Well, the worst case scenario is happening.
FreedomWorks opposed the Housing Bailout Bill based on a simple, common sense assesment of it. We were one of the few because of the political sensitivity of the subject.
We were told that the government obligations would only be around $100 Billion dollars - over years. We apparently spent that in a month.
Language in the bill allowed the potential for a government takeover, but only in the most dire circumstances. Well, according to a report tonight, the government will seize Fannie Mae and Freddie Mac this weekend.
This has several huge impacts.
First, we assume all the risky debt obligations of these institutions. Reasonable predictions estimated that such a move would DOUBLE our total national debt. Well, based on past situations, this number will probably be much higher.
What does this mean to you? Well, the average national debt burden for every man, woman and child alive today is about $35,000 a person. Now, with the stroke of a pen, this has probably been doubled beyond $70,000.
Also, the U.S. Government now has become the largest financial institution in the United States. Hmm, are we confident that a government run financial institution of this scope will be good for us? I highly doubt it.
"Government is not the solution to our present problem. Government is the problem." - Ronald Reagan's First Inaugural Address.
Brace yourselves people. Government policies created this sub-prime mortgage crisis. Now a government takeover is the apparent solution. Yeah, right.
We have to face reality. Are we officially a socialist country?
Oh, and the two party system fostered all of this, because companies are "too big to fail". And far too many "reasonable" and "moderate" Republicans supported all of these moves.
I don't like making reactionary posts, but this is too big to ignore. And there will be much more information to come as this is fully researched.
My question above was facetious. We are a socialist country and things will only get worse. And both parties are complicit in the continued failure, and accelerating growth, of Big Government. And we will all have to pay the huge price for the incompetence of pandering politicians.
Friday, September 5, 2008
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8 comments:
Joe
The link to the report doesn't work. Its trying to pull from C:
I'd like to read the report if you can fix the link. I want to read "who" is being bailed out and how. I'm certain it won't be the shareholders. The stock should become worthless, akin to a reorganization. This was anticipated for months.
I'd also like to learn how the current actions match those of the S&L bailout of two decades ago. Not much by way of historical perspective, (or any current detail) has been reported other than foreclosures.
This is a result of deregulation.
You need to check out how much cash the "captains of industry" raked out of these institutions over the last couple of years.
Our corporations (and Leaders) embrace capitalism when things are going well, and socialism when things are going poorly.
More debt for our children and a lower standard of living for the country as a direct result of the debt service.
Can we at least see the "captains of industry" have their assets liquidated and sent to jail for a few decades. As they are major political contributors, I think not.
We are so screwed.
This is the third bailout in how many months? It's scary and wrong.
Capitalism works when we allow free markets to run their course.
I am tired of politicians talking about what is wrong with the economy, they are what is wrong.
The average family would proably be alright if the social engineers would let things alone, and if our leaders would set an example and live within the country's means.
Seems that we have lost control of our government by electing politicians that really don't care about the people, only themselves. This also occurs when the government gives entitlements to get votes. By doing this, they get more power for themselves and the people lose power. Not all the people do this, mostly it is the victim classes that are more than willing to relinquish their self independance for these entitlements at the expense of others. Joe is right! We are a Socialist country when it comes to our tax codes. Soon the victim classes will outnumber the self reliant and that is when Socialism will engulf us at all levels of our social structure. If only ALL the people would be learned enough to understand this, we could turn things around. I don't look for that to happen as long as the left controls our public schools and institutes of higher learning.
Anonymous says: We do have ourselves, and plenty of others, to blame for our current plight. It has to stop sometime and tomorrow is not good enough, yesterday would have been better, so NOW is it!!
I don't blame politicians; I blame our mothers; you and I are innocent victims of forces beyond our control. Brings into question the concept of self government, government of the people, by the people and for the people, doesn't it
Excellent blog and excellent points.
Key sentence
"Also, the U.S. Government now has become the largest financial institution in the United States. Hmm, are we confident that a government run financial institution of this scope will be good for us? I highly doubt it."
from a historical point of view, it's hard to object to the government's mass bailouts since similar debt-producing methods were used to bring the U.S. out of the Depression... our economy has been supported and driven by debt ever since
"our economy has been supported and driven by debt ever since".
Close, but not quite true! Our economy has been driven by spending, which is not necessarily debt. Spending creates jobs and jobs create profits for the producers and it slowly builds from there by way of "spinoffs" Several things cause debt.
1. Taxes on spending and saving is what slows spending and saving and causes job loss and therefore less taxes collected, forcing the government to raise taxes to make up the difference. When the difference can't be made, we go into debt.
2. Government over spending beyond their means also creates debt.
3. Mis-management causes debt.
4. Too many people collecting from the government that should be contributing.
The financial worth of a society is mainly created by the labor of its people, the ingenuity of it's people and our natural resources. We also depend on the honesty of our leaders and our government to get out of our way. Independent non-government oversight is better than regulation by government, when standards are created by the private sector, (called competition)! Government doesn't create wealth, they only spend and never give back.
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