Saturday, September 27, 2008

Congress Passes Precedent Setting Bailout Bill Revealing Its Communist Ideals -- The American Taxpayer (the middle class) Will Again Foot The Bill

Congress has been extremely quiet about the last major economic "bailout" bill which they passed back in July of 2008 to the tune of $160 billion dollars. By the time this latest bailout package (I will not call this latest con of theirs a stimulus package) is through, it could well exceed a trillion dollars, putting the already financially strapped middle class American household into a situation which they can now never get out from under.

This while the irresponsible gluttons on Wall Street can now go right back to taking insane risks (the wealthy ones that is -- since many of the lower paid Wall Street Proletariat have now been left wiped out financially and jobless; the result of the sub prime mortgage fiasco) , since as Congress has once again shown us, the American Proletariat will always be the ones footing the bills for the wealthy elite and their unforgivable and unnecessary debacles.

What is perhaps most frightening in all this is that many Americans have bought into this Federal Reserve System orchestrated and Congress supported SCAM, believing that it needed to be done in exactly the way that the Bush Administration claimed it had.

However, what Congress should have done was to allow these banks to go out of business, which would have forced the housing market to correct itself in the logical way in which it should have more than two decades ago. When the prices of homes increased to well beyond what they were worth.

Home prices in most areas of the United States are absurdly high in the present day (even after their recent decline in value), which is why your average American citizen cannot even contemplate owning one.

Moreover, who wants to buy up the bad debt of these corporations? It's been this purchasing of bad debt through junk bonds and the derivatives' market that has been largely responsible for this latest financial meltdown.

That is precisely why they call these so called investments JUNK!

In the old days when companies went belly up, they weren't revived -- they were buried as they should have been.

Moreover, all that Americans have gained by this latest and grossly irresponsible spending bill of Congresses, is enough debt to keep their great grandchildren still paying it off 50 years from now.

However, the truth of the matter is that they will never even pay off the interest on this debt, much less the debt itself, and neither the Federal Reserve nor the Congress expect them to.

This "criminal bill" will just make them further indebted to the Illuminati and their counterfeiting Federal Reserve System -- exactly what the Illuminati's bankers had planned for the American working class since they began to take our government over, through the creation of the first central bank in this country back in the early 1800's - The First Bank Of The United States.

Once again the Illuminati have gotten their way, and in the process shown us just effectively they have taken control of and corrupted our own political representatives.

What Congress has done in creating this latest bailout plan is a truly horrifying reminder that our Constitutional Republic is dead, and that in its place reigns a Totalitarian oligarchy whose interests lie in destroying what is left of America, her people, and the freedoms which this once great land guaranteed to each of us.

Also see:

Richard W. Behan's free E-book:

The Fraudulent War

The Facts About The Bush Administration's 'War On Terror'

A successful bailout? Watch lending between banks

Sep 28, 3:20 PM (ET)

WASHINGTON (AP) - The New Deal it is not. The government's biggest economic bailout since the Great Depression is aimed not at relieving unemployment or reforming questionable business practices, but at resuscitating financial markets debilitated by lousy bets on the housing market.

Put simply, the hastily crafted plan lawmakers agreed to in principle on Sunday is intended to revive jittery and fragile banks on Wall Street with enough money - by using taxpayer funds to purchase billions upon billions of their worst mortgage-related assets - so that lending, the lifeblood of the American economy, flows freely again.

If it is working, signs will emerge almost immediately in the interest rates on U.S. bonds and in an array of obscure - but crucial - financial benchmarks.

Loans - particularly those made from one bank to another - would be more available and less expensive in a matter of days, if not weeks.

And as the government gobbles the banks' toxic assets, the industry would gain the confidence and strength needed to make it easier and cheaper for families to borrow for homes, cars and college - and for businesses to secure ample debt to pay for plants, equipment and workers.

Still, rising unemployment, high energy prices and falling real estate values will not disappear overnight.

"At first, there will be some sort of sigh of relief, which I'm afraid would be misplaced, because when you get through the shorter-term terror, you're left with an economic landscape that will be very fragile," said Michael Farr, president of Farr, Miller & Washington, which manages investment portfolios for people and businesses.

