As a tax payer I am appalled that 700 billion dollars is being borrowed to "bail out" investors that have made bad investments, bent the rules, go on vacation and give themselves bonuses as soon as someone gives them an opportunity.
If we borrow this 700 billion dollars (which I don't agree with), I propose that the money be divided to the people that pay the taxes. Let us pay our mortgages and credit cards, buy new cars and go on vacation. In my scenario, me the taxpayer, pays off the mortgages I owe with the borrowed monies that I will be paying higher taxes for. The bail out would then occur for all of us, not just the executives at the top of the failing banks. My scenario would bail out all industries and give the American people a disposable income that they have never had before. We could all then afford to buy new cars, go on vacation, build up our businesses and send our children to school. On Oct 10, 6:06 am, "\"Lone Wolf\"" <[EMAIL PROTECTED]> wrote: > Well almost......won't be long now. > > Cost of U.S. Crisis Action Is Growing, Along With Debt, Deficit > > By Matthew Benjamin > > Oct. 10 (Bloomberg) -- The global financial crisis is turning into a > bigger drain on the U.S. federal budget than experts estimated two > weeks ago, increasing the deficit and the national debt. > > Bailouts of American International Group, Fannie Mae and Freddie Mac > likely will be more expensive than expected. States are turning to > Washington for fiscal help. The Federal Reserve said this week it will > begin buying commercial paper, the short- term loans companies used to > conduct day-to-day business, further increasing costs. And analysts > now say the $700 billion bank- rescue plan passed by Congress last > week may have to be significantly larger. > > ``I always assumed they would be asking for more money along the way > if it was necessary, and it looks like it's going to be necessary,'' > said Stan Collender, a former analyst for the House and Senate budget > committees, now at Qorvis Communications in Washington. ``At the > moment, there's nothing happening here that's positive for the budget. > Nothing.'' > > The 2009 budget deficit could be close to $2 trillion, or 12.5 percent > of gross domestic product, more than twice the record of 6 percent set > in 1983, according to David Greenlaw, Morgan Stanley's chief > economist. Two weeks ago, budget analysts said the measures might push > deficit to as much as $1.5 trillion. > > Yields to Rise > > That means a lot more borrowing by Treasury, which will push up > interest rates, said Greenlaw. ``The Treasury's going to be ramping up > supply dramatically over the course of coming months to meet this > enormous federal budget obligation,'' Greenlaw told Bloomberg this > week. ``The supply will trigger some elevation in yields.'' > > Payments the government allocated to keep vital companies solvent are > beginning to look insufficient. > > AIG, the giant insurance company that was taken over by the government > in mid-September, said this week it may access $37.8 billion from the > Federal Reserve Bank of New York, in addition to the $85 billion the > government already loaned it to stave off bankruptcy. > > ``You're in for a dime, you're in for a dollar on this one,'' said > David Havens, a credit analyst at UBS AG. > > The financial health and earnings prospects of Fannie Mae and Freddie > Mac -- seized by the government on Sept. 7 to prevent them from > failing -- worsened in the second and third quarters, the companies' > government regulator said this week. > > Price Declines > > The companies and regulators are recalculating the value of all of > their assets to factor in price erosion. That may mean the government > will have to spend more to keep the firms solvent. > > Earlier this week the Fed announced it will create a special fund to > buy commercial paper, the credit that businesses use to finance > payrolls and other ongoing expenses. The Treasury will deposit money > into the Fed's New York district bank to help set up the new unit. A > Fed official said Treasury funding for the program could be > ``substantial.'' > > California, Alabama and Massachusetts are urging the Fed and Treasury > to include their securities in rescue plans designed for banks and > businesses. The $2.66 trillion U.S. market for state and city bonds > has been all but frozen since Lehman Brothers Holdings Inc., weighed > down by losses in mortgage-backed bonds, declared history's largest > bankruptcy on Sept. 15. > > California has said it needs to sell as much as $7 billion in notes to > maintain its schools, health system and other public services. The > Bush administration said it is reviewing the states' financial > positions. > > Plan for Banks > > Meanwhile, Treasury Secretary Henry Paulson indicated two days ago > that he is considering buying stakes in a wide range of banks in > coming weeks to help recapitalize them. > > Such a move is allowed under the $700 billion bailout package Congress > passed last week. Edmund Phelps, winner of the 2006 Nobel Prize for > economics and a professor at Columbia University, said such action is > necessary -- and will likely turn out to increase the measure's cost. > Spending beyond the amount set in last week's bill would require > further Congressional approval. > > ``We have to recapitalize the banks,'' Phelps told Bloomberg > Television this week. ``I don't imagine that there's enough money in > the first Paulson plan to be able to do all that needs to be done in > that direction.'' > > The additional borrowing could push the national debt well past 70 > percent of GDP, the highest since the immediate aftermath of World War > II, when the U.S. was still paying off war debt. > > Debt Limit > > Gross U.S. debt, which includes debt held by the public and by > government agencies, this year reached about $9.6 trillion, or about > 68 percent of gross domestic product. The rescue legislation increased > the government's debt limit to more than $11.3 trillion from $10.6 > trillion. > > On top of all that, budget watchdogs say the sheer size of the > interventions is making Washington more profligate than usual. To > attract votes in Congress, leaders added several costly items to the > $700 billion rescue, including extensions of some tax credits and tax > breaks for makers of wooden arrows and stock-car racetrack owners. > > Under normal circumstances, there would have been more resistance to > such expenses, said Robert Bixby, executive director of the Concord > Coalition, a non-partisan budget watchdog. > > The rescue legislation ``creates a mask for all sorts of fiscal > irresponsibility,'' said Bixby. ``It covers up a multitude of sins.'' > > To contact the reporters on this story: Matthew Benjamin at > [EMAIL PROTECTED] --~--~---------~--~----~------------~-------~--~----~ Thanks for being part of "PoliticalForum" at Google Groups. 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