Saturday, September 27, 2008

Economics 101

If this goes as a straight bailout it means the Government takes assets i.e. the toxic mortgages at what 23 to 50 cents on the dollar and then holds them until the market rises to a level where they can sell them again for what 50 cents to a dollar on the dollar. This in effect manipulates at least the housing market by keeping prices on housing high. So why should the government benefit from this, in effect we know some of these houses are going to probably go to *government cronies* at reduced prices, much like the Dawes Commission and their political cronies took Indian land from individual Indians. The public will never know about this.

An insurance plan, way better than a bailout, although not perfect, paid for by the Wall Streeters and Bankers who started this whole mess, even if pressured by Congress to make these bad loans, should have just said no, but at least they will pay for it and Congress equally as guilty of this whole mess will not be the only one to benefit.

You think the taxpayers are going to benefit. Think again! Any return on a bailout will come into Congress, never to be seen or heard from again.

Basic economics says: more out go than income means trouble down the line - Wall Street and Congress need to know that the tax payers are not an endless source of revenue!