We Don't Need to do THIS Bailout. Think Plan B!

[Truth2Tell]

I really do not believe we need to bail out Goldman Sachs and Citigroup in order to protect the American taxpayer from the fallout of the current financial crises.

This does not mean I don't understand the implications of a full-scale credit lock-up. I do. I fully understand how ugly this is, and I understand that something needs to be done. But I also understand that credit collapses happen like domino lines, and the only place to stop the falling is not necessarily at the first domino.

Very few regular Americans do any sort of direct business with the institutions that got us into this mess. We can allow them to fail and the immediate impact will be on only their shareholders and employees. The second impact will be on their creditors... the second domino. Many of these are not main street institutions either.. hedge funds, private equity firms etc. These are the people who operate in the realm of G3 money... beyond even the electronic deposits Joe six-pack maintains in his money market or savings bank. These institutions should be allowed to fail as well. The first few dominos should be allowed to fall.

We should save our 700 Billion to inject a few dominos down the line, when the contagion actually begins to hit the pension funds, savings and loans, local government investment funds, etc. Bail THEM out. Let the G3 market fail. It is estimated that the derivatives bubble is upwards of 25 Trillion. We are not going to save these people whatever we do. Let nature take its course. Save the 700B to put a firewall in the right place - circle our resource wagons around the American workers.

One downside of this idea is that many of the large foreign Treasury buyers will get clobbered. But I really don't think we are going to stop that, and I think Paulson et al knows that full well. The Dollar is in for a nosedive whatever we do, that horse left the barn some time ago. Maybe there is some way to appease the Chinese and Japanese etc, but I doubt it. They are stuck in this mess with us and would do well to think about their own internal firewalls.

Let the big players that got us into this mess collapse as Act I of this tragedy. Step in and implement Plan B as Act II. Build the dam further downstream where it will protect the people who deserve to be protected. Let the upstream high-flyers drown in their own shitwater.

No bailout of the top tier. No to the Bush plan. No to the Frank/Dodd plan. No no no to this bi-partisan rape. No.

[tama]

1. You are proposing a revolution

well done!

[Truth2Tell]

3. The revolution has proposed itself.

I'm just pointing at it. :)

[tama]

7. You know,

you will loose youre pension funds, but that is a small price to pay - and the revolution as suggested is of course only the beginning. Liberty or death!

[Truth2Tell]

8. If done properly, I don't think pension funds even need be lost. nt

[tama]

13. Properly

would mean socializing them?

Anyways, it would seem that the Fed is allready broken, accepting trillions of junk as collateral of the Mighty Dollar, meaning that governement bonds are allready worthless, nothing but thin air - if anyone serious enough would want to cash them. And no, the rest of the world will not support this house of cards indefinately by injecting more and more cash into US credibility.

[Truth2Tell]

14. Basically socializing them, yes. At the very least fully

insuring them. And with money from actual deserving taxpayers (like multinational US companies), not from the freakin' Federal Reserve.

[chknltl]

2. MnR

Thanks for this OP. I am way over my education level on this topic but I have seen nothing in either your plan, the Bernie Sanders Plan nor the upcomming Kucinich plan which gives a bailout to the very folks who are demanding it. In my eyes, the bush administration has squandered waaaaaay too much of our money as it is. Now he is trying to scare us into giving him even more? You said it best:
"No bailout of the top tier. No to the Bush plan. No to the Frank/Dodd plan. No no no to this bi-partisan rape. No."

[puerco-bellies]

4. I completely agree.

Guarantee day to day liquidity so normal commerce can still take place. Freeze all forecloses, and save those that can be renegotiated. Let our government hold the mortgages until the markets stabilize. Protect banks, saving and loans at the branch levels. Because of modern electronic communications I don't think that massive bank failures are a foregone conclusion, we can break up the weak ones and make local branches community held/owned.

Fuck the derivatives markets. The upside is that we can wipe a huge part of our foreign dept, in the form of treasury bonds, out overnight. It would mean that for the first time in our history we will have defaulted on a bond but fuck it. We need to save ourselves.

