No Future for You.

A seven-hundred-billion-dollar bailout plan? Weren't Republicans supposed to be opposed to deficit spending? Weren't they the party that was all about balanced budgets and fiscal responsibility?

That's what Republicans say, of course. And now they tell us they wish they didn't have to take this course; that the bailout violates their own first principles; that they're so, so sorry. But none of this is true. At some point in the first Reagan administration, Washington conservatives (as opposed to your average conservative pundit or grassroots activist) learned to stop worrying and love public debt. Maybe that first, gigantic deficit the Reaganites piled up was an accident, just a combination of deluded "supply side" tax cuts and a huge bag of good stuff for the Pentagon. But pretty quickly conservatives discovered that deficits, when done correctly, did something really cool: deficits defunded the left.

For one thing, deficits gave the Reaganites an enormous weapon to wield against their enemies in Congress and the executive branch. Having to pay down the debt was the excuse for "reductions in force" in agencies detested by conservatives; it was the rationale for attacks on this liberal program and that; and it was--believe it or not--the original justification for the trademark conservative innovation of outsourcing and privatizing public operations, an innovation that has, as we now know, turned out to be one of the most fantastic money-burning frauds ever conceived by the mind of man.

And then, of course, the whole thing was dumped in the lap of the incoming president Bill Clinton in 1993. The story is so famous it borders on legend: One fine day, after being briefed by his economic team, Clinton realized that, thanks to the deficit, he would not be able to enact most of the economic program he had been promising voters throughout the campaign. He cursed. He screamed. He referred to it as "Stockman's revenge," after President Reagan's budget director (whose memoirs are an invaluable account of conservative thinking about deficits). And, of course, he did as the situation bade him: he balanced the budget and ruled like a nice, responsible Republican.

When done right--or wrong, depending on how you look at it--deficits remove liberal options from the table. Suddenly there's no money for building bridges or inspecting meat. Not surprisingly, running up a deficit is a strategy favored by the wrecking crew for its liberal-killing properties.

But seven hundred billion dollars, all of it to make Wall Street whole again after it cheated and deceived itself into its worst crisis in seventy-five years? Add this to the already enormous deficit Bush piled up by sluicing waves of public money down the pipe to whatever contractor has the best lobbyists, and you're talking deficit Armageddon.

And with a deficit that size, what a lot of defunding we'll have! Perhaps your individual share of the bailout will be manageable, but its larger effects will take much more from you than you think: public schools, workplace safety, health care reform all might well be sacrificed.

These gratifying effects are already being acknowledged. On Tuesday Barack Obama recognized that the bailout may crowd out some of the programs he's been promising on the campaign trail. Yes, I know that something has to be done to avoid Great Depression II; I know we have no choice in the matter; and I don't even have a problem with deficit spending in the abstract. But it seems to me that the combined result of all this might be to compel even Obama into acting like a Republican.

Comments

[NABNYC]

The Republicans created this monster but the Democrats rushed in to take over. Who is out pushing this $1.0 trillion bailout despite public opposition of 200 to 1 against? All the Democrats, that's who. Hedge Fund Chuck Schumer, Barney Frank, Diane Feinstein. I just saw Steny Hoyer stumped when asked why the Democrats are pushing for the $1.0 trillion Wall Street bailout. Yeah Steny -- answer that one.

Bush says he wants $1.0 trillion no questions asked. To give to Paulson who will do with it what he wants. (If Paulson's wife's birthday is anytime in October, she was probably thinking Oh Boy). Then Bush comes out and gives a tele-reader saying "I really mean it." And Pelosi, Reid, Frank, Obama rush to Bush's side and tell him: OK George, we'll give you the money. All the photos all over the news now show Bush surrounded by Democrats working on the $1.0 trillion Wall Street Bail-out. Now the Democrats have Rahm Emanuel, who as I recall was given $18 million from some financial place where he "worked" for a year. He's saying that he represents the working Americans. Sorry, I couldn't stop laughing long enough to type.

The Democrats may have just lost the election by taking over the financial disaster and making it their own. McCain may have just won because he can say he rushed back to D.C. to stop the Democrats from stealing $1.0 trillion from the taxpayers.

