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Congress Please Don’t Do It

by Michael Webster Investigative Reporter Friday, Sep. 26, 2008 at 1:09 AM
mvwsr@aol.com 949 494-7121

Bottom line the middle class was already on the decline and should this bailout be implemented the middle class as we know it will disappear and after all the dust settles and everything is said and done, it boils down to the rich will get richer and the poor will get poorer and the poor is who pays.



BY MICHAEL WEBSTER: INVESTIGATIVE REPORTER   Sept 22, 2008 at 2:00 PM PDT

Opinion included:

The Treasury Department's sweeping bailout effort is sounding more like a 0 billion dollar mugging of the American tax payers.

Congressional testimony continues, with Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson claiming rapid approval for their plan is necessary to buy up bad debt from financial firms and restore stability to the market.

That controversial proposal that is urging congress to hastily approve raises many more questions than it answers.

 

Paulson's hurry-up offense is playing well with many members of Congress, but it isn't playing well with mainstreet America, you and me. Congress is now expected to authorize the plan almost in its entirety ignoring the voters whose taxes will be paying the total bill.

 

Working families even now who are barely paying the bills and struggling to make the monthly mortgage payments is outraged that their hard earned tax dollars will go to bail out the rich and irresponsible marketers and lenders on Wall Street.

Reflecting the anger of many Americans who are having great difficulty paying there over inflated house payments and are feeling real pain at the pump and are straining to put food on the family table are against the bailout.

Fred Harris of Los Angeles, an out of work carpenter says “I’ve been out of work for months as have many of my friends we are already suffering. I think we as Americans can suffer some more and we are willing to. We say let the basters[sic] fail and stand on there on two feet just like us. Americans are a strong people we will survive.

John Vance of Washington State starting a new green solar business says, ” I and most small business people have for sometime not been able to get loans from banks. I wonder who they are talking about when they say credit and money will freeze up, hell that has always been out of my reach. I say let things take its natural course, I for one I’m welling to risk it. They're proposing that we pay for someone else's mistakes, and at the same time congress is not holding those people accountable."

Sharon Balcer of El Paso Texas points out that she, her Son and grandson are struggling. She says the credit markets are not functioning, that jobs are being lost, the unemployment rate is raising, oil and gas is going up, food is going through the roof, more houses are being foreclosed upon, the countries debt is hit the stratosphere and taxes are going up. “What’s new world, wake up America and smell the roses."  

Again the Bush administration is using fear tactic’s to sell their bailout plan which clearly only benefits the upper echelon of wall street and other financial institutions who have been reaping huge profits from the small ordinary investor. These financial thugs have ripped off America to the tune of trillions. And now that there investment scams have run it course and they have sucked the air out of it and has lift us high and dry they want the very people that made them rich now pay for there mistakes and yes, even there criminal activity with still a further 0 billion investment from the tax payers to them to bail them out.

 

Treasury Secretary Henry Paulson says if we don’t pony up the 0 billion up front the economy will go to hell in a hand basket. What he really is saying his cronies the fat cats will get burned if we don’t bail them out. He wants us to bail them out so they can continue to get Americans and others to further invest in their scams so they can continue to make a killing on the backs of the American worker.

 

The fear they are trying to create now is similar to the fear that Bush and Chaney created to justify the Iraq war. Many people think that the 0 billion is not enough to cut the nut, just like the war which was to only cost us an estimated 0 billion and now we know it has already cost us well over a trillion. Well just like the war many voters believe the requested 0 billion is but the tip of the ice burg. It is starting with 0 billion, but it to will soon cost American tax payers in the trillions. We will never get that money back as long as the big bank lobbyists and the fat cats don’t go to jail and they continue to prevail.

 

This tax payer bailout at best may help to create a short-term up tick, but whether this amount is enough or not is affected by to many uncontrolled factors and a number of current uncertainties that will impact the ultimate magnitude of the huge loss of the 14 trillion impaired securities. Some numbers being put out there when you calculate the raising U.S. debt of over 10 trillion, along with our total debt at around 53 trillion, put that together and you ad just the current known cost not including the war or anything else it totals at least 75 trillion which will cost every man, women and child ,000 or more.

Paulson's current estimate predicts taxpayers will make money, others believe ultimately the losses will be counted in the trillions.

Experts say recent events have revealed that the methodology of Wall Street's financial models used for valuing securitized assets is entirely broken. Furthermore, the credibility of rating companies on assigning ratings that assess ultimate payouts for mortgage-backed and asset-backed securities is also bankrupt and out of wack.

Calls to Wall Street veterans say no-one knows what the mark-to-model valuations are or even what banks are currently using, it is anyone's guess as to what the value of these assets are and what the bank balance sheets are really worth. The true financial assets and liabilities have values based on what management assumptions or expectations are rather than on market valuations. Their market value is therefore unknown. So how much of what will the 0 billion buy? No-one knows not even Paulson or Bernanke. What the tax payer knows is that there likely will not be a profit and even if through some miracle there were most believe it is most unlikely that the tax payer much less our children or their children will ever see a dime.

The real question that is not being asked much less answered is what effect this is likely to have on the average American, estimates very dramatically. But you can rest assured that either way the tax payers will pay. If Congress fronts the 0 billion request it will certainly help the fat cats and help to make them fatter at our cost. They claim it will free up lending and open the door for credit and that it may, but I have always been an advocate of not buying things you can’t afford. If you can’t pay cash then don’t buy it. Their way is to have us go into debt through credit so we are always living beyond our means. And that brings us to what they actually are guilty of and that is they were living beyond their means but the difference is they want us and expect us to pay that bill for them. Now they want us to pay them even more with none or very little benefit to us the people. If we don’t bail them out they say we are doomed.

 

In contrast to the inherently unknown intrinsic value of these securities and the putative value currently assigned by the beleaguered investment and commercial banks, the question is what is the price the proposed Mortgage and Financial Institutions Trust (MFI), will actually pay for these securities? News reports the so called MFI is believed it may follow to some extent the path of the Resolution Trust Corporation, created in 1989 to liquidate assets held by insolvent savings and loans companies. As all to often, this is likely to become a political decision. With Obama and McCain coming to Washington to help out it will boil down to pure politics and the average American’s will, will not be heard.

The Treasury Secretary's proposal states that "In exercising the authorities granted in this Act, the Secretary shall take into consideration means for (1) providing stability or preventing disruption to the financial markets or banking system; and (2) protecting the taxpayer."

The proposal — which consists of only about 850 words — is short on specifics about what we'll be buying or how much we'll pay. Instead, it gives Paulson unlimited power to decide all that later:

"Decisions by the secretary pursuant to the authority of this act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency."

If approved as stated, this will be a new paradigm shift in the world of capital, a new world order if you will? Paulson who has not been elected by the people will preside over the biggest federal spending binge in U.S. history like some financial czar or demigod, unanswerable to anyone.

Bottom line the middle class was already on the decline and should this bailout be implemented the middle class as we know it will disappear and after all the dust settles and everything is said and done, it boils down to the rich will get richer and the poor will get poorer and the poor is who pays.

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