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Fed Bailout Could Cost $1 TRILLION Of Your Tax Dollars.

Listening to the President speak this morning about how its going to be difficult, but that he is being forced to spend some taxpayer money in order to “fix” things and how things are still great even though they don’t look that pretty, made me pretty mad. But then when some economists came out today saying that the total cost of this bailout SO FAR could top $1 Trillion dollars, I was really mad. Here’s why:

These companies made billions and billions in profits from a lot of shady loans and debt repackaging, and their CEO’s and upper-level managers got millions in bonuses and salaries while doing so. Suddenly, their crappy business deals come home to roost and we are left holding the bag and paying through the nose for what they knew was coming down the pike. A trillion dollars? Of our tax dollars? For you guys?

It’s a shame we never have money to provide better education, or to fix bridges before they collapse, or to send our troops overseas with the proper gear to do their job. But somehow, we can come up with at least $1 trillion dollars to bail out public companies that collapsed due to their own malfeasance. It’s mind-numbingly stupid.

Who’s next? If Applebees or McDonald’s starts losing customers, do we get to bail them out too? I am not quite sure where the line is drawn anymore.


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Comments (13)

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  1. After we get through paying for the burueaucrats and lawyers who will be busy acquiring then writing off the worthless assets, and the borrowing costs for acquiring the worthless assets, the taxpayers bill will greatly exceed Paulson’s estimates. Be prepared for substantial tax increases and a reduction in take home pay right after the election.

  2. cwaltz says:

    I am with you on this. I get angry every time I think about it because it won’t be just us paying for this but our children and in all likelihood their children. Meanwhile the putzes that made all these mistakes and bad decisions have themselves their golden parachutes and lived high on the hog while the going was good.

    Corporate America should have to pay for their bad decisions just like we would have to if we made decisions.

    That said, if we don’t bail them out I could forsee a second Great Depression. Lots of layoffs would result which would cause further defaults which would result in more jobs lost. There is no winning.

  3. Mark says:

    Proclamation on the Federal Reserve System of the United States of America

    http://www.TakeBackTheFed.com

    March 2008

    WHEREAS, Article I, Section 8 of the Constitution of the United States of America authorizes Congress “To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures”;

    WHEREAS, on December 13th, 1913 the US Congress enacted the Federal Reserve System;

    WHEREAS, the Federal Reserve System is considered an independent agency within the federal government, with oversight of Congress and containing appointed public officials on its board of directors;

    WHEREAS, the Federal Reserve System Controls the Federal Reserve Note, the official currency of the great nation of the United States of America;

    WHEREAS, there may be controversies regarding the legality and constitutionality of the Federal Reserve System, it is recognized that the said system has operated continuously as the central banking system of the United States since the inception of the Federal Reserve Act of 1913;

    WHEREAS, the Constitution of the United States of America granted Congress the authority to create the current Federal Reserve System, it also does grant Congress the authority to modify or revoke the Federal Reserve System;

    WHEREAS, the actions of the Fedreral Reserve System represent the credit and currency of the United Stated of America to the citizens of this great nation and to the world;

    WHEREAS, the Federal Reserve System, acting independently within the federal government allowed, supported, and even promoted parasitical and non-productive uses of the money and credit of the United States of America;

    WHEREAS, the United States and likely the entire world’s financial system is undergoing massive de-leveraging of the said parasitical and non-productive uses of the credit and money of the United States of America (as well as other nations’ currencies);

    WHEREAS, the US dollar, the “Federal Reserve Note” is declining in value due to these parasitical activites, as well as potentially other causes;

    WHEREAS, it is recognized that the citizens of the United States and other nations did willingly participate at some level in the creation and propogation of said parasitical activities;

    WHEREAS, it is also recognized that the United States of America, a sovereign nation, has the legal, moral, and God given authority to take actions to benefit its citizens and to protect its good name, credit and money in times of difficulty;

    WHEREAS, it is recognized that the current time is such a time of great difficulty;

    WHEREAS, it is recognized the parasitical financial institutions and their activities are at odds with citizens of the United States of America and the good credit and money thereof;

    WHEREAS, the current indications are that the Federal Reserve System is acting to preserve the financial system currently flooded with the parasitical activities;