[alexis d]

Doubt it. The Repugnicans are on record as having pushed for more deregulation and corporate tax breaks to be in the bill. That's gonna go over like a ton of bricks with the public.

[Synoia]

The republicans have figured out what will have to be defunded - the military. There goes their rural base, supported by defence department welfare (bases).

The next president will have to lead choices, and drive home the truth that national security is based on a healty economy, not on a huge military.

[magicmary]

Can someone get this under Obama's nose before the debate tonight?? This ugly scam that has pretty much ruined my entire adult life since I was only in my early 20's when Reagan was prez, must be exposed.
I still say make the wealthy pony up or at least give us all their stuff to hold till they pay us back.

[dgscol]

I personally could sacrifice my car loan until after the election. I am willing to wait until we have a regime change.

What is a little distressing is Obama's reticence. Could it be those guys in his campaign connected with the banks?

The name of the game is delay, delay, delay, and this is something these people know how to do. Blame the other side, so you do not lose contributions. No one has even demonstrated that there is a crisis yet.
People/companies are still getting big loans.

[Project4NuBostonTeaParty]

To Torrrep and all other dittoheads who post here:

Give up on this Community Reinvestment Act. It's over. You're exposed.

Did you swallow the Karl's Kool Aid that 3% of the nation's mortgages are bringing Wall Street to its knees?

Get a clue. This bailout is for bets made on the market.

Look down in the muck and you'll find the PRODUCTS that created this madness... Credit derivatives. Credit swaps ... The real assets got lost. They're invisible, vanished into thin air!

This bailout is about BETS built on BETS built on even more BETS -- all made on Wall Street, which operates like Las Vegas on steroids. These were bets that people will pay their mortgages. Bets that they won't. Bets that the bets will lose. Bets that the bets will win.

Tentacles like Medusa's head grew from the investment firms into the insurance industry and credit rating companies. This financial implosion is a monster created by greed and dishonesty. And the players -- who knew this day was coming -- should have to clean it up with their own money.

They could start with throwing into the bailout pot their $38 billion in bonuses last year -- then we'll talk about saving their sorry asses.

Or "rescue" their sorry souls, whichever word Karl just plucked from the dictionary.

[knowBuddhaU]

WOW! Never have I read such erudite comments. Looks like I'm not the only Harper's fan here. That was brilliant. I esp. like the Medusa metaphor.

[GOVSUX]

Why do Democrats need Republicans to pass this B.S. bill, they have majorities in BOTH houses.

[AddictedToHope]

Majority in the senate isn't enough. Need at least 60 votes to stop a filibuster.

[gregk991]

If the Democrat pass a $1 trillion bailout without wide bi-partisan support it will be political suicide. The Republicans will paint the Dems as the party that straddled the next two generations with an enormous debt to bail out their rich Wall Street friends. They would paint themselves as the friend of the little guy. Complete BS but boy would it sell! No thanks.

[hopeless277]

If I were handing out money, I'd give it to the people who were going to give it right back to me. Since Wall Street gives millions to the GOP, well, that's who gets the money the Repubs are handing out. I just wish Bush would hurry up with the martial law and constitution suspending stuff. I guess he's waiting for October. Boy, it's really gonna be something seeing those Blackwater Hummers with the 50 cals on top crusing the streets of my home town. Do it already, George! You know you're gonna!!!

[sgerhart]

My brother! (or sister!) You think they'll draw straws to see who gets elected then whacked, so Cheney oops . . . I mean Bush can stay in office?

I'd like to be a fly on the wall for that one. I could see McCain crying if he doesn't get the short straw. " You said I would get to be next George!" Obama would be bumming cause you know they'd make sure he gets it. As Token from South Park would say - "Damn I hate you Cartman" Better watch out for Sarah though, she's liable to take 'em all out, and her and DIck could consumate their evil and bring forth the anti-christ, Drill Baby Drill plus she,s got a witch hunter on her side. LOL

HAHAHAHAHAHAHAHA think i'm losing it!

JUST KIDDING!!!!

