Bailout Update

Apparently, as are much things in life, the initial facts about the ‘new’ bailout package were not nescessarily reported accurately by news outlets.  I was just reading Daily Kos and they are doing an ‘oops’ too.

The bailout package is not the blatant pork barrel package that it sounded like this morning.   What the Senate did was take several issues on the table already: AMT tax, disater relief, energy credits, and a few other items and added it to the package in the hopes of getting those items passed with more votes than typically would have occured (e.g. provide more political coverage).  So, my initial rant on this new package was a little off base – particularly to my accusation against the Republicans.

It’s funny, the Senate is usually more level headed, less partisan, and more conservative (not politically, but acting) then the House. It did seem odd they were adding all these ‘sweenters’ from the get-go without further negotiations with the House.  

Now, I still have a problem with the package – particularly the AMT tax.  I fully agree that the tax does need to be changed as it puts an added burden on many middle class families.  However, my concern is the same as it was this morning and the same the Congress and various Presidential administrations have had for many years – that there is no offset for reducing the AMT.  Tax receipts are being reduced significantly without cuts in spending or tax increases in other places.  Again, I think it is a ‘what the hell’ philosophy – we are in bad debt already, we are making it worse, why not add more too it and do the dirty deed we’ve been avoiding for years.   I don’t think it’s the proper way of addressing the need to change the AMT.

As for the other ‘sweetners’ they do not seem as significant as the the press reported earlier in the day and are not significant drivers in boosting the cost of the bill.  Most of them are can’t lose propositions during Congressional campaigning and eases some of the ire of the voter.  In a lot of ways, it backs many into a corner who won’t vote for the package – what Congressman wants to come out against disater relief tax credits or energy credits?

I am currently watching the Senate vote and the yea’s are very bi-partisan.  It’s interesting, just like in the House, some of those in a dog fight election voted nea (Elizabeth Dole, for example).  It just passed 74-25 with only Kennedy not voting.

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One Response

  1. I wouldn’t be surprised if the recent overhaul of bankruptcy legislation was designed for this economic situation; it turns human debtors into indentured servants. And that is necessary for the following reason:

    The ’sssssss’ we are noticing with this credit crunch is just the leak before the big burst. This credit bubble has been inflated by a logorithmic base 10 scale of dollar creation.
    The practice of using 90% of ‘real’ wealth for lending that can then be invested and re-deposited for recycling again and again for more and more credit probably has the same effect of simply printing more money. The difference between those two ways of creating wealth is that creating money by credit inflation redistributes wealth for the benefit of financiers. And printed money is real; not fake.

    This credit bubble burst should, then, be creating a shortage of money. And the cure may be as simple as the government printing more money. The only problem with that scheme is that there would not be another bubble to burst to correct for over-inflation. Printed dollars don’t evaporate away like the ones the financiers are trying to sell taxpayers now.

    And that is why those who have engineered this bubble need those new draconian bankruptcy laws. Only wage earners can turn this fake money into real wealth. And that is why the Bush administration and other supporters of the great bailout plan are adamantly against giving bankruptcy judges the right to restructure debt according to who is most responsible for making bad loans.

    Bryant Arms

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