Where’s MY Bailout????

“The greatest dangers to liberty lurk in the insidious encroachment by men of zeal, well meaning but without understanding.”

~Supreme Court Justice Louis Brandeis~

            The freedom of individuals from compulsion or coercion never was, and is not now, the normal state of human affairs. The normal state for the ordinary person is tyranny, arbitrary control and abuse mainly by their own government. While imperfect in its execution, the founders of our nation sought to make an exception to this ugly part of mankind’s history. Unfortunately, at the urging of the American people, we are unwittingly in the process of returning to mankind’s normal state of affairs. 

            Americans demand that Congress spend trillions of dollars on farm subsidies, business bailouts, education subsidies, Social Security, Medicare and prescription drugs and other elements of a welfare state. The problem is that Congress produces nothing. Whatever Congress wishes to give, it has to first take other people’s money. Thus, at the root of the welfare state is the immorality of intimidation, threats and coercion backed up with the threat of violence by the agents of the U.S. Congress. In order for Congress to do what some Americans deem as good, it must first do evil. It must do that which if done privately would mean a jail sentence; namely, take the property of one American to give to another. 

            According to a recent Washington Post article there are nearly 42,000 highly paid registered lobbyists in Washington in 2007 that spent $4.8 billion lobbying the White House, Congress and various agencies on behalf of various interest groups. Political action committees, private donors and companies give billions of dollars to political campaigns. My question to you: “Do you think that these people are spending billions of dollars to assist presidents and congressmen to better perform their sworn oath of office to preserve, protect and defend the U.S. Constitution?” If you do, you’re a fine candidate for a straitjacket. For the most part, the money is being spent to get politicians and government officials to use their coercive power to create a favor or special privilege for one American at the expense of some other American.

            Yes my friends, sometimes it’s just that easy to lose something as precious as our liberties. There is no question that if one were to ask whether we Americans are moving towards more liberty or more government control over our lives, the answer would unambiguously be the latter — more government control over our lives. We might have reached a point where the trend may just be irreversible and that is a true tragedy for if liberty is lost in America, it will be lost for all times and all places. The recent $700 billion bailout has been foisted upon is “for the good of the American people” may just be the final nail in the coffin of our rugged individuality that was the cornerstone of the American dream.

            What I wish to explore today might be a possible solution that may stimulate the American economy, give assistance to those who really need it, and release the free market forces in America that is the envy of the world. First please allow me to just ‘touch’ on the pork, I mean bailout bill that just put our children $1 trillion deeper into debt, with only a dim ray of “hope” and sheer speculation that the Fed might recover it. Do I need to remind anyone that even by our own government’s standards our national deficit is now more than $10 trillion? Congratulations America – you’ve now reached triple gold on your credit line.

            Included from special interest groups lobbying congress were,

1. $6 million in tax breaks for wooden arrow manufacturers in Oregon;

2. $148 million in tax breaks for wool-producing companies,

3. $128 million in tax breaks for the manufacturers of car racing tracks;

4. $10 million in tax breaks to small television and film producers;

5. $223 million in tax breaks for Alaskan fisherman;

6. $33 million for corporations operating in American Samoa;

7. $192 million in tax breaks for rum producers in the Puerto Rico and the Virgin Islands.

            While tax decreases can stimulate the economy, packaging them as economic teasers, sweeteners and pork in this particular “crisis rescue bill” (for the sake of selling it to constituents) is simply unethical and one more sign that our government is fiscally reckless and totally out of control. Bribing congressional naysayers only fattens financial pigs and feeds the greed machine that got us into this problem in the first place. Whatever happened to our founders’ fiscal prudence: “Live within your means,” “Be content with what you have,” “Cut spending,” “Debt is not the answer” or “Greed is the root of all types of evil”?

            Tax breaks can stimulate the economy but padding the pork will only push us farther into the abyss. Washington likes to play by the numbers so let’s play the numbers. As of mid-2008, the total amount of active home mortgages is worth roughly $660 billion, with about $80 billion of that representing new mortgages just this year and the rest representing existing mortgages. Of that $580 billion or so in existing mortgages, about one-third ($193.3 billion) will be up for renewal during the year. Given the rather immense amount of money being renewed each year, it is a surprise to hear how many people sign and send back the mortgage renewal form sent to them by their banks, even though the rate being offered is not discounted at all. Currently the number sits at @ 30 percent. Anyone see anything wrong with this picture?

            The sad part of this whole fiasco is that only 10 percent of the total is in default. We have some government programs such as the CRA (Community Reinvestment Act), sub-prime mortgage rate, and a policy used by banks to finance mortgages without such harsh requirements as accepting applications from people who have such things as jobs or a secure income. Last time I checked an unemployment check didn’t qualify as secure income. Congress pressured the mortgage companies to make these toxic loans because they wanted everyone to have their slice of the American dream. The part congress forgot was that a major part of the dream was that the dream MUST be earned.

            All right now, step 1, since the government insist in being involved, their role should be as limited as possible. Washington should NEVER be in the real estate business. They already have a long and distinguished record with mismanaging our natural parks system so they should stay in their box. Since the democrats have robbed the bank, with the republicans driving the getaway car, this leads to step 2. Use part of the loot, I mean bail out money, and pay off all the toxic mortgages. Some people were saying with that amount of money we could give everyone in America $1 million dollars. This sounds like it would stimulate the economy but sadly human nature would raise its ugly head and a majority of people would quite working. Without their contribution to the work force, productivity would fall off and any gains in the short turn would evaporate within a year and this would lead to an even greater national debt. Just paying off the bad mortgages would free up the homebuyers disposable income for other purchases that would actually stimulate the economy.

            Once this step is underway move on to step 3. Enforce strict loan requirements. If you don’t have a steady income OR make enough money, you don’t qualify, it’s that simple. We’re sorry you don’t make enough money but at least you live in a country where your options are limited only by your own desire to achieve your slice of the dream. What is scaring away investors is since the banks can’t collect the money loaned they can see no reason to invest because they see no return on their investment. At this point do not grant ANY subprime mortgages. You charge the interest rate that the free market dictates and supports. And while you’re at it, this moves us up to step 4. Place the remainder of the loot, @ $6.3 billion, in an interest bearing savings account in the name of the American people. If a governor of a rather large northern state can do it, you can too.

            Most of the remaining steps would cover the topics of expanding and stimulating the economy. Step 5, cut the capital gains tax. This would be a major incentive for investors. Currently they see no reason to invest their money if the US government will take an ever increasing amount of their profits. Step 6, eliminate the corporate income tax. With more cash flow, businesses would be more willing to reinvest and grow by creating new jobs to fill their needs. Step 6 has an added bonus, strictly reign in CEO packages and severely punish bad behavior. No more “Oops, we messed up. Where’s our bail out?” I tell you where it’s at buddy. It’s in the front pants pocket of your new cell mate “Bubba”. “What’s that?””You want your Lawyer?””He’s in the cell next to you”.

            I’m sorry my friends, I almost flew off on a tangent. Point is we got into this mess by either not paying attention or knowing exactly what we were doing and not caring and hoping no one was watching. Im not going to lie and say it’s going to be easy. We didn’t get in this mess overnight so we won’t get out of it overnight.