Were the clogged credit markets of the past year - and more crucially, the past few weeks - left to fester without a massive government intervention, the United States faced a financial calamity that could have plunged the economy into a deep recession, putting the livelihoods and investments of millions of ordinary Americans at risk, President Bush and Federal Reserve Chairman Ben Bernanke warned.

"Bernanke told us that our American economy's arteries, our financial system, is clogged, and if we don't act, the patient will surely suffer a heart attack maybe next week, maybe in six months, but it will happen," said Sen. Chuck Schumer, D-N.Y., chairman of Congress' Joint Economic Committee.

Once the liquidity floodgates have been opened - the government will have as much as $700 billion at its disposal to buy banks' bad mortgages and other rotten assets - the benefits of the bailout proposed by Treasury Secretary Henry Paulson and modified by Congress are expected to trickle down through the rest of the economy. But Americans should be braced to feel economic pain well into next year.

More people will lose their jobs, foreclosures will go up, paychecks will be strained and home values - people's single biggest asset - will keep falling, experts predict.

Even if the plan is successful, many predict the economy will probably shrink in the final quarter of this year and in the first quarter of next year, meeting the classic definition of a recession. The unemployment rate - now at a five-year high of 6.1 percent - is expected to hit 7 or 7.5 percent by late 2009. That would be the highest jobless rate since after the 1990-91 recession.

So, how exactly will we know if the credit clog is breaking up?

Some of the banking industry's first responses won't be immediately visible to most Americans, but they are critical to the proper functioning of the U.S. financial system.

For instance, a drop in a crucial short-term lending rate called the London Interbank Offered Rate, or Libor, would be a telltale sign that banks are less anxious about extending credit to each other - and the rest of us.

Libor is the rate many banks pay for the short-term loans essential to their daily operations. It's also the base rate for an enormous amount of commercial lending and for many adjustable-rate mortgages.

Another sign of growing confidence in financial markets would be lower rates on "commercial paper," a crucial short-term borrowing mechanism that many companies rely on for financing day-to-day operations, including payrolls and other expenses.

Economists said a properly designed bailout should also cause interest rates on Treasury securities to rise relatively quickly.

If that happens, it would signal that investors - who have been flocking to Treasurys because of their perceived safety relative to other investments - are more willing to bet on riskier types of debt and securities.

"The recovery process is going to come in stages, not in one fell swoop," said Terry Connelly, dean of Golden Gate University's Ageno School of Business. "The credit markets had a stroke. We are in intensive care now. We will have to learn how to walk and talk again."

As credit markets thaw, rates should also begin to fall on a type of corporate-debt insurance known as credit default swaps.

While not a household word, these derivatives figured prominently in the country's financial crisis. Prices for credit default swaps soared in the aftermath of the Lehman Brothers' bankruptcy and pushed American International Group Inc. (AIG), a major insurer of this kind of corporate debt, into the hands of the government following an $85 billion emergency loan funded by taxpayers.

Assuming these more obscure corners of the financial markets are on solid footing again, consumers should eventually begin to have an easier time taking out loans for homes, cars, furniture and college.

Over time, a healthier financial system should help the value of the dollar rise versus other currencies, reflecting renewed confidence in the U.S. economy and blunting inflationary pressures that have made Americans feel less wealthy.

But it is only after a wide range of industries feel confident that the economic and financial conditions have fully recovered that they will start to ramp up hiring, perhaps by 2010. House prices should stop falling in the summer of 2009 and may start rising in 2010, economists said.

In the short term, there are several economic reports to watch for clues about whether credit conditions are improving:

- The Federal Reserve's quarterly senior loan officers' survey, which tracks banks' appetite to lend;

- The Fed's weekly report on emergency loans provided to banks and investment firms;

- Freddie Mac' (FRE)s weekly report on mortgage rates;

- The Mortgage Bankers Association's quarterly survey of home foreclosures and delinquencies.

The heart of the bailout plan gives the government authority to relieve financial institutions of the distressed mortgages and other bad assets on their books. Getting dodgy assets off the books of hobbled banks will make it easier for them to attract fresh capital and boost lending.