    WHEREAS, the current indications are that the neither the Federal Reserve System, nor the Congress of the United States, nor the people of the United States have access to the books of the institutions being preserved by the Federal Reserve, and therefor the degree of inter-connectivity and risk associated with the institutions and other entities cannot be determined;

    WHEREAS, the Federal Reserve System is accepting non-performing assets as collateral for credit with ultimate taxpayer responibility to entities not under its constitutional mandate;

    IT MUST BE CONCLUDED, that the Federal Reserve System is not acting to the benefit of the people of the United States of America, its credit, money, and good name;

    WHEREAS, it is recognized that the political will and capability of the government of the United States of America may not be up to the task of prosecuting this proclamation ; It is also recognized that this may be the only hope for the continued survival of the United States of America as the great nation as it has historically existed.

    NOW THEREFORE, it is PROCLAIMED by those supporting this Proclamation that the Congress of the United States of America FULLY NATIONALIZE the Federal Reserve System, and take full control of the credit and money of our great nation; The Congress must take whatever action necassary to seperate out, sequester, disown, or otherwise neutralize the effect of the parasitical financial activities which led to the current crisis; The Congress of the United States of America must reorganize, replace, or terminate the Federal Reserve System as appropriate; or otherwise devise a system for creation of the national currency.

    IT IS FURTHER PROCLAIMED, that the Congress of the United States of America in cooperation with the Executive of the United States of America contact allied nations and any other nation willing to participate in the overhaul of the failing and parastical financial sytem currently in operation and create new treaties and alliances as necassary to create a sane and productive system of finance with the express goal of supporting a productive national, and by extension and through voluntary cooperation, world economy;

    FURTHERMORE, it is PROCLAIMED that it should be the goal of such an international effort to maintain fair international trading practices allowing for protection in national interest of labor, resources, and productive capabilities;

    WHEREAS, it is recognized that such a move on the part of the United States of America may result in the necessity of an isolationist policy IF the other developed nations do not follow our lead; If such occurs, so be it.

    SO HELP US GOD!

  4. gene says:

    The bailouts are a crock. If our leaders had any fortitude, they would let these bloated, decadent corporations go under, get restructured and resold to companies that know what they are doing. The would stand up and reaffirm our faith in the FDIC and the banking system. They would let the uninsured money markets fold, if there is any fraud, etc. they would prosecute and get the investors at least their basic investment from the perpretrators. We would all learn a valuble lesson, invest in safe, solid ways, unless you can stand to lose what you have, and that would go for the nickel investor or the CEO of AIG. and the housing market would recover as soon as houses were again at affordable levels. But obviously that is not going to happen, we are redistributing the wealth deeply into the pockets of the wealthy from the backs of the taxpayer, and we are falling fast over a cliff of corruption!

  5. stocks says:

    With the freddie mac and fannie mae overtaking, as well as the 85 billion dollar buyout for AIG, the US government is getting into big business at a huge discount. Thats what happens with a vast amount of money, heck they could just print more, deflate the dollar, but who cares about that eh?

  6. […] Fed Bailout could cost $1 trillion of your dollars – via My Two Dollars […]

  7. Donna says:

    They really think the American people are ignorant morons, don’t they?

    http://www.youtube.com/watch?v=MO6P_yjKFR4

  8. kitty says:

    Sure, let’s let all these banks and AIG fail. Since AIG debt is owned by many other banks world-wide let them suffer losses and maybe fail too. Some analysts thought that AIG failure can be so catastrophic it’ll lead to another Great Depression, but we don’t believe them, we know better. After all our deposits are all FDIC insured. Remind me where exactly FDIC money come from? What about when FDIC reserves dry out, where would FDIC get the money then? You guessed – taxes or maybe more money printed as in inflation.

    Incidentally, all these banks and AIG employ people, say, IT personnel, tellers, and such. Let’s them be unemployed, after all they worked for these banks, so they must be responsible. All this unemployment will sure help the economy.

    And what about companies that sell, say, computer equipment to all these banks. They’ll suffer losses too. What exactly do companies do when they suffer losses. You guessed, they lay off people. Are you sure your job will be safe when more banks fail?

    Incidentally, have anybody bothered to read the details about, for example, AIG deal? The government lends money to AIG at 11%-something, and gets to control 79.9% of the company. There are parts of AIG which are quite profitable, and successful sale of these parts can actually bring more than what government loaned AIG. There is a pretty good chance that the government will actually make money here.

