Spotlight on the House: Time for Termite Treatment

$800 billion dollars later, the federal government has regained a little control over our financial markets. We own some banks and are about to invest a few hundred billion buying the troubled assets of others. Warren Buffett says we might even make some money off the deal.

But do we have any clue how this stuff works?

A recent edition of the New York Times contained more eye-opening revelations about Wall Street that are catching the Main Streets of America by surprise. (Did you know people are betting on your local government to go bankrupt? And they're winning.) I can assure you that my colleagues in Washington have been a bit slack-jawed in recent weeks as they've gotten a crash tutorial in derivatives, credit-default swaps, collateralized debt obligations, commercial paper, options, puts and calls. All members of Congress know about LIHEAP, the heating bill assistance program for our low-income constituents. But few have heard of LIBOR, the interbank lending rate that ultimately determines if our constituents can get a car or find a job.

It's a travesty that it took a worldwide financial meltdown to get Congress' attention. But at least today, as our phones ring off the hook with calls from justifiably angry constituents, we're awake. And on Monday, when Chairman Henry Waxman convenes the House Oversight and Government Reform Committee to pick through Lehman Brothers' wreckage, I hope we're paying attention. I hope reporters are paying attention, and I hope the American people are paying attention.

In fact, I hope they watch us like hawks to make sure we follow through on our commitment to figure out how the financial services industry grew four times larger than the American economy, and how it stepped out from under Congressional oversight and regulation.

Our nation is heading into a period of real economic hardship. Let's use that time to strengthen and modernize our safety net so we can take care of people being left behind in the new economy. That means job retraining and real education reform that equips our students to compete globally. As banks deleverage, American families must too. We should all quit depending on credit cards and start living within our means. And for our part, Congress can make sure all financial products come with full disclosure and strong consumer protections.

This is only the beginning of a major effort. Government must regain control of taxpayer finances. We have nearly $55 trillion in future liabilities on the government's balance sheet, largely due to unfunded promises for Social Security, Medicare, Medicaid and other entitlement programs. We haven't begun to think about how we'll pay for them. This is your retirement and your health care, and our government is not prepared to honor its promises to pay for them with your tax dollars. Instead, we've been spending your tax dollars on tax breaks for wooden-arrow-makers and oil companies.

In fact, for the past eight years America has been digging our hole deeper with more deficit spending. (George W. Bush, you'll recall, has borrowed more money from foreign nations than his 42 predecessors--combined.) America can't afford to let these problems fester, and after this week, Congress can no longer feign ignorance. We went into the basement to bail out the economy, and guess what we discovered? There are termites in the woodwork.

On Nov. 5--Barack Obama's first day as president-elect--I hope he'll put on his exterminator gear and begin a thorough inspection of our fiscal house, because it's been rotted by termites. The last owners only had the place for eight years, but they did a "heck of a job" weakening government from the inside out. I've got a plan to get control of our long-term finances, but I don't care whose plan we use, as long as we get started soon. Only a solvent government will be able to rebuild our economy and meet the many challenges of the 21st century.

Comments

[TXfemmom]

The only thing we can do is to buckle down and try to do something with this. If the Dems take the White House and Congress, then the bill which was passed needs to be amended, and things changed. All the earmarks which had to be added should be canceled. Then, the tax cuts for the rich need to be knifed.

Then, the Medicare Pharmaceutical bill needs to be redone and the government given the ability to NEGOTIATE AND MORE OR LESS DICTATE WHAT WE WILL PAY FOR THE MEDS. That could save BILLIONS AND BILLIONS. We are the only industrialized country in the world that doesn't do this.

Then, health care has to be reigned in. We could cut overall expenditures by 40% and cover everyone by making every employer and every employee pay 3% of payroll to the government, use the same form, put real, significant fraud guards into place, encourage quality standards, cut down on unnecessary proliferation of technology, as we don't need an MRI on every corner, pay less for the high tech and pay the primary care more, and go to one form, one plan, and monitor outcomes.