As Lehman, AIG and other major financial companies racked up huge losses and saw more coming, credit problems spread globally, firms hoarded cash and they all clamped down on lending. That crimped consumer and business spending, and dragged down the economy - a vicious cycle Washington lawmakers hope to break with this historic bailout.

"It's just a huge negative psychology that will be hard to turn around," said William Dunkelberg, chief economist for the National Federation of Independent Business and an economics professor at Temple University.

Adds Sean Snaith, economics professor at the University of Central Florida: "If someone slights you today, it is going to be hard to immediately trust them the next day. It will take time for that confidence to be restored."

Also see:

The $700 Billion Bailout: One More Weapon of Mass Deception

By Richard W. Behan, AlterNet. Posted September 22, 2008

The American economy needs help, but there are other, far more equitable ways to accomplish it.

Not since the Bush administration's lies about Iraq's "weapons of mass destruction" have the American people been so despicably misled.

The Bush administration's proposal to buy, with taxpayers' money, $700 billion of toxic liabilities from the corporate financial titans of Wall Street is a fraud. It is by no means necessary, as Treasury Secretary Henry Paulson claims in the agency's Fact Sheet, "to promote market stability, and help protect American families and the U.S. economy."

It is necessary only to assure the financial survival of Wall Street banks and brokerages, the administration's most loyal supporters and its greatest political contributors -- and in large measure the cause of the financial meltdown the country is facing.

These financial corporations lobbied ferociously to be free of government regulation. Had they not succeeded, they could not have done what they did next: They created and leveraged trillions of dollars of complex "derivatives" -- mortgage-backed securities, collateralized debt obligations and credit default swaps -- all riding on an unprecedented real estate bubble stimulated by their frenzy of creative finance. When the bubble burst, as bubbles do, many of these financial titans faced bankruptcy, their obligations far exceeding their assets.

The $700 billion of taxpayers' money, in the plan suggested by Paulson, will buy enough of the toxic obligations to allow the companies to avoid bankruptcy. Not coincidentally, a major beneficiary of the scheme will be the investment bank Goldman Sachs. Paulson resigned as CEO of Goldman Sachs to become the Treasury secretary in 2006, having amassed a personal net worth of $700 million during his 32-year tenure at the bank (on average, $21.9 million per year).

We need to "remove the distressed assets from the financial system," Paulson suggests. Relieved of the burden, the great Wall Street banks can then regain, presumably, its folksy function: assuring that "money and capital flow to and from households and businesses to pay for home loans, school loans and investments that create jobs."

For the good of the American economy, Paulson is correct that credit needs to flow and the distressed assets need to be removed. He is not correct that credit needs to flow from Goldman Sachs and other Wall Street financial houses. And the distressed assets do not have to be assumed by the taxpayers.

There are other, far more equitable and justified ways to accomplish both.

The distressed assets -- that is, the losses -- can and should be absorbed by the executives, directors and stockholders of the corporate banks and other institutions that propagated the financial firestorm. They can and should, as the dictates of the free market insist, stand accountable for their actions and accept bankruptcy. It is not the responsibility of the American taxpayers to shield them.

Paulson wants to rescue Wall Street so Wall Street, he assures us, can get back to lending. That is certain to save Paulson's former firm and the others, but it is by no means certain that credit will then flow to "home loans, school loans and investments that create jobs." The Wall Street firms are far more likely to revive their lucrative trade in complex and esoteric financial "products."

Seven hundred billion dollars is a lot of money. It is more than we've spent so far on the administration's fraudulent "war on terror" (See "The Mega-Lie Called the 'War on Terror': A Masterpiece of Propaganda".) Is it not better public policy to channel the money to "households and businesses" in some other, more direct, more effective and far more reliable way?

There are hundreds, if not thousands, of Main Street banks and thrift institutions that played no part in the real estate securitization/derivatives game. Certainly the $700 billion could be made available to them instead, at low but positive interest. Or, special publicly held banks could be set up in statute and capitalized with the $700 billion.

The crisis is real, but there are ways to serve the nation's interests at large and even to earn a modest return on its assets. We do not need to subsidize the failure of Wall Street and hope thereafter for better days.

