And So I Go: Yesterday, Today and Tomorrow

CBO says taxpayers on the hook for Financial Bail Outs Forever While President lies to Wall Street and Public

Posted on: April 26, 2010

There is a big hullabaloo about immigration now that Arizonans have finally taken the  protection of their borders and the illegal alien problem into their own hands since the federal government is doing nothing to protect the public.   But don’t let this detract you from the “other hand”.  Senate Majority Leader Reid is pushing for a fast vote on the Finance Reform Bill which is another Bail Out forever more package for Wall Street!  So people get on the phones and the emails and let Congress know how you feel about this.  Otherwise  you the tax payer will be taking the hit every time Wall Street bankers make a bad investment but you will NEVER share in any profits.  BB

From The Heritage Foundation today:

Now the President is bringing the same audacity to the financial regulatory debate, telling a handpicked audience at New York’s Cooper Union: “Now, there is a legitimate debate taking place about how best to ensure taxpayers are held harmless in this process. But what is not legitimate is to suggest that we’re enabling or encouraging future taxpayer bailouts, as some have claimed. That may make for a good sound bite, but it’s not factually accurate.”  (Obama tells  another lie!  BB)

Before President Obama continues to go around accusing others of lacking legitimacy, he should read the official cost estimate of the financial regulation bill released by the Congressional Budget Office last Thursday. Assessing the budgetary impact of the $50 billion that “systemically important financial firms” would have to pay in assessments to pay for the bill’s “Orderly Resolution Fund,” the CBO writes:

The total amount collected from assessments is estimated to be about $58 billion through 2020. But such assessments would become an additional business expense for companies required to pay them. Those additional expenses would result in decreases in taxable income somewhere in the economy, which would produce a loss of government revenue from income and payroll taxes that would partially offset the revenue collected from the assessment itself.

In other words, these financial firms have to get that $58 billion dollars from somewhere, and that somewhere is you. Now the Obama administration may argue that they actually oppose the creation of the resolution fund. But American taxpayers should be even more frightened when they find out why the Obama administration opposes it New York T. Thimes reports: “The Obama administration does not support the $50 billion fund, partly out of concern that more money may be needed if one or more big financial firms ever collapse and that creating a fund could make it difficult to authorize more money.”  (The fund would restrict the thieves to just putting their hands in the one cookie jar!  So sad.  BB) AEI’s Peter Wallison details CBO how this provision could put taxpayer on the hook for much larger sums:

If the Dodd-Obama resolution plan is ever actually put to use, the direct or indirect costs could be many times greater. For example, the bill authorizes the Federal Deposit Insurance Corporation to borrow from the Treasury “up to 90 percent of the fair value of assets” of any company the FDIC is resolving. Yet one institution alone—Citigroup—has assets currently valued at about $1.8 trillion. The potential costs of resolving it (not to mention others) would be spectacularly higher than $50 billion. In short, the $50 billion in the resolution fund is a political number—a fraction of what the FDIC is authorized to borrow and spend.

Why would this vast sum be necessary? The Dodd bill has one answer. It says that the FDIC “may make additional payments,” over and above what a claimant might be entitled to in bankruptcy, if these payments are necessary “to minimize losses” to the FDIC “from the orderly liquidation” of the failing firm.

In other words, the agency would be able to borrow huge sums so that it could make more generous payments to creditors than they would receive in a bankruptcy. Generous payments to creditors would certainly make unwinding a firm “orderly”—but it would also encourage lending to the too-big-to-fail financial institutions while disadvantaging smaller, less favored institutions. This in itself will have a profound and destructive effect on competition.

This is the core problem of the Dodd-Obama Wall Street Bailout Bill: it gives the same regulators that missed the beginning of the last crisis the authority to engineer the exact same politically motivated bailouts (see General Motors, Chrsyler) for the next one.

There is a better way. Congress should modernize bankruptcy laws to create an expedited method to restructure and close large and complex financial firms. Such an approach would not give regulators virtually unlimited powers and would free the process from political interference by giving control to an unbiased court system that already has extensive experience with complex modern firms.

Please remember what I said in my last post:  This is just the first step towards turning the financial industry of our nation over to the INTERNATIONAL  financiers.  Global government!  BB

See also:

Kevin Hassett

Goldman Sachs Money for Obama Wins at Monopoly: Kevin Hassett

Goldman Money for Obama Wins at Monopoly

April 26 (Bloomberg) — The financial overhaul bill creeping toward law is more than a thousand pages, but it has a simple story line. President Barack Obama and the Democrats have decided to turn Goldman Sachs Group Inc. and a few other financial giants into organizations that resemble AT&T Corp. in the 1950s.

