Billions for Bailouts! Who Pays?
The current financial crisis facing our country has been caused by the extreme right-wing economic policies pursued by the Bush administration. These policies, which include huge tax breaks for the rich, unfettered free trade and the wholesale deregulation of commerce, have resulted in a massive redistribution of wealth from the middle class to the very wealthy.
The middle class has really been under assault. Since President Bush has been in office, nearly 6 million Americans have slipped into poverty, median family income for working Americans has declined by more than $2,000, more than 7 million Americans have lost their health insurance, over 4 million have lost their pensions, foreclosures are at an all time high, total consumer debt has more than doubled, and we have a national debt of over $9.7 trillion dollars.
While the middle class collapses, the richest people in this country have made out like bandits and have not had it so good since the 1920s. The top 0.1 percent now earn more money than the bottom 50 percent of Americans, and the top 1 percent own more wealth than the bottom 90 percent. The wealthiest 400 people in our country saw their wealth increase by $670 billion while Bush has been president. In the midst of all of this, Bush lowered taxes on the very rich so that they are paying lower income tax rates than teachers, police officers or nurses.
Now, having mismanaged the economy for eight years as well as having lied about our situation by continually insisting, "The fundamentals of our economy are strong," the Bush administration, six weeks before an election, wants the middle class of this country to spend many hundreds of billions on a bailout. The wealthiest people, who have benefited from Bush's policies and are in the best position to pay, are being asked for no sacrifice at all. This is absurd. This is the most extreme example that I can recall of socialism for the rich and free enterprise for the poor.
In my view, we need to go forward in addressing this financial crisis by insisting on four basic principles:
(1) The people who can best afford to pay and the people who have benefited most from Bush's economic policies are the people who should provide the funds for the bailout. It would be immoral to ask the middle class, the people whose standard of living has declined under Bush, to pay for this bailout while the rich, once again, avoid their responsibilities. Further, if the government is going to save companies from bankruptcy, the taxpayers of this country should be rewarded for assuming the risk by sharing in the gains that result from this government bailout.
Specifically, to pay for the bailout, which is estimated to cost up to $1 trillion, the government should:
a) Impose a five-year, 10 percent surtax on income over $1 million a year for couples and over $500,000 for single taxpayers. That would raise more than $300 billion in revenue;
b) Ensure that assets purchased from banks are realistically discounted so companies are not rewarded for their risky behavior and taxpayers can recover the amount they paid for them; and
c) Require that taxpayers receive equity stakes in the bailed-out companies so that the assumption of risk is rewarded when companies' stock goes up.
(2) There must be a major economic recovery package which puts Americans to work at decent wages. Among many other areas, we can create millions of jobs rebuilding our crumbling infrastructure and moving our country from fossil fuels to energy efficiency and sustainable energy. Further, we must protect working families from the difficult times they are experiencing. We must ensure that every child has health insurance and that every American has access to quality health and dental care, that families can send their children to college, that seniors are not allowed to go without heat in the winter, and that no American goes to bed hungry.
(3) Legislation must be passed which undoes the damage caused by excessive de-regulation. That means reinstalling the regulatory firewalls that were ripped down in 1999. That means re-regulating the energy markets so that we never again see the rampant speculation in oil that helped drive up prices. That means regulating or abolishing various financial instruments that have created the enormous shadow banking system that is at the heart of the collapse of AIG and the financial services meltdown.
(4) We must end the danger posed by companies that are "too big too fail," that is, companies whose failure would cause systemic harm to the U.S. economy. If a company is too big to fail, it is too big to exist. We need to determine which companies fall in this category and then break them up. Right now, for example, the Bank of America, the nation's largest depository institution, has absorbed Countrywide, the nation's largest mortgage lender, and Merrill Lynch, the nation's largest brokerage house. We should not be trying to solve the current financial crisis by creating even larger, more powerful institutions. Their failure could cause even more harm to the entire economy.
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Thank you so much Mr. Sanders, for articulating this. Have we all lost our collective MINDS, or what? It is absolutely OUTRAGEOUS that the "rest of us" should be bailing out the "Fortune 500". Shouldn't it be the other way around?
Lord help us if we can't see this clearly and stand up for ourselves.
It's ABSURD. Beyond absurd, actually.
I totally agree ,As Mr. Sanders said ' socialism for the rich,and free enterprise for the poor.' This is very loop sided, and is not socialism. This is something knew too me.
Thanks for this insightful article. I am absolutely aghast at the prospect of this bailout. This is nothing but a huge tax burden on our country. It just makes my blood boil that universal health care is denied to the American citizens, and yet, there seems to be no problem bailing out Wall Street and financing a ridiculous war. I recall Bush's comment at a White House dinner where he welcomed the 'haves and the have mores." Are we heading in the direction of a United States run by a handful of wealthy? Wake up America! We actually have a form of socialism, but unlike Finland and Norway, it's not trickling down. It is concentrated in that wealthy 1%.
Bush and Co. aren't done yet.
Text of Draft Proposal for Bailout Plan
I ran across this unintentionally. It's stunning. The Bush administration is asking Congress for unlimited authority to raise and spend $700,000,000,000 with no reporting for three months, no oversight by anyone, and not subject to any judicial review. This is such a blatant power grab it takes my breath away.
This sort of blank check is how we got the Iraq war. Congress must change this draft document radically and not be bullied by the administration's fear tactics.
http://www
I don't care if my words get posted but the text of this document needs to get out there.
Sure, there's oversight--the Fed is policing itself. What a joke.
Well first off "You ran across this unintentionally" In the NYT's ? LOL
Ok the NYT they are a legitimate newspaper LOL
Obama and the Dems seems to agree that they love the new Bill.