    As to other assets that the government will buy – it all depends on the price.Unless we know the details, how do we know it will be just a waste of money? It may actually be a good deal if some of these assets are bought at the right price.

    And if you think it cannot possibly be a good deal, look at Chrysler bailout in 1980. The government made a whole lot of money when the Chrysler rebounded. Until we know the details of the bail out, why are we so sure it’s not going to be as profitable as the Chrysler deal?

    Nope, I don’t work for the financial industry. I work for a large technology company that sells computers and stuff, and yes some of our customers are those banks…. Are you sure your companies will be unaffected if all these banks are allowed to fail?

  9. david says:

    Kitty – who wins and who loses? We lose, the shareholders/CEO’s win. That’s how it works. Last I checked, no one bailed me out of anything. The govt does not even want to help people pay their medical bills, but we can manage to bail out companies that sold their soul to make billions? These companies deserve to fail, and I don’t want to pay to fix their mistakes.

  10. gene says:

    What you think of this whole mess really depends on how you view the world. Do we like the way the economy and the world is working? Do we like giant megacorporations REGULATING every aspect of our lives? Do we like government as partner with them, feeding them billions when they whine, and letting them harvest all the cream off the top when things are good? Do we like America becoming more like the other countries in America south of us, with two classes, rich or poor? Goliath computer companies can be adequately replaced by lots of smaller ones. Giant insurance companies can be many smaller companies. The money we will spend to save these Wall Street players could easily provide insurance for hundreds of banks, like the FDIC was originally engineered for. The economy exists because of working people like us, not people who sell paper for greater and more ridiculous amount in more and faster transactions until enough people decide the worthless paper[securities] they are buying actually are worthless or at least way less valuable than what the last person paid for them. Then it comes crashing down and then the government steps in. That is the kind of economy we want? If it is, these should be happy times!

  11. […] Fed Bailout Could Cost $1 TRILLION Of Your Tax Dollars at My Two Dollars […]

  12. saleh Amin says:

    The financial crises faced today all over the world is a sure indicator of the demise of capitalism. could there be a third option for the world to adapt since both communism and capitalism has failed?

  13. kch says:

    Is there another system? I dont know. However, I think it is irrisponsible to blame an ideology (which is all capitalism or even communism is anyway). The ideology is not the problem, the human factor (GREED) is the problem.

    Take capitalism for instance… It is based on the premise of supply and demand, markets are self-regulating, and that the individual or company that makes a better mouse trap for less will prevail, so long as there is a demand for mouse traps, and other companies will either adjuster their prices, technologies, or fail. The common misconception with capitalism is the idea that companies and individuals have to MAXIMIZE their profits. I understand that companies are in business to make money, but maximizing profits is what causes businesses to cut corners in production, dump into the environment (to avoid the cost to properly dispose of materials), ship jobs to other countries where labor laws and minimum wages are less enforeable, etc. Adam Smith (the proclaimed god of capitalism) in “A Wealth of Nations” saw markets as self regulating, EXCEPT the banking system. Even Adam smith in 1776 understood the need to regulate the banks. It is to vital of an institution to allow to go unchecked.

    The current system (Federal Reserve system) is designed to cause inflation. The fractional banking system is inherently flawed. This inflation and need for credit/debt is one of the causes of the level of National debt. Who knows when the last time the U.S. national debt was 0? it was during the civil war, before the Federal Resever was in existance, we had the green back. the United States is the worst of all developed countries in the world when it comes to income disparity. We focus on GDP (Gross Demostic Product), I feel a better determining factor as to the economic stability of the nation would be per capita. Where would we be ranked then? I agree that the Federal Reserve along with corporate greed and a society that shovels the “american Dream” idea down the citizens thoarts are the root causes of the financial crises. But as long as lobbyists (there are 5 finacial lobbyists for every member of congress) and campaign contributions (it is now legal for corporations to donate unlimited amounts of fuinds to campaigns; Citizens United case)there will be no incentive for the government ot begin regulating or changing tghe current system. The rich get richer, politicians get more corrupt, and the poor bear the burden, but dont worry…we always have the jails to keep the poor from doing anything about it.

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