(The) C0MM0N PE0PLES S0URCE for News

February 2, 2009

Being a “retiree” I’ve had lots of time to listen to and read all the different ideas presented by a lot of people on how the stimulus bill should be structured, how the money should be spent, and how it should be managed, as well as the remainder of the bailout money. The ironic thing is that nearly all of the hundreds of ideas differ on all these points. So how is one to really know what the best plan is? Let’s face it; we can’t know because no one really knows. For the most part they’re all just spouting off at the mouth promoting ideas that will benefit their personal interest. We’ve never been in a mess like this, even considering the stock market crash of 1929 and the ensuing depression, so it’s anybody’s guess on how it all should be done. But the big difference this time around is that most of corporate America wants to be bailed out, the majority of states want to be bailed out, and tens of millions of ordinary citizens want help. And this time taxpayers are being asked to foot the entire bill, which is something that didn’t happen in 1929 & the 30’s.

Under any circumstances, a 12-15 trillion dollar fix (trust me, it will cost that much if not more) would be more than we & future generations of taxpayers should be forced to pay. But then you add our already existing debt to that and we are looking at a total debt of $25 to $30 trillion. And no one has even offered to suggest a realistic and sensible way to pay for it, and there’s hardly anyone saying “stop; this insanity has gone far enough”. Instead, we’ve got the Republicans setting the stage to blame the Democrats when the bailout fails. Knowing that President Obama and the Congressional Democrats are going to put some heavy restraints on Wall Streets bonuses, the Republicans are saying that without bonuses the banks will loose valuable employees, thus causing the banks to fail. The fact that most of them are going to fail anyway is of no consideration. To both them and the Democrats, it all about politics.

With the run-a-way spending by the last administration (the national debt nearly doubled), the new administration is not only severely handicapped, but has their hands completely tied for implementing any ideas they have. I’m sure there are a lot of anti-Obama and anti-Democrat people that are happy about that part. But any ideas that Obama had about trying to fix the thousands of problems we already had (many of which were created by the Bush administration) will have to be shelved in order to concentrate on the worst crisis this nation has ever had; a crisis not of his making. That being the case, his political enemies have a sure-fire platform to attack him now & right through to the next presidential campaign by saying he didn’t keep any of his promises. And, by that time, I’m sure Obama will be given sole credit for this mess he inherited.

Speaking of this mess, the U.S government will have no choice except to declare bankruptcy. There is no way out of it, and then this “little” problem we have now will look just that way; little. Think about it; we were already in deep financial trouble when George W. Bush took office; we were about $5.5 trillion in debt at that time, but the deficient spending had ended. By the end of the 2007 budget year (September 2008), that debt had increased to the tune of $9 trillion. And not counting the Obama stimulus plan of $1 trillion, when the 2008 budget years ends in September 2009, we could have a debt of about $12 billion if just one-third of the committed bailout money is spent. Even without the bailout money and Obama stimulus package, the Tax Policy Center estimated our gross debt would be $12 trillion by 2013. Therefore, in just 13 years, with what is sure to be spent on the bailout and Obama stimulus, our debt will have more than triple. Bankruptcy will be our only option.

Back to the current stimulus bill; we have the Democrats in Congress demanding that Wall Street reign in their greed. They are very vocal about this, and I expect them to become more so. In addition, the Democrats are insisting that the financial institutions and corporations give up a lot of things. Yet, they, the Democrats, are piling on heaps & heaps of pork to the stimulus bill, which include permanent additions to the entitlements programs. In other words, they are trying to ramrod the hundreds of personal projects into the stimulus bill that they were previously working on. So why aren’t the Democrats exercising the same self-restraint they are demanding of Wall Street? Simple. It’s like everything else Congress does; insist the rest of the country live by a different set of rules than they, Congress, live by.

Then we have the Republicans. For the first 6 years of the Bush administration they controlled Congress, and never batted an eye at what Bush was spending. That parlayed into nearly doubling the national debt. But now that a Democrat is in the White House, they are all harping on the wastefulness of the Obama stimulus package. They are also harping on all the pork the Democrats are putting in the stimulus package. Very hypocritical; the reason they won’t sign off on the package is because the Democrats won’t agree to yet more give-a-ways to corporate America and the wealthiest of Americans. Minority Leader John A. Boehner, Republican, said that by house Republicans unanimously voting against the stimulus bill shows that “Republicans were standing up for American taxpayers”. Strange how they are suddenly “standing up for American taxpayers” just after a “damn the torpedo’s, full speed ahead” Republican President is replaced by a Democratic President. And nearly every single one of them voted to hand over trillions to their friends on Wall Street. With the exception of only one time during the first 6 years of Bush, they signed off on everything that Bush wanted to spend taxpayer money on and “smiled all the way to the bank”. As this reporter said, “House Republicans voted in lock step against President Obama’s economic stimulus package, using as one excuse their deep concern about the impact of government spending on the future debt burden of America’s ‘children and grandchildren’.”

Ironically, the Republicans were giving Rush Limbaugh credit as the talk show leader who convinced Republicans to vote against the bill. But as Eugene Robinson of the Washington Post said “if Republicans hadn’t broken the bank with drunken-sailorish spending during most of George W. Bush’s time in the White House, their complaints about the cost of the stimulus package and its impact on future deficits would be more credible. As things stand, we have to let actions speak: absolute solidarity among House Republicans in voting no.”

Relative to the bailout, here’s what’s really sticking in the craw of us ordinary Americans. Merrill Lynch received $10 billion in TARP money and paid out $9.5 billion in bonuses. Morgan Stanley got $10 billion in TARP money and paid $9.98 billion in bonuses. Wells Fargo received $25 billion in TARP money and paid out $8 billion in bonuses. Goldman Sachs received $10 billion in TARP money and paid out $12.1 billion in bonuses. Citigroup received $45 billion in TARP money and paid out $20.7 billion in bonuses. JPMorgan Chase received $25 billion in TARP money and paid out $13.6 billion in bonuses. You don’t have to add it up; I’ve done that for you. That’s $125 billion in TARP money and $73.88 billion in bonuses. In other words, nearly 60% of the TARP money was paid out in bonuses. (Funny; last October I wrote a post where I quoted those who said 60% of the bailout money would find its way into the Fat Cats pocket. Naturally, all the supply-siders were scoffing at that. But it looks like the reports were right.) Hears a couple of examples of individual greed. Thomas Montag got $40 million just to come to Merrill Lynch last August when Merrill was already loosing $11 billion. Then Peter Krause, who came to Merrill Lynch in September, got $25 million for just a few weeks of work. He was the one that recommended they sell themselves to Bank of America. (They sure “saved” Merrill Lynch, didn’t they?)

When the banks are questioned on using TARP money for bonuses, they say “oh, no; we didn’t use the TARP money for bonuses; the bonuses came out of this pile of money and the TARP money is in that pile over there”. (Oh, wow! Now I understand. I’m so glad to know those bonuses didn’t come out of my tax dollars.) The thing none of the banks are acknowledging is that many of them wouldn’t even be in business today had they not received TARP money, yet they are using that money to pay themselves. Sad; very sad. Even sadder is that there are some, like those at CNBC, that now want to change the name from “bonuses” to something different, as if that will make it ok for banks to use taxpayer money to make executives richer. I believe CNBC’s exact phrase was “we need a new name for this”. Which reminds me; just what is CNBC’s mission statement? I’d be very interested in knowing that.