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

[Martee]

Excellent article! I'm sure they'll want you on all the talk shows . . . oh, wait a minute. No one wants to hear what's really going on. What does Lindsey Lohan think about the financial crisis???

[naschkatze]

Yes, Senator Sanders, the victims of the past 8 years' economy have been the people, or as we have to soft pedal it in the US, the middle class. Now, a bailout has been proposed to save the very people who have profited from the Republican economy with the lie that if our financial institutions fail, we will "all" suffer the effects. This bailout will be achieved by taxing the original victims even more to benefit the original profiteers once again. A WaPo op-ed yesterday repeatedly placed the blame for the crisis on the "American household", even egregiously suggesting that one of the ways the middle class has benefited from the Bush regime was being able to send more of its children to college!

[blueshield]

Senator, if you are taking pulse over here, consider this a pounding, full blooded endorsement.

The complete and utter failure of the 30 years experiment with Reaganomics should be nailed to a coffin and put on public display. I don't mean that rhetorically. Ok, the coffin part is hyperbole. But there has never been a more critical need for a historic review and education about what has happened, and it's source in a political agenda. Some of our candidates need a big brush up on economic policies they're still espousing.

And more dangerously, someone in Washington had better show the rest of the gawking, disbelieving world that the United States has some fundamental competence, or the US dollar will no longer be the world's reserve currency. That is a very real risk, if money managers and governments conclude their confidence in American fiscal leadership is misplaced.

Finally, GET ON THIS IMMEDIATELY! This is URGENT business. The political window will close with the pending recess, and the public's focus will dissipate. Please, continue to stand to protect our country.

[LanceBresee]

...and the former CEO of Fannie Mae, who reported 16 billion income loss and admitted that the institution had no idea where 90 billion in assets was, is now the economic adviser for one of the candidates for president!
Can you believe that?

[paixa3]

This is just the neocon, arrogant, stupid way.

[jhNY]

A rethuglican dirty trickster crawls out to confuse us. The advisers to McSame have among their merry robber band at least two lobbyists for Mae and Mac, and I can assure you those little devils weren't lobbying for more oversight or fiscal responsibility of any kind. The guy who the rethuglican's latest lying ad features has no, as in none, and not ever any connection to the Obama campaign. Give it a rest, you brazen liar!

[WillTell]

For all the TALK of capitalism's free this and free that, America has had socialism, socilaism for the rich that is, almost since its inception. Congress has had social medicare for years, but not its constituents. The thought of the wealthy not having their taxes increase dramatically to pay for this and the cost of the war is ludicrous. How about a 20 cent tax on every trade made on the stock market? A return to reality is also in order in the form and amount of compensation paid to CEO's. No more free or options on shares. A maximum salary of $500,000 would be a good start, with a small percentage bonus or deduction based on the companies results.
If these guys don't like it, to bad, what are they going to do, go drive a truck?
America's wealthy live in luxury, in the best country in the world, but don't feel any obligation to pay thier fair share. Some think wearing a flag pin and sporting a troop sticker is all that's required to make them patriots. Its so easy to say, "I love my Country".
God Bless America, because it's not going to get anything from its priviledged class. It's sad. The Americans are the some of the most generous people in the world when it comes to other nations, yet give only lip service to their own.

[renatam]

http://www.conspiracyarchive.com/Blog/?p=366

The early indices of Roman decline were not military but economic. In particular, as Rome"s moneyed elites succeeded in monopolizing wealth and credit, the Roman middle class was gradually squeezed out of existence. Rome"s merchants and independent farmers were turned into landless serfs on the latifundia, the vast land monopolies that Rome"s oligarchy accumulated. Personal debt soared, prompting Rome"s poor to sell themselves into slavery to escape their obligations. Higher taxes and the debasement of the currency followed, leading to inflation " all of this long before the first Goths and Vandals laid low the Western Empire.

While Zakaria rightfully points to American technological progress and innovative vitality as reasons for hope, he brushes aside America"s financial decline and gradual descent into economic oligarchy. Huge numbers of Americans are bankrupt or nearly so, and levels of personal savings have fallen to unexampled lows. More ominously, the American government is in debt to the tune of tens of trillions of dollars (including "off-budget" obligations like Social Security and Medicare).

