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.

Comments

[Yorick]

I completely agree, and thank you for posting this. But what are the chances that any of what you propose will happen under this administration? What can we do to make any of this happen and make sure Americans realize how outraged they should be by all of this?

[Osprey3]

You left out an important demand, Senator. If the Public is to assume all of the bad paper that was created by greedy, corrupt financial corporate moguls, WE WANT SOME SCALPS! These folks should not be allowed to walk away from their transgressions with golden parachutes. Rather, they should be held financially and criminally libel. Please insert that into any Public bailout plan!

[mayfly0]

Please, at least no goldon parachutes, take these from the companies and put them in with our money.

[SimJack]

Some interesting points Senator, not unlike what Germany imposed during it's reunification. My uncle, who owned a successful clothing manufacturing business, was required to pay an additional 10% in taxes 10% of his employees had to be former East Germans which he had to train up to western work standards. As a wealthy business owner he, of course, hated having to do this but, in the long run it was good for reunified Germany, the former East German workers and the economy as a whole. Nations sometimes must ask much of their citizens and those that have more should do more,especiallyif they benefitted the most under certain domestic economic policies. What's happened to the American sense of fairness? The more you make, the more you pay. Is this such a bad problem to have?

[nohobear]

You are absolutely correct Senator. Please use all your influence to get on television, and with like minded colleagues, get this message out to the American people.

This country is being destroyed from within by corporate fascists. The day is soon coming when we will wake up in a third world, answerable to our rich overlords. The middle class will be non-existent, as will our democracy.

[mayfly0]

Thanks for saying facists, so I didnot have too be the first.

[PennP]

"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."

Why not start with Wal-Mart, which represents a dangerous concentration of employment power in this country.

The government has to stop making good on the bad debts of scoundrels. If less than a third of this bailout is funded by a tax on the rich (good luck on passing it), where is the lion's share going to come from? On top of paying for the war, servicing the national debt, and underwriting the bulk of the bailouts, and coping with the results of the deregulatory follies of the Clinton and Bush administrations, where are we getting the money for the goodies like health insurance, jobs, college educations, an end to hunger, heat for the elderly during the winter, etc.? The country is facing the mother of all margin calls, and the government is still taking on more risk--at the benefit of the ruling class and, of course, at our expense. This is madness. If we're going to pay to save a business, that business should either be nationalized or run under receivership for the next decade, until it can be restored to health and value, sold, and its debt repaid to the Treasury.

I'm ready to find the edge of the grid and fall off.

[MNinWI]

walmart is trying very hard to establish it's own bank but so far efforts have not paid off.
You can do something--go to http://blog.wakeupwalmart.com/ufcw/2008/02/stop_the_walmar.html and protest the walmart bank.

[ducksawce]

Walmary has also established one of the largest drug distribution systems in the world and is now moving into helath care - with clinics and doctors.

Along with banking, Walmart will establish Walmart mutual funds and Walmart insurance.

Can't wait

[SummerNite]

Barack Obama on Wall Street:

September 17, 2007
http://ca.youtube.com/watch?v=b6PPZMpc-e0

It appears that his foresight is at work again.

[Thermodynamics]

Thank you, Senator Sanders

We need some sort of moratorium.

The Bush schemers who caused this mess are trying to panic the public into giving them another $1 trillion. This is 911 and the Iraq war all over again. The team that changed the rules to make themselves winners is going to referee the next game? I hope not.

There is a simple and much cheaper temporary fix. For a mere $12 billion every month (my rough calculation) the federal government could simply pay all the mortgages in question. There are also other ways to establish a moratorium and give us time to work things out. .

[mayfly0]

Where do you get your figures? It has probably now bounced past the subprime market, and is probably affecting people who were responsible, but were unfortunate too buy when the prices were inflated by the subprime market. After all house prices are not suppose too fall that significantly. Then there are those that took out home equatity loans under these conditons too. Though I did not. where does it end if they have too move or lose their jobs.