Maybe you should read this: http://www
McCain freaked out and started shouting about firing the head of the SEC and forming a commission
Veeerrrrry rational.
Bernie, if there is a God, I think it's you.
If they pass this bailout, I'm moving to Vermont!
If these insolvent institutions are left to fail, we can then begin to salvage what is left of them through bankruptcy proceedings, and go about rebuilding our economy from the ground up. It will also save our nation from avoidable bankruptcy.
Being governed by a conspiracy against our common good has become a bad habit. The secret Federal Reserve delivers our public policy without due process or public right to petition their governance .They have been conducting financial operations without restraint of civil liberty with no oversight by the United States Congress. The U.S. government by itself creates no money whatsoever. Yet, despite a Constitutional provision that all appropriations are to begin in the House of Representatives and in an attempt to save the parasitic financial system ahead of the welfare of the nation and its people, the Federal Reserve Banks continues handing out huge amounts of tax payer money.
The financial system we have known is dead. It died in July of 2007, along with the fraudulent aspirations of a political ownership society gone very bad. Bailing out bankrupt institutions by bankrupting the United States is un-acceptable. Although since we have no voice through our compliant representatives in Congress to stop this looting of U.S. citizens by actions taken by the Federal Reserve Bank that are completely outside the bounds of the United States Constitution, we now must prepare for a hyperinflationary explosion reminiscent of Weimar Germany. Since there isn't enough money in the world to make this scheme work, the very value of the United States dollar will vaporize.
Actually, it died in 1913 when Wilson signed the Federal Reserve Bank Act.
I agree with almost everything you state but we must also recognize that Democrats under Clinton also subscribed to the deregulation that was continued under Bush. Also, the same people who are responsible for this mess are the same people both candidates are going to for advise on how to fix it. Unless they both go to other sources we are going to see more of the same until it all comes down on top of us.
Also Bernie, research Credit Default Swaps, they are going to bring down the whole U.S. economy...
"...social
Is what we in the US call capitalism. The current boondoggle is just one more in a long list of examples of the result of comes from following the failed and self-serving economic policies of the elites. Call them "supply-side", trickle-down", "free-trade", "globalization", call them what you will, all they boil down to is more for the few that already had most of everything and less for the rest of us. And these policies didn't start under Bush, both parties have supported them for at least 3 decades. Which is why the reforms you call for are highly unlikely to happen. But the economic impact of the Bush administrations mismanagement, while catostophic in itself, is far from the worst of their outrages. More urgent IMHO than even those reforms is returning the nation to rule under the Constitution. There may no longer be time to impeach Bush before he leaves office but no economic reforms will save us unless some legal accountability is imposed on the criminal Bush administration for their crimes of torture, illegal spying on US citizens, and war under false pretenses to name just the most obvious. This should be the first order of business of any Obama administration should we get that lucky and the new Congress even if we don't. Not that I expect it to happen either.
There was no oversight due to lobbyist influence on both sides.
Do you think it is time to address this corruption?
Can AIG be used for socialized health care insurance?
Would it be better to socialize health care instead of corporations?
This opens up a big can of worms and should be debated for more than a week.
The biggest finger HAS to be pointed at the republicants - 75 to 25.
Apparently, there's still one sane person left in the U.S. government.
My recommendation is to start by breaking up the media conglomerates, which are responsible for the public being uninformed and misinformed about the state of affairs you, Bernie, so simply reduced to a couple of paragraphs.
Thanks to their "economizing," they eliminated their investigative journalists, as well as local news and information. So forget about any corporate misdeeds, there's no one left to report on them until kids have eaten the lead or a company has already gotten away with the crime.
Thanks to these conglomerates being big enough to also have companies with military contracts, they had no interest in reporting on the war or representing the full range of opinions. Because it would go against their own profit motive.
Thanks to their lack of competition, they have had unprecedented control over which messages get seen and which don't (just look at Sinclair's censoring of Nightline, or Disney dropping "Fahrenheit 911").
And most importantly, thanks to their unaccountability to using OUR, the publicly owned, airwaves for the public interest. They've created content purely to drive private profit, using one of our most precious public resources.
The media deregulation, more than any one factor, has led us down this path. Because an uninformed public is a public that can easily have the wool pulled over its eyes.
Sanders seems sane because he is an independent. I'm surprised the Democratic Party hasn't tried to oust him by backing a strong candidate against him like they have everyone else who has risen up on the left.
The government, by socializing the financial industry, has just hired the very people responsible for this disaster. We know longer live in The United States of America. We live in The Corporate State of America.
Unelected financial weapons of mass destruction will now be employed by our government. One plank in place. Access to use your earning deposited in their (what you think is your) bank account to spend on their mistakes. $1 trillion dollars is what the government tells you. This will cost far more than what your political and financial leaders would ever admit.
To further drive home the point, Paulson tells the story of "hundreds of billions" of dollars to pay for this corporate welfare program. The news is now reporting $1 trillion. Where is your $1 trillion dollar bailout?
Ask. but you will not receive. You will only be deceived.
Senator Sanders is right on the money on this issue. notice how Bush wants to bully the baIL-OUT BILLS THRU CONGRESS WITH NO DEBATE, WITH NO PUBLIC awareness or time to comment on something that is so important to us. don't you all wish we had a president wit such attention and determination to health care, education, social security? there is no reason why WE can't make this countries government function the best for all us and not just the corporate elite.
seems the wealthest should learn that they should of made sure that the middleclass & the poor was given a half a chance and invested in America and kept our jobs here and had real fair trade ,we all would be better off ,we need to regulate wall street ! USA first!!!!!!
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