A month and a half ago, on October 3rd, our Congress opened the gate and led our country down the path in it’s first steps toward socialism. The Great Bailout of 2008 was touted as the “rescue plan” that would save our country from certain economic demise, while giving our government control it should not have. The measure passed handily with a majority of Senators (including both Presidential candidates) and Representatives attempting to assure the American people that this path was the only way out.
Leading up to its passage, Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke lobbied heavily for the plan. They both said we had no other choice. They both said if we did not act quickly, we were doomed. It turns out, they were wrong. Apparently we didn’t need to venture down this path.
To date, $290 billion has been committed by the Treasury Department. $125 billion has gone to the nation’s nine largest banks and investment banks. Another $125 billion has gone into regional banks, and $40 billion was added to the original AIG bailout. Under the terms of the Great Bailout, the Treasury Dept. can spend up to $350 billion before asking for an additional $350 billion more from Congress. That leaves $60 billion to spend, and today we learned that the original bailout plan isn’t going to work.
They told us this plan was the only way to solve the problem. They told us if this plan did not pass, we were going to lose more than our shirts. Does this mean we have lost our initial $290 billion? What do they mean it’s not going to work? Does this mean we are heading for hell in a hand-basket?
On September 16th, 2008, the United States government agreed to ‘bailout’ American International Group (AIG). The reason given to taxpayers for this decision was to “save financial markets and the economy from further turmoil”. Since that day in September, all we have seen are sluggish financial markets and economic turmoil. The American taxpayers have been left wondering if they really needed to bail out AIG in the first place.
AIG is the world’s largest insurer, and we were told that allowing the company to fail would have had a detrimental affect on financial markets. Over the past few months, the government has bailed out big companies like Bear Stearns, Fannie Mae, Freddie Mac, and AIG, yet they allowed one of the largest investment banks, Lehman Brothers, to go belly up. How did they decide which companies were worth saving and which ones were not? We have no way of knowing how each decision was made, but it’s clear that the government was not interested in spending money on every business that needed help and we are to trust that they made those decisions in the name of financial market stability.
Less than a month later, the U.S. Congress passed the “Great Bailout of 2008”. That bailout, unlike the others, required congressional approval, but like all the others, was passed with the promise to restore confidence in the credit industry, stabilize the market, and save us from even greater financial ruin. Only this time it cost a heck of a lot more than all the others combined.
When Congress passed the Great Bailout the American people were re-assured there would be transparency so they would know how much of their money was being spent, and where that money was being spent. So far, that hasn’t happened.
Tell the truth now. Did you know there was trouble brewing in the housing market? Did you see the coming economic storm? We’re you shocked when not-so-smart people in our government started espousing the need to ‘bailout’ certain financial companies? Seriously?
The signs have been there for a couple of years. If you’re one to keep your head in the sand (like many politicians on the House Financial Services Committee) you might not have seen those signs, but for those of us who happen to have more than a pea for a brain, we saw the signs. We knew it was just a matter of time before lending institutions would begin to crumble, and now it has happened.
Financial institutions are crumbling and it’s all because Fannie Mae and Freddie Mac have imploded. Maybe things wouldn’t have gotten so bad if Fannie and Freddie were not required to purchase all of those bad loans in the first place. Then again, things could be much worse. The American people could lay blame on Congress, where it belongs, because they failed to take action that could have prevented this whole mess.
Here we are, one week since the “Great BailOut of 2008”. It’s been one week since some members of Congress stood up and said they thought the items in the bill were a bad idea but they were voting for it anyway. It’s been one week since others told us this was the best thing to do for our country.
Leading up to the bailout we were reassured that it would:
a) restore confidence in the credit industry
b) stabilize the market
c) save us from even greater financial ruin
In the past week, there has been anything but confidence in the credit industry, the market is far from stabile, and retirement plans have lost trillions of dollars. Let’s review the market activity of the past week.
Something is wrong with Barney Frank. I’ve suspected for years now that he’s not all there. I don’t know if it has something to do with serving in the House as long as he has, or not, but he’s just not right.
As the discussion of a possible bailout started circulating Washington, Rep. Barney Frank (D-MA), who just happens to be the chairman of the House Financial Services Committee, was “instrumental” in working to amend the plan so it had a chance of passing on the Hill.
The question is, why would the man who holds a large part of the responsibility for this mess in the first place be allowed to participate in the negotiations for fixing it? It doesn’t make sense. He spent years blocking all attempts to increase oversight at Fannie Mae and Freddie Mac. He spent years working against the best interest of his constituents, his party, and his country.
Do you remember last week, when the U.S. House of Representatives failed to pass the $700 billion bailout and the Dow Jones dropped 777 points?
A whole lot of people, including President Bush, Treasury Secretary Paulson, Speaker of the House Nancy Pelosi, and Senate Majority Leader Harry Reid told us we needed a bailout bill and we needed it as soon as possible. They said if the bailout bill did not pass, we would be facing a certain financial downfall in our country.
The Senate added the contents from another bill, to make it more appealing for some members, and they passed the bill by an overwhelming margin on Wednesday. Fast-forward to Friday, when the U.S. House passed the revised measure and we were reassured by President Bush, Treasury Secretary Paulson, Speaker of the House Nancy Pelosi, and Senate Majority Leader Harry Reid and others who told us they had done the right thing. Some didn’t like it, but it was the right thing to do for our country.