[Truth2Tell]

6. There are plenty of ways one could think of

to prevent local commercial and consumer bank failures with 700 Billion.

[lligrd]

5. Exactly, Let The Ones That Benefited Bail Themselves Out

They can afford it, we can not. They are simply trying to blackmail us which is exactly why they wanted everyone to have their retirement funds placed in the Stock Market that they control. Yes, a failure would hurt us but it is also the only thing that will stop them from taking everything in which case we lose everything anyway. At least, this way many of them will be hurt too. It is either us alone going bankrupt slowly or we all go down now (and hopefully Obama will be another FDR and fix the system). It is our only chance.

[Truth2Tell]

30. I agree, Obama as next the FDR is our only hope

FDR ran as a centrist too, so it's not inconceivable.

[ClayZ]

9. It is getting ugly out there!

Someone swallowed our mortgage bank today. WaMu RIP.

Does that mean I do not have to pay the house payment? (kidding)


K and R

[McCamy Taylor]

10. The large foreign investors made bad investments, too. They will learn not to trust Bush-Cheney.

Japan and China should consider that the Republican Party is not so good for their business interests after all. Especially China, which thinks that just because Bush looked the other way on Tibet and human rights abuse that made him somehow better for their economy. It didn't. It just made him an asshole.

Since the U.S. consumer is so important to the Asian economy, Japan and China had better pray to Buddha that the U.S. consumer regains his confidence or they will be circling the toilet bowl with us.

[Truth2Tell]

12. I think China made thier deal with the capitalist devil

under the reign of Poppy Bush (pre-presidential Poppy even).

I don't think they expected Pops to hand over the keys to an idiot son or his neocon puppet masters.

But yes, they should've known better even then.

[TooRaLoo]

11. Rec'd.

[Norrin Radd]

15. kr

[Truth2Tell]

16. Kick. nt

[earth mom]

17. K & R. But I have to say that I'm starting to feel like the dems are gonna sell us all

down the river like they did with the bankruptcy bill and impeachment etc.

We are SO screwed.

:(

[redqueen]

18. IMO this is as pointless as saying we need better candidates than the Dems or Republicans offer.

Yes, we do... but we have to work with what we have... not wish upon a star.

This bill will happen... we need to push for the best bill, not wish they wouldn't do it.

[Truth2Tell]

21. I am free to wish they wouldn't do it if I please.

And we don't NEED to push for the best rape. If we can't stop it, then we need to call out and punish the rapists from both parties.

This is no longer quibbling about little things. This is massive massive corruption. I do not give the Democratic leadership the benefit of any doubt. They are treasonous criminals just like the Republicans. Fuck them all.

[redqueen]

22. How will you punish them?

I'm curious to know.

[Truth2Tell]

23. All I can do is try.

I hope others will as well, and working together we may have an effect.

One way is to mount and support primary challenges to Democrats who vote in favor of this plan. I intend to be a part of such a campaign here in my own CD in the next election cycle.

[redqueen]

24. That's nearly every Dem in the Senate. You can support Bayh wholeheartedly though. (nt)

[Truth2Tell]

25. Just shows you how utterly owned even our own Party is. nt

[redqueen]

27. But how un-owned Republicans are?

IMO it shows that we added a bunch of good things to this bill, and made it worthy of being passed.

[Truth2Tell]

29. "At least they're not as bad as Reupublicans"

is starting to get to be a pretty tired argument.

[Uncle Joe]

19. On the face of it, this seems like a logical proposal.

Kicked and recommended.

Thanks for the thread, Truth2Tell.

[kentuck]

20. I tend to agree with your synopsis...

The world is not going to end for most Americans. However, for some of the top-tier players, their world will end - as they have known it. That is not necessarily a bad thing. We should also understand that many people, including Paulson, have vested interests in this bailout.

[Karenina]

26. Also including Warren Buffet.

[glitch]

28. Sounds quite reasonable but this proposal would take guts from our fearless leaders.

K & R anyway :)