Government rules will establish quasi-monopolies, and discourage competition. In exchange, the affected firms will be exposed to constant bureaucratic meddling, but will have the ability to manage this by influencing political appointments.

3 Responses to "CBO says taxpayers on the hook for Financial Bail Outs Forever While President lies to Wall Street and Public"

This has always been the plan. Many people seem to think that there is no, nor ever was a conspiracy. Yet, I feel that this may not be true. If you would look at what has happened in only a year and a half, you will see that this administration has literally destroyed just about every aspect of the American way of life, and nobody is doing anything to stop it.

You can say the Tea Party people are standing up to the Congress. I say, Big Deal, it’s all talk and no action, accept on Obama’s part.

It amazes me how things are happening at warp speed on the destruction side of the playing field and as slow as can be on the other side of the field where the Constitution backers stand. A turtle could move faster than those who are actually protesting all the wrong doing in Congress.

Yet has anyone noticed these morons are still at it. Nothing is stopping them. They are still feverishly working on taking down the rest of the government and they have a deadline of the mid-term election.

The Republicans and the Independents will still be having there little town hall meetings and Tea Parties, but it will be of no consequence because the damage will be done and irreversible.

So what do you suggest people do Snappy? Drop a bomb on the Capital Building perhaps? Or maybe the White House?

The Democrats control Congress and Obama is in the White House. this is a fact. And they know they have only until November to get their dirty deeds done because after this show the Democrats will be a long time getting a majority in congress again. Until the Republicans take back congress there is no possibility of doing anything to change what is happening. Then there still won’t be enough Republicans to repeal health care or any other program. BUT there will be enough to stop funding on these programs. Unfortunately both parties gave Obama a slush fund with the Stimulus Bill and the huge Budget last year so he can move ahead on a great deal without congress. This is why they are pushing for the Financial Reform bill because it gives the Treasury Secretary almost unlimited power to spend this money any way he wants to. After 2012 the Congress and President will have a real mess to clean up. I think however that it won’t be business as usual in Washington. I think all the new federal employees hired to fill the 121 new agencies for Health Care reform will be fired and the agencies shut down. I believe the departments of Education will be shut down and go back to the states. I believe the heavy grants programs will be eliminated and any funds in department slush funds for these grants will be used to pay our debts. We just have to make sure we get the right tough people in office in both Congress and especially the President. No more mistakes like Scott Brown (tho we had to go with him because the other was so much worse). BB

Brenda, you must have had a rough day. No, I would not ever suggest that violence is the answer, because it isn’t. The Tea Party people and the peaceful rallies they have been holding are the best example of how “the People” can let their voices be heard.

I am frustrated with how slow justice works. We need a lot more action, like the Democrats are putting forth.

We need to Nationalize the Tea Party movement. I don’t mean back any particular candidate, nor do I mean start a 3rd Party. What I mean is Nationalize the Tea Party, have a National plan involving all the Tea Party groups. We need to raise Money for ads, we need to inundate the Internet with web sites, blogs, ads, Articles encouraging, and asking people, to join us, help us take back America. We need a Political machine like Obama has. It can be done, we just need to raise the awareness and encourage others to join.

We need the Young Republicans to go out and get more young Republicans to join the Party. We need Tea Party people to make a genuine effort to get friends, family and neighbors to join the Tea Party movement.

They are doing a good job and in a peaceful, manner and this is the way we need to continue, but with more vigor.

We need to make it clear that people, all people need to stand together to take back the idea of an America where all people are Free.

We need to make it clear to everyone on the Right (which have been very slow to move) and the Independents, that there is no more time. Time is running out. If we are to win in November, we need a lot more action. We need to bring together Nationally the brainpower, the idea people, the ad groups to remind people that the job won’t get done unless they all get involved and help.

I just think we need to make everyone aware of the fact that TIME is of the essence, and from now until November it is the most important factor in reversing the damage that has already been done, and it’s the only “constant” in the whole game. It’s like a like a Football game, you play until the clock runs out, then who ever has t he most points wins.

This is the game of a lifetime. This is the Championship game of all games to be played in this country. The clock is ticking, and who ever has the most voters on their side wins in November. Election day the game is over. I certainly want the American people to win this one.

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