The welfare of the Wall Street financiers should not be the focus of public policy, and this clever attempt by the Bush administration is a perversion of decent governance. We should not be stampeded into the greatest corporate theft of public assets, arguably, in the nation's history. Instead, to paraphrase one of our presidential campaigns, we need to put our country first and stop Paulson dead in his tracks.

See more stories tagged with: bush, economy, housing bubble, debt crisis, paulson, bailout, fannie mae, freddie mac, financial crisis, lehman, aig

Richard W. Behan lives and writes on Lopez Island, Wash. He has published dozens of articles exposing the criminal wars of the Bush administration; they are summarized in an electronic book, The Fraudulent War, available in PDF format at He can be reached at

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Senate sends big spending bill to Bush to sign

Sep 27, 7:27 PM (ET)

WASHINGTON (AP) - Automakers gained $25 billion in taxpayer-subsidized loans and oil companies won elimination of a long-standing ban on drilling off the Atlantic and Pacific coasts as the Senate passed a sprawling spending bill Saturday.

The 78-12 vote sent the $634 billion measure to President Bush, who was expected to sign it even though it spends more money and contains more pet projects than he would have liked.

The measure is needed to keep the government operating beyond the current budget year, which ends Tuesday. As a result, the legislation is one of the few bills this election year that simply must pass. Bush's signature would mean Congress could avoid a lame-duck session after the Nov. 4 election.

White House spokesman Tony Fratto said the bill "stands as a reminder of the failure of the Democratic Congress to fund the government in regular order." But, he said, it "puts the United States one step closer to ending our dependence on foreign sources of energy" by lifting the offshore drilling ban and opening up huge reserves of oil shale in the West.

The Pentagon is in line for a record budget. In addition to $70 billion approved this summer for operations in Iraq and Afghanistan, the Defense Department would receive $488 billion, a 6 percent increase. The spending bill also offers aid to victims of flooding in the Midwest and recent hurricanes across the Gulf Coast.

Such a huge bill usually would dominate the end-of-session agenda on Capitol Hill. But it went below the radar screen because attention focused on the congressional bailout of Wall Street.

The measure settles dozens of battles that have brewed for months between the Democrats who run Congress and the White House and its GOP allies.

The administration won approval of the defense budget. Democrats wrested concessions from the White House on $23 billion for disaster-ravaged states, a doubling of low-income heating subsidies, and smaller spending items such as $24 million more for food shipments to the elderly.

The loan package for automakers would reward them with $25 billion in below-market loans, costing taxpayers $7.5 billion to subsidize the retooling of plants and development of technologies to help U.S. carmakers to build cleaner, more fuel efficient cars. Companies would not have to begin repaying the loans for five years, drawing objections from Sen. Jon Kyl, R-Ariz., who predicted they would return for more help when the money is due.

Republicans made ending the coastal drilling ban a central campaign issue this summer as $4-plus per gallon gasoline stoked voter anger and turned public opinion in favor of more exploration.

The action does not mean drilling is imminent and still leaves the oil-rich eastern Gulf of Mexico off limits. But it could set the stage for the government to offer leases in some Atlantic federal waters as early as 2011.

Also in the bill is money to avert a shortfall in Pell college aid grants and solve problems in the Women, Infants and Children program delivering healthy foods to the poor.

In addition to the Pentagon's budget, there is $40 billion for the Homeland Security Department and $73 billion for veterans' programs and military base construction projects. Combined with the Defense Department's spending, that amounts to about 60 percent of the budget work Congress must pass each year.

Democrats came under criticism from the GOP for short-circuiting the normal process for a spending bill after it became clear that Republicans would force difficult votes on the drilling ban.

Democrats also wanted to avoid an election-year clash with Bush that would have played in his favor. They are willing to take their chances that Democrat Barack Obama will be elected president in November and permit increases for scores of programs squeezed by Bush each year.

Bush had threatened to veto bills that did not cut the number and cost of pet projects in half or cause agency operating budgets to exceed his request. Democrats ignored the edict as they drafted the plan and the White House has apparently backed down.

Taxpayers for Common Sense, a watchdog group, discovered 2,322 pet projects totaling $6.6 billion. That included 2,025 in the defense portion alone that cost a total of $4.9 billion. Critics of such projects are likely to discover numerous examples of links to lobbyists and campaign contributions.
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