That would go a long way toward making us competitive in the world, much healthier, and we could address many of the problems in the economy.

[Pdubya]

You Sir, have a lot of gall. You voted for this bill. You opted not to have a market correction on your watch: a deep painful recession, but relatively short. But opted for a bailout, which will guarantee hyperinflation and a greater depression. THANKS for not knowing a damn thing about our Constitution, sound money or about the real culprit - The Federal Reserve - a PRIVATE entity.

If we need regulation it is to regulate the Fed, the Presidential Working Group, and the currency trust.

Is there any left? No, we're bankcrupt. There are only two solutions: a return to sound money/constitution and Austrian free market economics or the Amero and the New World Order.

Guess which camp I"m in?

[CatoTheCensor]

We live in interesting times, in the Confucian sense.

Greed got the best of us. It got the best of a lot of us, from those of us who broke Wall Street to those of us who tried to live beyond our means, Emma Bovary style, to those of us who voted for and supported Bush's insane tax cuts. Those of us willing to countenance a vote for McCain, who wants to make those tax cuts permanent, deserve the inevitable pain to come. Worse, they will not understand why they're as responsible for breaking the system as anyone.

Mr. Cooper, if you're reading this, please give serious consideration to proposing a revival of the Securities Turnover Excise Tax. Arguably if the STET were still in play, there would be considerably less day trading, less wild speculation and more investment. The current mess is one of the things the STET originally aimed to prevent.

A revival of the STET would also realize around $150 billion a year by most estimates, and that money would come from the people who want to play on Wall Street, taxing their trades directly. Give that a few years to play out, and we'd get back what the bailout plan wants us to put in, and Main Street would never feel that pinch.

[Cautious]

Obama should also have the entire White House, especially areas in which important discussions are held. I wouldn't put it past Cheney to leave some electronic bugs behind.

[Nexialist]

The electoral system is so corrupt that only corrupt people can get elected. We are stuck; a recent poll revealed 60% of Americans would vote every member of Congress out if they could. But unfortunately, like our schools, everyone despises the institution but likes their own representative. Because of seniority the most corrupt are the ones who have been there the longest. If the market is going to crash, let it happen right before the election so all incumbents have the greatest chance of going down in flames.

[darker]

Republican bug exterminator Tom Delay brought in the bugs who are
chewing up the government!

We need a real exterminator to deal with this mess.
We can't afford republicans any more. They're too damn expensive.
And they refuse to govern.

[CitizenE]

Can we afford in the future to elect politicians who believe in oversimplified ideologies, who are ignorant of the complexities of other nations, especially nations we consider invading, ignorant of scientific discovery, ignorant of how our economy functions? The calamity of the last eight years is that we have had 4 major disasters--9/11, the Iraq Occupation, Katrina, and the Wall Street meltdown--all of which were predicted and predictable, but Americans only found out about them after the disasters had occurred. The incompetence of those whom we have elected to office, particularly those in the current adminstration of our nation has been jaw-droppingly incompetent. We no longer can elect people who want to impose reality without regard to reality, people who want to reduce everything down to soundbytes like "tax breaks" and glib oxymorons like branding oneself a maverick. And we cannot and should not allow others who wish to blame the victims of scammers for the scam itself.

[desade]

The american people DO vote for inadequate people. The house is sorely lost with this politician acting at the "behest" of the voters. He lacks common sense or even a responsibility for his actions. Yet he should be the voice of his constituents, which obviously is totally lacking!

[tbone99]

we have to absolutely destroy the idea of repugs being the party for economic restraint .
i think think using this fact from your article as a slogan should do it:

George W. Bush, has borrowed more money from foreign nations than his 42 predecessors--combined.

[FrankFurter]

Our system was not designed to have professional politicians.
We need to clean house and start over.
People, it is time to vote out all incumbents.

[jrysk]

Here's a new amusing term which I find descriptive and with which you might want to acquaint your readers:


ZOMBICONOMY: a situation in which nothing can be valued, but some transactions still take place as if things could be valued. Cheers,John Ryskamp