Alexis de Tocqueville said: "The American Republic will endure until the day Congress discovers that it can bribe the public with the public's money."
Thomas Jefferson said: “I sincerely believe that banking establishments are more dangerous than standing armies, and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.”
Can we be fooled to bail out the banking system with our own money? A few years ago Bush vetoed a bill which would have spent $32 billion dollars to give children from low income money insurance. F*ck them he said we don't have the money, when the rich boys from New York, and Washington come crying to him that they screwed themselves over he almost trips over himself to race to give them money. OK our financial system is f*cked, banks screwed it up, now we have to save them, but they had months if not years to fix their sinking ship. Ins ted of just directly giving the money to the banks for their bad debt from the bad mortgages they gave out, they could have given the money to the home owners who lost their house to the foreclosure, but wait that would eliminate the bad debt, and the high foreclosure numbers, and stupid thought might actually help people who need the help.
So they now want $700 billion dollars to save the economy, they must have spent hours if not days coming up with the figure to resurrect our economy, right? A treasury spokeswoman when asked about the figure said:
"It's not based on any particular data point," a Treasury spokeswoman told Forbes.com Tuesday. "We just wanted to choose a really large number."
Great, so we enlarge the national debt for a figure they pulled out of their ass. In 1992, Sweden faced an almost identical crisis with their banking system after a housing market collapse but did they fork over money, NO!
"Banks had to write down losses and issue warrants to the government.
That strategy held banks responsible and turned the government into an owner. When distressed assets were sold, the profits flowed to taxpayers, and the government was able to recoup more money later by selling its shares in the companies as well"(Ny Times)By requiring equity from the banks for their bailout, it almost guaranteed that the banks would do everything they could not to require the assistance, and forced the banks to find capital themselves. And the best part is when the banking system corrected itself, the government, or tax-payers got their money back, maybe not all of it but at least their was a return on their investment.
"By the end of the crisis, the Swedish government had seized a vast portion of the banking sector, and the agency had mostly fulfilled its hard-nosed mandate to drain share capital before injecting cash. When markets stabilized, the Swedish state then reaped the benefits by taking the banks public again." See their plan worked!But this whole situation reminds me of a Dilbert comic, and maybe I'm the wuss but I don't think we should just give a banking system that screwed themselves and the rest of us free money.
