that some of our reps in DC bail out private businesses says tons about their loyalty to the people
it's time to clean house On Apr 26, 11:25 am, JSM <[email protected]> wrote: > CBO Confirms You're on the Hook for Wall Street Bailout > Bill<http://paracom.paramountcommunication.com/ct/4172792:6196860620:m:1:1...> > The Illegal Barack Obama's favorite rhetorical device is to lecture the > American people about what are and are not "legitimate" public policy > arguments. So throughout the health care debate, illegal Obama insisted that > it was "not legitimate" to claim that "a public option is somehow a Trojan > horse for a single-payer system." This despite the fact that Reps. Barney > Frank (D-MA), Jan Schakowsky (D-IL), Anthony Weiner > (D-NY)<http://paracom.paramountcommunication.com/ct/4172793:6196860620:m:1:1...>and > Nobel Prize winning New York Times columnist Paul Krugman were > all caught on > video<http://paracom.paramountcommunication.com/ct/4172794:6196860620:m:1:1...>explaining > to single-payer advocates that the public option was exactly > that. > > Now the President is bringing the same audacity to the health care debate, > telling<http://paracom.paramountcommunication.com/ct/4172795:6196860620:m:1:1...>a > handpicked audience at New York's Cooper Union: "Now, there is a > legitimate debate taking place about how best to ensure taxpayers are held > harmless in this process. But what is not legitimate is to suggest that > we're enabling or encouraging future taxpayer bailouts, as some have > claimed. That may make for a good sound bite, but it's not factually > accurate." > > Before illegal Obama continues to go around accusing others of lacking > legitimacy, he should read the official cost > estimate<http://paracom.paramountcommunication.com/ct/4172796:6196860620:m:1:1...>of > the financial regulation bill released by the Congressional Budget > Office > last Thursday. Assessing the budgetary impact of the $50 billion that > "systemically important financial firms" would have to pay in assessments to > pay for the bill's "Orderly Resolution Fund," the CBO writes: > > The total amount collected from assessments is estimated to be about $58 > billion through 2020. But such assessments would become an additional > business expense for companies required to pay them. Those additional > expenses would result in decreases in taxable income somewhere in the > economy, which would produce a loss of government revenue from income and > payroll taxes that would partially offset the revenue collected from the > assessment itself. > > In other words, these financial firms have to get that $58 billion dollars > from somewhere, and that somewhere is you. Now the Obama administration may > argue that they actually oppose the creation of the resolution fund. But > American taxpayers should be even more frightened when they find out why the > Obama administration opposes it. The New York > Times<http://paracom.paramountcommunication.com/ct/4172797:6196860620:m:1:1...>reports: > "The Obama administration does not support the $50 billion fund, > partly out of concern that more money may be needed if one or more big > financial firms ever collapse and that creating a fund could make it > difficult to authorize more money." AEI's Peter Wallison > details<http://paracom.paramountcommunication.com/ct/4172798:6196860620:m:1:1...>CBO > how this provision could put taxpayer on the hook for much larger > sums: > > If the Dodd-Obama resolution plan is ever actually put to use, the direct or > indirect costs could be many times greater. For example, the bill authorizes > the Federal Deposit Insurance Corporation to borrow from the Treasury "up to > 90 percent of the fair value of assets" of any company the FDIC is > resolving. Yet one institution alone—Citigroup—has assets currently valued > at about $1.8 trillion. The potential costs of resolving it (not to mention > others) would be spectacularly higher than $50 billion. In short, the $50 > billion in the resolution fund is a political number—a fraction of what the > FDIC is authorized to borrow and spend. > > Why would this vast sum be necessary? The Dodd bill has one answer. It says > that the FDIC "may make additional payments," over and above what a claimant > might be entitled to in bankruptcy, if these payments are necessary "to > minimize losses" to the FDIC "from the orderly liquidation" of the failing > firm. > > In other words, the agency would be able to borrow huge sums so that it > could make more generous payments to creditors than they would receive in a > bankruptcy. Generous payments to creditors would certainly make unwinding a > firm "orderly"—but it would also encourage lending to the too-big-to-fail > financial institutions while disadvantaging smaller, less favored > institutions. This in itself will have a profound and destructive effect on > competition. > > This is the core problem of the Dodd-Obama Wall Street Bailout Bill: it > gives the same regulators that missed the beginning of the last crisis the > authority to engineer the exact same politically motivated bailouts > (see General > Motors<http://paracom.paramountcommunication.com/ct/4172799:6196860620:m:1:1...>, > Chrsyler<http://paracom.paramountcommunication.com/ct/4172800:6196860620:m:1:1...>) > for the next one. > > There is a better > way<http://paracom.paramountcommunication.com/ct/4172801:6196860620:m:1:1...>. > Congress should modernize bankruptcy laws to create an expedited method to > restructure and close large and complex financial firms. Such an approach > would not give regulators virtually unlimited powers and would free the > process from political interference by giving control to an unbiased court > system that already has extensive experience with complex modern firms. > > -- > Thanks for being part of "PoliticalForum" at Google Groups. > For options & help seehttp://groups.google.com/group/PoliticalForum > > * Visit our other community athttp://www.PoliticalForum.com/ > * It's active and moderated. Register and vote in our polls. > * Read the latest breaking news, and more. -- Thanks for being part of "PoliticalForum" at Google Groups. For options & help see http://groups.google.com/group/PoliticalForum * Visit our other community at http://www.PoliticalForum.com/ * It's active and moderated. Register and vote in our polls. * Read the latest breaking news, and more.
