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| Version | User | Scope of changes |
|---|---|---|
| Jan 17 2009, 1:04 PM EST (current) | almyatt | 45 words added, 43 words deleted |
| Jan 17 2009, 12:22 PM EST | almyatt | 564 words added |
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GPMI Statement on the Bi-partisan Bailout
proposed by Art Myatt, Jan. 17, 2009
The federal government's economic bailout tab to date (mid-January of 2009) totals $7.2 trillion. It's a hard to follow complex of giveaways (the Troubled Asset ReleifRelief Program, or TARP), loans (to the auto companies, for example), tax rebates (Remember your stimulus check in 2008?), Federal Reserve guarantees for money market funds and some commercial paper), guarantees for the mortagesmortgages provided by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), and so on.
The figure given above is an estimate, not absolutelya precise accurate.number. The total cost is a moving target in any case. Obama's economic stimulus plan is expected to cost another $800 billion, which will bring the total to roughly $8 trillion - $8 trillion and counting in one year. That is approximately $27,000 for each inhabitant of the United States, or a debt of more than $100,000 for a family of four, in one year of economic crisis.
The median annual household income in the United States was about $50,000 in 2007. If the depression continues to get worse, the median income may be less in 2009. In any case, ifIf a family making $50,000 a year ran up additional debts of $100,000 in a year, we would suspect them of being financially stupid or reckless or both. That is exactly the level of debt that is being run up for us by broad bi-partisan agreement, also known as the two-party system. We suspect our Democratic and Republican elected officials are stupid or reckless or both.
All this debt is supposed to bring about an economic recovery. It is not working.
This is not an opinion, it is an observation. "Confidence" of financial institutions in other financial institutions has not been restored or helped by the actions of the government. BothConsumer consumer and business loans are scarce, even for people and companies with good credit histories. Housing prices are still declining. The unemployment rate is rising, asand areso theon. numbersThe ofeconomic personalnews andis businessgenerally bankruptcies.grim.
According to law and custom, what ought to happen with bankrupt, insolvent institutions is that they fail and fileformally fordeclare bankruptcy. Once this has happened their debt is largely discharged. What is happening instead is that the government is spending trillions of dollars to recapitalize bankrupt banks. Saving companies that are insolvent by loaning them billions of dollars that they will never be able to repay will not lead to economic recovery.
The government could and should stop theseits efforts to stimulate the economy from the top down. What this does is preserve business that have failed. It rewards the people and institutions that are responsible for creating the crisiscrisis. whichit isdoes causingnot help the millions of ordinary people towho loseare losing their jobs, their houses, anand all else that can be lost.
The government should instead be committed to preserving a minimum standard of living for all the people affected by business failures. This would mean instituting Medicare for everyone (universal health care), Social Security for everyone (a guaranteed minimum income sufficient to cover food and shelter) and maintainencemaintenance of essential infrastructure and services.
This would support the economy from the bottom up. It would allow a sustainable economy to emerge from the wreckage of all the unsustainable institutions and practices that have ledcaused to the current crisis. It would allow obsolete institutions to disappear without destroying the lives of the associated people.
proposed by Art Myatt, Jan. 17, 2009
The federal government's economic bailout tab to date (mid-January of 2009) totals $7.2 trillion. It's a hard to follow complex of giveaways (the Troubled Asset ReleifRelief Program, or TARP), loans (to the auto companies, for example), tax rebates (Remember your stimulus check in 2008?), Federal Reserve guarantees for money market funds and some commercial paper), guarantees for the mortagesmortgages provided by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), and so on.
The figure given above is an estimate, not absolutelya precise accurate.number. The total cost is a moving target in any case. Obama's economic stimulus plan is expected to cost another $800 billion, which will bring the total to roughly $8 trillion - $8 trillion and counting in one year. That is approximately $27,000 for each inhabitant of the United States, or a debt of more than $100,000 for a family of four, in one year of economic crisis.
The median annual household income in the United States was about $50,000 in 2007. If the depression continues to get worse, the median income may be less in 2009. In any case, ifIf a family making $50,000 a year ran up additional debts of $100,000 in a year, we would suspect them of being financially stupid or reckless or both. That is exactly the level of debt that is being run up for us by broad bi-partisan agreement, also known as the two-party system. We suspect our Democratic and Republican elected officials are stupid or reckless or both.
All this debt is supposed to bring about an economic recovery. It is not working.
This is not an opinion, it is an observation. "Confidence" of financial institutions in other financial institutions has not been restored or helped by the actions of the government. BothConsumer consumer and business loans are scarce, even for people and companies with good credit histories. Housing prices are still declining. The unemployment rate is rising, asand areso theon. numbersThe ofeconomic personalnews andis businessgenerally bankruptcies.grim.
According to law and custom, what ought to happen with bankrupt, insolvent institutions is that they fail and fileformally fordeclare bankruptcy. Once this has happened their debt is largely discharged. What is happening instead is that the government is spending trillions of dollars to recapitalize bankrupt banks. Saving companies that are insolvent by loaning them billions of dollars that they will never be able to repay will not lead to economic recovery.
The government could and should stop theseits efforts to stimulate the economy from the top down. What this does is preserve business that have failed. It rewards the people and institutions that are responsible for creating the crisiscrisis. whichit isdoes causingnot help the millions of ordinary people towho loseare losing their jobs, their houses, anand all else that can be lost.
The government should instead be committed to preserving a minimum standard of living for all the people affected by business failures. This would mean instituting Medicare for everyone (universal health care), Social Security for everyone (a guaranteed minimum income sufficient to cover food and shelter) and maintainencemaintenance of essential infrastructure and services.
This would support the economy from the bottom up. It would allow a sustainable economy to emerge from the wreckage of all the unsustainable institutions and practices that have ledcaused to the current crisis. It would allow obsolete institutions to disappear without destroying the lives of the associated people.