[juliette23]

This totally stinks to living high on the hog heaven. We were told we couldn't afford universal health care yet we can let the Treasury Secretary save his former company Goldman Sachs and assorted peers for a measly 700 million, I mean, billion dollars. What kind of stewards are these? What has a career in public service truly come to mean? I knew capitalism is all about stepping on the little guy but come on!

[naschkatze]

Excellent point on universal health care, juliette23.

[birdie2]

Bernie,

Put your proposal before Congress any of our representatives that would not sign on to this are obviously not representing the people who voted them into office and should be removed.

[jhNY]

As Sidney Zion used to write in his column at the NY Daily News, the real political structure in the country is both parties against the people. Since both parties supplicated the same masters of finance for campaign contributions, both are now predictably rushing to prove their fealty to the donor class, who so far, were the only ones actually in terrible trouble. And so now their debts will be paid for by the people for several generations, and periodically either the republican coocoo bird or the democrat coocoo bird will pop out of the clock like clockwork to chirp about fiscal responsibility with a sad expression on his little bird face and then go on to explain that's why poor children have no healthcare and catfood is good for you. Both parties have disgraced themselves, but we'll never know it from watching the corporatist press corpse explain it all back to us on TV.

Mr. Sanders, I only wish there were more of you to go around. Your intelligence and insight are unfortunately one of a kind, and therefore, precious. Thank you for your service to the nation.

[coloradodreaming]

Don't go blaming the mess on Americans who purchased homes on the bet that they would both keep their jobs and be able to afford that home. That is the way we purchased our first home in the 60's and the mortgage was PITI $206. We kept thinking then what if one of us would die or lose their job. We were scared but confident that we would have a home for the kids, be able to keep them in a local school through out their educational needs. Our dream came true. In this day and age people had the same hopes and dreams and gambled like the rest of my generation. They faced incredible odds against greedy lenders, massive layoffs, horrible health care expenses, inflation, loss of pensions and a government going to a made up war for oil. What the hell did the money people think? Did they really care that they were signing you up for failure? They made money while the going was good and they are surviving now because we are picking up the tab. Obama/Biden 2008

[gotalife]

Looks like they are using the China model of socialism.

Ask them if we surrendered to Chinese socialism?

[foothillsgal]

Thank you!! Can we get this message out to the mainstream media--TV, newspapers, etc. This is not just socialism, it is approaching fascism. and we Americans need to be really angry!!! How dare they!!

Senator, are you going to be appearing in any MSM venues? How about on The View, or Oprah, or could you put out a TV ad? I would donate money to help pay for it! Would others? Could a video be made that could go viral?

[clevelandchick]

Bernie,

I hope you are talking with my Senator, Sherrod Brown. I heard you discuss these points on Thom Hartman Friday and I was cheering loudly in my car. You must get a group of your colleagues in the Senate to hold a press conference and hammer every one of these points home. The Democrats must come out on the side of the people on this one instead of letting the Republicans scare them into another tax payer financed bailout.

[monkette]

Exactly!!

Great words Senator, and I applaud you. However, I hope you throw all your energy into convincing the people who can actually do something about this -- your cohorts in Congress -- to actually do something right for a change.

There is so much that Congress has been letting slip by for so long. Just cut it out and start acting in the best interests of the average American for a change. That's directed at Congress collectively, not you individually, Senator.

But I'm fed up with the shenanigans on the hill.

[neroden]

Senator Sanders, you're right as usual, but you don't go far enough.

Increase taxes on people with incomes of over $500,000/yr single / $1,000,000/yr married by 10% ....
then increase taxes on people with incomes over $5,000,000/yr single or $10,000,000/yr married by another 10%. Add these two new top brackets to *corporate* taxes as well. Make it *permanent*. Use the extra proceeds to increase the standard deduction by a large amount, to $20,000 or $50,000.

Why go for half-measures? The top tax rate under Eisenhower was 92%; the top rate under Kennedy was 70%. Even the rates I just suggested are less than both those rates! It's time we got back to a sane tax system, the sort of tax system which got us through WWII and the Cold War.