Saturday, October 4, 2008

A Strong Economy Requires A Strong Foundation

The passage of the $2 TrillionDollar "Bailout/Rescue" plan by the Congress on Friday shows the lack of leadership and foresight that we have in our Federal Government. The Democratic Leadership failed to seize a golden opportunity to present a vision and plan for real change. The Republican Leadership failed to stop the largest welfare check ever written. The Congress was lead into another Iraq by the same Administration that led them into the first one. Again the Congress blindly accepted the lies they were told by the Bush Administration without sitting back and looking at the situation logically.

Both Presidential candidates are basing their campaigns on "Change". The "Bailout/Rescue" Legislation is not change, it is a reinforcement of the economic witchcraft preached by the trickle down Reagan crowd. Senator McCain of course sees this legislation as change so there is not any disappointment in his support of the legislation, he would not be expected to support anything other than legislation that would rescue his millionaire friends who dwell in the same alternate universe as he does. Senator Obama on the other hand should have stood up for "change we could believe in". Sadly, he did not.

Senator Obama failed to blaze a new path and offer a better solution. He bought into the lies of the Bush Administration just as so many others in the Congress and the media. The American People had it right. The first "Bailout Bill" failed in the House because the Congress was afraid of the overwhelming negative response that they received from the People. Because of the grass roots opposition to the first piece of legislation, enough Republican Congress people voted "no", not because of conviction but for fear of losing their seat in the upcoming election.

The current Political climate aside this legislation is fundamentally wrong. The United States Government has just mortgaged the future of America to reinforce the wealth of the wealthy.

The Bush Administration presented a scenario in which they announced that if the United States Government does not bail out a handful of Corporations, in this case Corporations that are Banks and Insurance Companies that the US economy would collapse into a deep recession.

The first premise that wrong is that the US Economy has been teetering on the razor's edge of a recession since the Bush Administration taxation and redistribution of the wealth upwards began to take affect.

The second premise that is wrong in the Bush Administration's presentation of this crisis, is that a handful of Corporations are the American Economy. The American economy is not a handful of Corporations, the American Economy is comprised of tens of millions of hourly wage workers, it is farmers and teachers, police officers and doctors, it is Professors and lawyers, it is Doctors and Nurses, it is manufacturers, distributors, wholesalers, retailers and consumers. The America Economy is not reliant upon a handful of Corporations that do not produce anything, an handful of Corporations that feed off the edges of the money earned by individuals and companies that actually produce something. The farmer produces food, the distributor brings it to market, the wholesalers break it down and sell it to stores, small and large that services the consumer who will buy and consume the food. The Banks and Insurance Companies that are being bailed out by the current Corporate Welfare Legislation are piranhas that feed off the work and production of the individuals and companies that produce goods and services.

The deregulation that began under the Reagan Administration and that has become the mantra of the self proclaimed "Reaganites" in the Republican Party has allowed these corporate piranhas to live very well off the production of goods and services by the rest of the American Economy. They have been given free reign by the "free marketers" of the deregulating crowd to take a larger and larger percentage of the pie through unregulated interest rates, unregulated mergers, and unregulated fees and service charges. The Banks and Insurance Companies that are being bailed put in this legislation have enjoyed their most prosperous time in American History during the last 6 years. If these Corporations lost money during the time of the greatest prosperity and at a time when they were allowed by deregulation to suck more and more capital out of the real economy, what would be the point of insuring their existence with the largest Government Welfare Check ever.

The third and most important premise that is wrong with the Bush Administration presentation of economic depression is that if indeed the economy was headed for a depression, individuals and companies that produce goods and services should be the priority not the Corporations that create investment derivatives that serve themselves and not the welfare of the Nation. The basic tenet of the Great Experiment called, “The United States of America" is that the Government shall be formed, "by the people, for the people and of the people". This Government was not formed for the corporations, by the corporations and for the corporation.

The answer becomes clear; the American People that have suffered and continue to suffer because of the faulty economic theory that has been implemented since the time of Reagan are the ones who need a bailout not the Corporations that have benefited from these policies.

The Republicans carried on and on about the pittance that was given out in social aid, such as Welfare to insure that human beings have the basic necessity of shelter from the elements, and Food Stamps, so that American Citizens can have the basic necessity of food, and disability insurance, Medicaid, and Medicare, so that the People can have the basic necessity of medical care, are now willing to write out checks from the future production of the people to save a few Multi-Billion Dollar Corporations, Corporations whose property holdings exceed the value of entire towns of working class homes. The Republicans like to say that the Government is not in the business of providing the necessities of life to the Citizens, They like to quote from the Constitution that the Government's role is to provide for the common defense, they like to stop reading before they get to the section about "providing for the common good", and there never is a part that says "provide for the Corporate survival". Yet they are willing to cast the citizen as sunder to cater to the Corporations that provide them with the contributions that they need to protect there status and their seat.