[tjhannink]

1. A surtax on people making over $500,000 per year? That would include the special interests and lobbyists that currently control our elected officials as well as most of the officials themselves. Keep dreaming.

2. The economic stimulis package is a great idea as long as we don't borrow money to make it happen. Balance the budget. don't allow "emergency spending measures".

3. Don't bail out the administrations fiscal policies. Let the free market correct itself - this is their mantra - make them live with it. Market calls. gentlemen.

[clevelandchick]

Your second point is not taking into account the fact that if you employ people to work on repairing our infrastructure and developing green technology they are paying taxes and generating revenue for the government. They are also stimulating the economy...­.buying consumer goods, big ticket items like cars and home, taking vacations, going to the movies...

If we could re-employ even half of the 6 million that have entered poverty since Bush took office and the 650,000 that have lost their jobs over this year that's almost 4 million people are not taking government assistance in the form of welfare or unemployment benefits. That frees up a heck of a lot of tax revenue.

An economic stimulus package that puts Americans back to work is the best investment we could make. We get a great return on that money. What return will the middle-class get for the 800 billion it's going to cost us to bail out these rich greedy scumbags?

Bailing out Wall Street doesn't do jack for the middle class but they're the ones who have to pay for it.

[bugdog]

Good ideas, It'll never happen. Time for the next American Revolution.

[mayfly0]

Yeah sounds kike the peasants are revolting. And proud of it.

[berkeleygirl1962]

"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."

Yours may be the last voice of moral clarity in Washington,

[mounthood]

Thanks Bernie. Glad to be a Vermonter with you as our Senator.

The current economic slogan seems to be: Privatize the profits and nationalize the losses.

Corporate greed prevails, alas and alack.

J. Schrock
Stowe, VT

[brutus948]

you aint seen nothing yet. Wait the palin/mccain are in the white house. The real reform begins then :-)

[peterg76]

Attaching some weak, probably unenforceable conditions on an immoral gift is not going to be enough. Has anyone even considered that opposing the bail-out might be a good idea?

[lechatnoir]

All the huffing and puffing and angry posturing is meaningless unless those responsible for this mess are held accountable. They must be stripped of their lavish lifestyles and made to pay for it however they can, like anyone else. When you can't pay your credit cards, they come to your house and take the TV away. Short of that, I don't see how the hoi polloi can be persuaded to honor their debts.

The GOP and it's Wall Street chums made the big mess on the carpet. Now 'fess up and cough up.

[MNinWI]

Absolutely-I was just reading in my home town on-line paper that a woman has taken $5000 from the business she was working for & could see 5 years in prison for it. That's the kind of justice we see in the US anymore. The truly greedy predators get away with it and someone trying to just get by (wrong that it is) sees prison time. Bizzaro world.

[BuckeyeGal]

Yeah, they put their pants on one leg at a time like everyone else, don't they?

[sbvpav]

guess we now know what the good ol' lying gop means about "wealth redistribution" and the "business of america is business."

[LadyXoc]

WOW
Why aren't you runnning for the presidency?
Beyond this, why are we buying that failures of Merrill, AIG, etc., would bring down the economy? Seems like a pension plan for the Bushies to me, franklly.

[NWNHNM]

This is perfect. Please introduce legislation immediately to accomplish this agenda. I would only add that there should be no tax deductions of any kind for anyone with gross income of greater than $500,000 in order to insure that these people actually have to pay taxes including the surcharge. In addition, there should be a surtax applied to people who worked in the financial institutions which were rescued. Anyone who had worked there at above a certain pay grade/ power level in the last 2 years (since the mortgage meltdown began), should have a 50% surtax.

If these people have to file for bankruptcy to pay their taxes, so be it. They are no worse off than millions of middle class and poor Americans who until now have been bailing them out since the Bush tax cuts of 2001/2003.

[sricabla]

As usual....w­ealth is privatized and debt is socialized. We should have an even higher tax penalty for those people that were involved in this whole economic mess we're into.