Wednesday, September 24, 2008

Bail Out Plan is a JOKE!!!!!

So, I just got off a phone conversation with a politician friend of mine who is a high-level staffer for a local congressman. I asked him what this whole “Bail out Plan” means. He has spent the last 2 ½ - 3 days analyzing this bill for his congressman boss and says if everyone actually knew what this thing really said, they would be even more furious.

Apparently, your politicians (if they have actually read it) are astonished in how the Bush Administration actually presented this bill. The Bill the Bush Administration actually presented to congress was only SEVEN pages long AND it literally said that Paulson and Bernanke have full control over where to distribute, what to use the money for, and stated that there would be absolutely no oversight from anyone. This is for the $700 Billion that is currently in deliberation and does not include the $700 BILLION to over $1 TRILLION they have already spent on Bear Stearns and the takeovers of Fannie Mae, Freddie Mac and American International Group Inc. This is a total of $1.4 to $2 TRILLION for bailing out huge firms that are the ones that took the risk. You and I didn’t take that risk, those companies did.

Apparently, our entire congress has become very wise in how this administration likes to do things. They have realized that the administration likes to scare everyone into doing things quick/without analysis and want things done NOW. Take the funding for this endless war…“we need it now…it is an emergency.” This financial thing is the same…“this is an emergency…the economy will fail unless we get this money quickly.” And again, as with the war, there are NO guarantees for financial success if this money is given to these companies.

My friend said both democrats and republicans alike are furious because the administration wants it done so quickly. Both sides have said, “No. All through this administration, you have told us we need it done, and need it done now, but no…we need provisions and we are going to work this through.” He went on to tell me that it was either today or yesterday that Dick Cheney came into the deliberation meetings and the republicans were irate with him and his administration for doing this and actually made him leave the room. They were upset because they are up for re-election and this affects them and they can not believe the administration put them into this kind of predicament.

Oh yeah, another good point that I need to make about what this proposed bail out bill states. So we have all heard that is proposed plan is basically a blank check. Now, when I heard this, I figured that blank check meant that the government would write a check to these huge corporations and would in turn take control over all these bad loans. Oh NO NO NO…this bill, as it was proposed, said the government would write a check for all the bad loans, BUT the huge firms who made the loans would still collect on them (not the government). So, in essence the government [or you and I as taxpayers] would come up with this money, give it to these companies, and they can still collect on the loans. For example, let’s say the government writes a check for $700B, these companies collect $600B of the bad loans the government already paid for. They are not still $100B in the red/hole because WE ALREADY GAVE THEM THE MONEY. They are actually $600B POSITIVE because the bill, as proposed, states they do not have to pay it back! He said if everyone in the country knew what this bill actually said, the whole country would be more irate than they already are.

I asked him about health care and why they [Bush Administration] can suddenly come up with $1 to $2 Trillion to bail out the rich in Wall Street, but cannot come up with enough money to provide affordable healthcare to every man, woman, and child in the US. He said, good point, and he proceeded to ask if I knew that if the government were to cover every man, woman, and child for healthcare that it would only cost $2 BILLION annually. I was astounded, I admitted, NO I had no idea. People, this is $2 BILLION not TRILLION like they are asking for now. I speak as though $2 Billion is not much, but in respect to the Wall Street Bail Outs, it IS cheap and every last one of us would not have to worry about having to pay a deductible every time we went to the doctor.

I just don’t get it!!!! Every person who invests in the stock markets knows they take a risk. I have money in Wall Street right now, but I know I took a risk on each dollar I put into it. Those banks knew also and should NOT be getting bailed out. There are other companies that would rise from the ashes if they were to fail. We need a huge correction and I think that now is the time. Let them fail!! Things always come back. Heck in 5 years the money in the stock market will likely be worth three times what it is today.

Now, realistically we all know that if the government doesn’t step in, things could get bad. I agree, but we definitely cannot have the bill passing as it is. We [American taxpayers / main street] need something in return. A bank does not lend out money without getting something in return, so why should we?

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