Stand Against the Bailout

Thursday, September 25th, 2008 | TV and text

Despite the machinations in congress there is an increasing popular uprising against the bailout.  There are coalitions forming: on the right there are anti-Big Government and taxpayer groups, in the center are open government advocates and on the left there and progressive and labor groups.  According to Politico, all of these groups have an important ally: “public opinion, especially that of online activists.”  This first activist points out that the text of the bailout says that it “may not be reviewed by any court of law or any administrative agency.” He claims that checks and balances will be thrown out the window:

This next activist asks for us to contact our senators and representatives, says let the failing businesses fail. Should we bailout people who failed at their business? No, he says, they failed: “Do not give money to people who can’t handle money.”

“Hey congress: hands off America’s money.” He says oversight has failed; let the failures fall.

This pundit says that media is also to blame because they are owned by big businesses that want to protect their interests — and so many things do not get reported.

Says that a lot of media outlets are “more of a cheering section” for big business.

What is the solution? Several emails have been circulating that offer different proposals. Here are a couple:

One writer suggests giving the billions over to American citizens:

I’m against the $85 BILLION bailout of AIG. Instead, I’m in favor of giving $85,000,000,000 to America in a ‘We Deserve It’ dividend. After all, ‘We Deserve it’ more than they do.

Let’s put it into perspective. To make the math simple, let’s assume there are 200,000,000 bona fide U.S. citizens, aged 18+. (Our population is about 301 million counting every man, woman and child. So, 200 million might be a fair stab at adults 18 and up.) $85 billion divided by 200 million = $425,000. Yes, that’s my plan: to give that $425,000 to every adult as a ‘We Deserve It’ dividend.

Of course, it would NOT be tax free. So, let’s assume a tax rate of 30%. Everyone would pay $127,500.00 in taxes. That sends $25.5 billion right back to Uncle Sam! It also means that every adult 18+ has $297,500.00 in their pocket. A husband and wife would have $595,000.00!

What would you do with $297,500.00 to $595,000.00? Think of the ‘trickle down’ economics!

That might be a nice idea, but the value of the dollar would plummet and the cost of housing (or any good/service) would sky-rocket.

Another author claims that America will make something on the bailout. Jon Birger of Fortune writes:

Members of Congress are now debating whether the government should demand equity stakes in any bank included in the proposed $700 billion bailout being pushed by Treasury Secretary Hank Paulson. If history is any guide, such a provision could recoup a big chunk of change for U.S. taxpayers.

As part of the post-9/11 airline bailout, Congress authorized up to $10 billion in loan guarantees for struggling airlines. Included in the law was an amendment - authored by then-Senators Jon Corzine (D-New Jersey) and Peter Fitzgerald (R-Illinois) - which instructed the Treasury Department’s Air Transportation Stabilization Board to negotiate equity warrants - basically options to buy airline stock at below-market prices - from any airline getting the guaranteed loans. In order to avoid conflicts of interest, the government-owned shares were pegged as nonvoting shares.

As Fortune reported last year, the loans were repaid in full and the stock warrants that the government received netted the taxpayers $130 million from the sale of three airline stocks - America West, Frontier and World Airways.

Birger says that if congress can keep the lobbyists at bay then they may just be able to set up a plan similar to the airline bailout.





1 Comment to Stand Against the Bailout

Mike Harmon
September 25, 2008

Hi,

I’m just getting started with my new blog. Would you want to exchange links on our blog-rolls?

BTW - I’m up to about 100 visitors per day.

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