[boing007]

hopeless277

If I were handing out money, I'd give it to the people who were going to give it right back to me. Since Wall Street gives millions to the GOP, well, that's who gets the money the Repubs are handing out. I just wish Bush would hurry up with the martial law and constitution suspending stuff. I guess he's waiting for October. Boy, it's really gonna be something seeing those Blackwater Hummers with the 50 cals on top crusing the streets of my home town. Do it already, George! You know you're gonna!!!

Maybe he won't do it, but I'm sure he'd love to do it. He's The Decider, after all.

[breakfast]

We have only one party in this country, the Corporate Party. The two factions of this Party, Republicans and Democrats, with few exceptions, have been busy selling this country out, and not even always to the highest bidder. I don't really know how long this has been going on, but the action began in earnest with Reagan, and has continued unabated since then. As we suffer through the reign of Bush II, we see that they have become brazen in the extreme, dropping all pretense of adhering to quaint notions of government of, by or for the people. Government is to serve the interests of its Corporate master, the people be damned.

The only difference I see between the Republicans and Democrats is that the Republicans are by far the more enthusiastic true believers, while the Democrats, on occasion, throw a few crumbs to the People.

[knowBuddhaU]

Couldn't agree more.

[sgerhart]

The whole thing was planned. Check this out and connect the dots. Here's a start - Paulson was CEO at Goldman http://articles.moneycentral.msn.com//Investing/Extra/HowGoldmanProfitedFromSubprimeMeltdown.aspx?page=all
Why are we wasting our time and effort debating, we have no power to affect these events, we should be stockpiling seeds and storing water, we're gonna need it!

[Dan Sweeney - Huffpost Blogger]

Is it weird that my first thought, upon seeing the title of this piece, was "Is he quoting the Sex Pistols or paraphrasing the Soup Nazi?"

Anyway, I gotta back Frank here. One of my first thoughts upon hearing of the initial bailout scheme was that it was a two-birds-­with-one-s­tone move that would both kill the plans of the Obama administration and allow Bush's cronies one last mad grab at the treasury.

[Citizen54]

God save the queen
The fascist regime....

No future, no future,
No future for you
No future, no future,
No future for me

[sufi66]

And now billions of dollars will flood Wall Street as thr Senate today voted against extending unemployment benefits in a time when unemployment is as bad as after 9-11.

Worse, you can forget about health care reform. It seems all is going to plan because the rich and super-rich just don't like paying taxes.

And we let them get away with it by voting for Reagan, Bush 1 and 2, and possibly--amazingly enough--- McCain.

CAN WE BE ANY DUMBER?

[Citizen54]

Wait til election day and we'll see just how much dumber we can be.

Remember the headline in the British newspaper (the Guardian, maybe?) after our 04 election? Something like "How stupid can 250M people be?"


But this time around, along with stupidity, we can racism in the mix.

[torrrep]

Mr. Frank. I will accept no lecture from party that has single handedly put our financial crisis in jeopardy. It's quite convenient that you guys ignore that fact that it was liberal democrats who screamed for the easing of loan restrictions so that those who could not otherwise qualify for loans would. You ignore the fact that it was liberal democrats who pushed for the Community Reinvestment Act which basically was affirmative action for those who couldn't afford homes. Banks were forced to make loans to people who could not afford them so that they could meet criteria set forth by this act. Not only did this act force financial institutions into making ill advised loans, it opened the door for illegal aliens to take out loans that they could not or never intended on paying back. It is also liberal democrats who claimed in 2005 that republicans were crying that the sky is falling when congress was warned about the direction Freddie Mac and Fannie Mae was heading. It was liberal Democrats that blocked Senate Bill S.190, which would have required Freddie Mac and Fannie Mae to dump some of their high risk investments in order to stabilize their balance sheets and protect their assets. So, Mr. Frank, go ahead and blame republicans for the failure of YOUR party. We have the Congressional Record on our side.

[apduncan1]

Hogwash!

Banks are not forced to make loans to nobody. Nobody can force a bank to do anything..­.

We have a Ponzi scheme about to come unraveled; remember ENRON?

Nobody forced ENRON to make trades that turned out to be just schemes to produce bonuses for the traders. Be it water plants in Argentina, power plants in India, etc.

