outsourcing the backbone of the American job pool for the last dozen years, namely the manufacturing sector, followed by information technologies, food production, research and development, and to some degree healthcare and its adjacent technologies.
The last grim question in this somewhat bleak scenario is the ultimate question that is never asked because it is not politically correct. The old phantoms of corruption, greed, nepotism and making promises you can’t possibly keep haunt our political system.
In hours like this, when the sparkling promises of new candidates inspire us to hope against hope finally something will change, we must remember human nature does not change essentially. There will always be the darlings of the moment, the trendy newcomers with innovative ideas, pretending to have the best interests of the people at heart while they skim the cream of our labors off the top for themselves.
Those of us who came of age in the turbulent 60s aren’t voting for ourselves anymore. We’re stepping out of the accounts payable line to the accounts receivable line as we line up to collect Social Security.
The ones who will be paying this debt are our children. If I were them, I would refuse to accept it. I’d haul it out of Social Security and see how those who created the debt like paying it.
But that would be the fair thing to do, the right thing to do. And in Washington, as well as in our own hearts, the fair thing and the right thing rarely happen unless it can make someone look good and fatten their pockets at the same time. In this case, the fair and right thing to do would do neither.
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Comments
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September 15, 2008 6:21:23 am
RE: Link
Thank you for laying out the facts. Unfortuntely, approximately half of the American voting public - according to the polls - with their heads in the sand, believe a (continued) Republican administration, under John McCain, the American public will not have to pay taxes for all of the elements you've cited and that only with a Democrat in the white House will we/our children/our grandchildren be responsible for these debts in the form of higher taxes. It's time for America to WAKE UP!!!!
September 15, 2008 6:47:36 am
I'm just confused as to when it became a government problem for people's bad business decisions. If I loan someone $250,000 without adequately checking their ability to pay it back, that is MY fault not the government. Also, if I knowingly sign to take loan that might potentially require me to pay $1,250 a month but I can only afford $800 again that is MY fault not the government's. I'm no expert in economics either but what I'm talking about is common sense and individual responsibility.
September 15, 2008 8:11:37 am
Unfortunately our politicians from both parties are falling over each other to bail out these debtors in exchange for their vote. This is a very sad time in the history of America, the government just socialized the biggest loan companies and transferred their entire debt to the American Taxpayer.
September 15, 2008 8:26:11 am
Republicans say they don't want socialism, but they trip over themselves to privatize the profits and socialize the losses. Republicans can't wait to get at taxpayers money to save their own butts, but if you want the government to give a kid a pair of glasses, that's GASP!!! socialism.
September 15, 2008 8:54:51 am
Sally, it is the democrats that wanted this.
Democrats Want $20 Billion to Bailout Mortgage Borrowers
Bush opposed it.
Bush administration opposes Democrats' mortgage relief bill
September 15, 2008 11:58:08 am
Not that I'm a Bush fan or a fan of either party, but didn't they also have the debt for the Savings & Loan failure picked up by us the taxpayers ? Oh, maybe that didn't count because Neil Bush didn't go to jail. As I recall, none of the bas$*&ds did.If more of the high priced heads of these businesses did some hard time and had all their assets confiscated, I'd be willing to bet there wouldn't be as many failures !!
September 15, 2008 12:07:12 pm
I see. Helping out taxpayers is bad and represents socialism. Shrub is against that.
Bailing out Fannie and Freddy (and some mortgage banks but not all - those that the administration doesn't help should see who wasn't contributing to the RNC) on the other hand - that is good. Shrub supports that. That is good government - Republican free market philosophy.
Ha, ha, ho, ho. RIGHT!
Cheers.
:>
The Democrats I know, know how many homes they own.
September 15, 2008 12:21:20 pm
Palin thought that Freddy and Fannie were governmental agencies.
September 15, 2008 7:03:58 pm
This problem speaks to the very philosophy that has over taken common sense in this country...
If you work hard, pay your taxes, and are fiscally responsible you are "rewarded" with bailing out greedy people and companies who are not fiscally responsible.
If you come to this country legally, you are "rewarded" with having to pay more than your share to bail out those who are here illegally.
If you are a law abiding citizen who runs into a crook who swindles you out of a significant amount of money, law enforcement throws their support behind the criminal's "rights". It would cost you another fortune to take the guy to court to try to stop him and even then he will probably be allowed to cop to a plea.
The cost to taxpayers for presidential elections is a sheer disgrace. Security alone runs approx. $40,000 a day yet, we still allow 20 month campaigns even though we're all thoroughly sick to death of hearing about it by the time the election rolls around. (If campains were cut down to 12 months that would be just enough time to cover the issues and eliminate the time alotted for mud-slinging.) In addition, it would keep candidates in the jobs we're paying them to do until it is time to campaign! Gee, what a novel idea.
People are concerned about violence in society yet, if there is one mention of censoring internet information, even if it is specific to commone sense things like torturing children or how to make bombs, there is a huge uproar from the very same people who say they are concerned.
I could go on and on but you get the picture... I long for good ol days of common sense.
September 15, 2008 7:22:38 pm
Maybe MF you would be a little less confused if you understood Fannie Mae and Freddie Mac are not currently private companies but government sponsored enterprises (GSEs). Something McCain wants to reform. These GSEs are protected financially by the support of the Federal Government so they had to be bailed out but it was important for the Bush administration to not set a president of bailing out every troubled financial institution one was enough! Here is the low down on Fannie Mae and Freddie Mac:
Link
The Federal National Mortgage Association, nicknamed Fannie Mae, and the Federal Home Mortgage Corporation, nicknamed Freddie Mac, have operated since 1968 as government sponsored enterprises (GSEs). This means that, although the two companies are privately owned and operated by shareholders, they are protected financially by the support of the Federal Government. These government protections include access to a line of credit through the U.S. Treasury, exemption from state and local income taxes and exemption from SEC oversight.
It is interesting to note who set up these big government disasters!
Fannie Mae was created in 1938 as part of Franklin Delano Roosevelt's New Deal.
In 1968, due to fiscal pressures created by the Vietnam War, Lyndon B. Johnson privatized Fannie Mae in order to remove it from the national budget. At this point, Fannie Mae began operating as a GSE, generating profits for stock holders while enjoying the benefits of exemption from taxation and oversight as well as implied government backing. In order to prevent any further monopolization of the market, a second GSE known as Freddie Mac was created in 1970. Currently, Fannie Mae and Freddie Mac control about 90 percent of the nation's secondary mortgage market.
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