Here’s another campaign video from Libertarian Party Presidential candidate Bob Barr about the financial industry bailout, and the origins of the problem that supposedly make the bailout necessary:
As Barr notes, it’s really quite insane to authorize the very people who created the problem we’re dealing with today to use $ 1 trillion try to “fix” the problem they created. More importantly, though, Barr makes a point that nobody is acknowledging — if we do this now, then there is no end to the number of industries that will be beating a path to the doors of Congress asking for their bailout.
The only solution, it seems, is to throw the bums out.
In a follow-up video, Barr wonders why the Department of Justice has been so quiet as this story has unfolded:
Good question
This is not an “either/or” situation of doing nothing or buying into the Bush-Paulson money grab.
Here is a third option:
The two principle issues that are creating this financial crisis are -
1- LACK OF CONFIDENCE in the financial system stemming from the sub-prime mortgage securities
2- The inability to accurately determine the MARKET VALUE of said securities.
Submitted for your consideration:
Federally insuring the underlying sub-prime mortgages is an elegantly
simple way to accurately value the sub-prime mortgage securities and
thus restore confidence in the financial markets. And this is how to do it…
**A TRI-PARTISAN PROPOSAL:
*Federally insure the underlying sub-prime mortgages using Federal Reserve monies to cover any defaults and then charge forward all incurred expenses to the financial institutions that initially bundled the securities for market. -
Worse case scenario based on an 11% default rate- the total cost would reach approx. $77billion charged to the appropriate financial institutions.
*Who wins and who losses with this deal?
*The Taxpayers-
WINS **THE TRI-PARTISAN PROPOSAL
Not stuck with paying for something they want no part in.
*Wall Street financial industry-
WINS **THE TRI-PARTISAN PROPOSAL
They receive 100 cents on the dollar (or more – because: since the underlying sub-prime mortgages are guaranteed by the United States government the securities are an investment as safe as T-Bills) for their securities and are not nationalized by the U.S. Gov.
*The Homeowner with the sub-prime mortgage-
WINS **THE TRI-PARTISAN PROPOSAL
They get to keep their home.
*The U.S. Government-
WINS **THE TRI-PARTISAN PROPOSAL
Does not turn into a Socialist State overnight.
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
The Bailout proposed by Pres. Bush will make a very bad situation worse. It fails on so many levels that it is hard to know where to begin. Perhaps what his proposal may accomplish is the best way to start.
*THE BUSH PROPOSAL:
Use $700 BILLION to buy up the sub-prime mortgage securities currently held by the financial industry of Wall Street.
*Who wins and who losses with this deal?
*The Taxpayers-
LOSE *THE BUSH PROPOSAL
Stuck with paying for something they want no part in.
*Wall Street financial industry-
LOSE *THE BUSH PROPOSAL
They receive 33 cents (approx.) on the dollar for their sub-prime mortgage securities and are now nationalized as a another federal program of the U.S. government.
*The Homeowner with a sub-prime mortgage-
LOSE *THE BUSH PROPOSAL
They still lose their home to foreclosure.
*The U.S. Government-
LOSE *THE BUSH PROPOSAL
Becomes a Socialist State overnight
IN SUMMARY:
The Tri-partisan Proposal…
WIN/WIN/WIN/WIN/WIN
The Bush-Paulson Money Grab…
LOSE/LOSE/LOSE/LOSE
This is not an “either/or” situation of doing nothing or buying into the Bush-Paulson money grab.
-ronnie