Friday, November 28, 2008
Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.” —Ronald Reagan
In my youth Errol Flynn made A movie about a Nobleman who turned robber to take from the rich to give to the poor Saxons in Great Britain. He was called Robin Hood!
Today, it appears, the Federal government is trying to play Robin Hood, but I believe their efforts are directed in the wrong direction.When the smoke clears and the dust settles in the fight going on in Congress. They will have run the tab for the so called bail out up to three trillion dollars!
We don’t have that much free money in circulation to spend it on corporate welfare, but the key to this whole charade is that the government has printing presses that allow them to print money in vast amounts that have little or no backing. It will fall upon the taxpayer to pay for this government largess in the form of taxes. All kinds of hidden taxes and reductions or elimination of deductions that the average taxpayer has now when he/she files the annual Federal tax return.
Many tax deductions have been taken away from us in the last thirty years and I suspect many more will follow!
The following is an article released in today’s edition of the Internetedition of the Wall Street Journal. It details the massive amounts of money that are being poured, literally dumped into the institutions that control the flow of money in the name of helping the economy. But I question if the intended results will reflect the actual affect of delaying the Crash that surely must come-sooner or later- due to the fact that as each industry is “helped” another comes to Washington with it’s hand out for cash infusion. The potential list is never ending!
President Roosevelt tried to buy his way out of the Great depression,with make work programs and welfare, but if it were not for the War that started the military industrial complex. His efforts would have failed. Will we need a war to solve the dilema we now face?
We have the modern day equivalent of Robin Hood, Barrack H. Obama riding on a cloud of “CHANGE” in to Washington promising his supporters that he will give them many social welfare “goodies” at the expense of the RICH!
Meanwhile, “The Federal Reserve says it will buy up to $600 billion in mortgage-backed debt issued and backed Fannie Mae, Freddie Mac, Ginnie Mae and the Federal Home Loan Banks in a bid to lower the elevated costs of home loans at a time when the housing market and wider financial markets are still stricken by the credit crunch. The Fed plans to lend an additional $200 billion to support entities willing to buy asset-backed securities collateralized by student loans, auto loans, credit card loans and small-business loans. In announcing that move, the Fed noted that interest rates for such debt have soared at a time when all credit is deemed a riskier investment, and said that its new loan program is aimed at making more loans available to consumers and businesses”.
SOURCE: JOSEPH SCHUMAN OF THE WALL STREET JOURNAL
Yesterday’s moves mean the loans and other assets listed on the Fed’s books will probably soon be at around $3 trillion — triple what it was in mid-September, Business Week notes. And The Wall Street Journal adds that Washington at this point has now “made more than $4 trillion of financial commitments, ranging from direct investments to debt guarantees, through a wide range of rescue programs hatched by the Fed, Treasury and Federal Deposit Insurance Corp,” and that this number “could grow if markets worsen.” The message from the Fed and the Treasury, as the New York Times puts it, is “that they would print as much money as needed to revive the nation’s crippled banking system.” And while yesterday’s new measures are “gargantuan,” they were “probably not the last of the federal government’s initiatives to absorb the shocks that began with losses on sub prime mortgages and have spread to every corner of the economy,”
Analysts tell report that “the (bail-out) program will do little to reduce the tidal wave of home foreclosures … because most of the foreclosures are on subprime mortgages and other high-risk loans that were not bought or guaranteed by government-sponsored finance companies like Fannie Mae.” Bloomberg points out while the new programs are supposed to make credit more accessible to nervous consumers, those consumers may still not want to spend: “Households and lenders may not respond much because of the wealth destruction from plunging property and stock values, and the deepening economic slump.
DESPITE ALL THIS MONEY INFUSION INTO THE INSTITUTIONS THAT CONTROL OUR MONEY FLOW;
The Washington Post reports that “fueled by rising unemployment and food prices, the number of Americans on food stamps is poised to exceed 30 million for the first time this month, surpassing the historic high set in 2005 after Hurricane Katrina.”
It appears to me that we need more fiscal responsibility from our elected “Princes” in Congress, and less, not more hand outs to sate the appetite of a corrupt and inefficient monetary system that needs to be put on a diet not gorged with tax payers IOU’s!