The Democrats with an ideology that is rooted in the programs of FDR, and in the ideals that foster the laws that provided for the minimum wage, over time laws, child labor laws, Social Security, Medicare, Medicaid, Food Stamps, equality ion leading are now also willing to cast the People under the train to save the mighty Corporation. Senator Obama failed to lead. He Failed to see the Change that could have resulted from this situation.

What will giving $2 Trillion Dollars to these investment banks and insurance companies insure and how will it benefit the Average Citizen? We are told by the Bush Administration and echoed by those who bought the lies, that it will free up credit and allow business and individuals to get loans. So this is the premise of the legislation, the United Stats Government is going to take the People's Money, give it to the banks, so that the banks can loan it back to the People at interest rates that exceed 40% on credit cards. Is this the best way we can add a $2 Trillion Dollar stimulus to the Economy, and is it the most productive way that we can stimulate the Economy? This is absolutely not the best way.

If we had a Leader, a Leader that really wanted to lay the foundation of change, the time to do it is now. $2 Trillion Dollars, administered by the Bush Administration appointees with the purpose of propping up a few corporations and tens of thousands of executives and management and workers at these handful of Corporations does not "provide for the common good", but rather for the selected good of a few. A real leader would realize that the foundation of a good economy is in the People, who are the Government. If we are to have the largest redistribution of wealth ion our Nation's History, it should not be Robin Hood in reverse.

The proper and most practical distribution of 2 Trillion Dollars would be to divide that 2 Trillion Dollars amongst the People. If each United States Citizen and every registered Corporation received a check for $10,000 next week, the Economy would flourish. It would begin to correct the flaws in the economic policies of the past two decades and would create a stream that would raise all boats. $10,000 placed in the hands of every citizen would produce Economic activity that would be 6 times that amount, if $6 Trillion Dollars was distributed the economic growth would be 6 times that amount.

Those that are behind on their mortgage and in danger of losing their homes would catch up on back debt, the banks so called "toxic mortgages" would begin to be paid, the banks would gain their sought after liquidity. Those that have excess credit card debt would undoubtedly pay off some of that, again adding liquidity to the banking system. Those that do not have debt would purchase goods and services which would increase demand, which would deplete inventories, which would create jobs. Local stores would benefit from increased purchases allowing them to gain liquidity from stagnant inventories and would purchase new goods to sell and pay off the debt that they have accumulated during this never ending Bush Economic downturn. That would increase the banks liquidity. The economic stimulation of $ 2 Trillion dollars in the hands of the US consumer is immeasurable compared to the stimulation that will occur when 2 Trillion Dollars is given back to a financial industry that has run wild and is out of touch with the value of money. Some people would just save their $10,000, which again will add the much sought after liquidity to the financial industry. If the money is put in the hands of the consumers these financial corporations would have to work to add money to their corporate coffers by gaining the confidence of the investor and by being competitive. Some people would spend money on appliances, cars, car repairs, and essentials, all of which will rescue American Industry from the depths of the current recession that has been raving Main Street businesses, the automotive industry, manufacturing and service industries. This $2 Trillion would become the catalyst that would rescue the People, create jobs, and grow the economy, instead of re-financing an industry that has squandered and discard the prosperity that was theirs for years.

The Legislation that was passed had "sweeteners" added to entice various Congress people to vote for it. All of it was selected "pork" dollars that would help a few and not provide for the common good. Then there was the provision that raised the FDIC insurance on deposit accounts to $250,000 from the current $100,000. Again, a provision for a select few, the majority of Americans do not have to worry about their deposit accounts being under insured because they will never have a deposit account that has $250,000, again a provision for a few and nothing for the common good.

The legislation that should have passed would have distributed $2 Trillion Dollars to the American People and the "sweeteners” that were added should have been an amendment limiting interest rates to 6% above prime: 0% income tax on the first $56,000 of earnings, and a flat rate after the initial exclusion; a flat tax rate on all corporate profits after an initial exclusion of $250,000 for overhead, fees and business expenses.; An Amendment limiting bank fees and service charges. an Amendment to raise the Minimum Wage to a living wage; an Amendment to raise all social aid to a dignified level; an Amendment to provide universal Health Care for every American Citizen. An Amendment to fully fund the modification of all government owned building to be energy self-sufficient through the construction of sustainable renewable energy systems. These are proposals that will provide for the common good, not rewarding Corporations that have failed in the proper execution of their business decisions.

Leadership requires vision. Whichever Party you support, they have all failed the People of The United States with their shortsighted solution to the current financial stagnation. This Nation was founded by men of vision who were nurtured on education and weaned on the Age of Enlightenment. If they were here today, would they agree with a $ 2 Trillion Bailout of a selected few, or would they support the rescue of the People who have built this Nation?

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