The scheme here is similar... it just so happens that it is time to pay the piper and the market for new loans (read: bonuses for traders) has dried out. No new money is coming in and the hedge funds have to pay up in October.

Ken Lay of ENRON tried to obtain a loan/rescue package fro "the Oval" and it did not pan out and the ENRON Ponzi scheme collapsed.

For one reason or another this rescue package is being considered serious... Ask yourself: who benefits? And, who pays for it?

ENRON imploded. The middle class in this country will implode too.

[torrrep]

You are not very bright. The Community Reinvestment Act did just that. It required banks to provide loans in low income neighborhoods regardless of whether they could actually afford to pay them or not. Maybe you should try reading the law before you comment on it.

[Querent]

Your comment fails to acknowledge the first rule of politics, although it graphically illustrates it: Repubbicuns always lie.

[torrrep]

Really? I lied? Ok then I guess these sources also lied:

http://www.usnews.com/blogs/sam-dealey/2008/9/10/barney-franks-fannie-and-freddie-muddle.html

http://www.youtube.com/watch?v=3QBRIsCkGQ0

http://ibdeditorial.com/IBDArticles.aspx?id=306370789279709

[cmhmd]

So this is the fault of people getting $75K to $150K mortgages in relatively depressed areas?

And those interest only loans and other "fun" lending vehicles were only minor players?

And those wise grey men were being forced against their will to grant these loans?

And Alan Greenspan didn't tell us we had nothing to worry about, because escalating housing prices took the risk out of those loans?

And Elliott Spitzer didn't try to warn the Republican controlled congress about the predatory lending practices of Countrywide and others?

I could be wrong, so I hope someone more knowledgeable will post for us.

For a party that like to think it's "all that" about economics, let me paraphrase Olympia Dukakis in "Moonstruck," "What you don't know about economics is a lot."

Cheers,
Cheers,

[KHAAANNN]

Gee, I don't know how time works in your world, but according to MY atomic clock, the REPUBLICAN PARTY was in control of BOTH houses of congress for the last 12 years, and ruled all three branches of Government for 8 years (their ability to filibuster or veto still gives them control after the 2006 elections.­)
Who took the Glass-Stegal act out behind the toolshed and shot it in the head?
Who took all restraints off of ENRON and their like and began the stock swindles?
Who removed taxation from Investment gains and inherited wealth?
Who cut the tax rate of the upper 5% to the lowest point in the HISTORY of the income tax?
Who got us into two ruinous wars with no way to pay for them?
Who exploded the deficit by 500%?
Who gutted government agencies and replaced them with no-bid private contractors who cost 5 times as much?
Who increased earmarks by 500%?
"Liberal" Democrats? All 15 of them?
Hear those wirring sounds?
That is the sound of Teddy Roosevelt, Eisenhower, and Goldwater spinning in their graves.
Rooseveldt broke the Trusts
Eisenhower fought the Military-Industrial Complex.
Goldwater told you to get the hell out of everyones personal lives and leave them alone.
All three of them would spit on the current Republican party.

[Querent]

Thanks for that list. Don't expect to make any impression on torrep, though. His mind is clenched like a fist on a single idea: Democrats bad, Repubbicuns good.

[knowBuddhaU]

Bravo! Great rebuttal, KHAAANNN. Love that screen name, too. Wonder if there's a neoKHAAANNN out here somewhere? I can see Stephen Colbert yelling it now.

BTW, wouldn't Colbert make a kick-ass poet laureate? Or is that what he's doing already?

[frappe]

Great points, Khaaannn -- thank you.

[torrrep]

Next time maybe you should read what this thread is about before you go spouting off. None of the points you made have to do with anything that I mentioned. Also none of your points have anything to do with the failure of Fannie Mae and Freddie Mac. So once again maybe you should read the thread and try to stay on topic so you don's sound so ignorant when you make as post.

[mcostello]

While the dems did all that, the real issue is the deregulation of credit to large institutions. They became over leveraged and then when the bad loans started shaking out, it crushed them.
Your anger would be better spent at the executives of those companies that juked the numbers to get massive bonuses, and then suddenly, the books went south.
Your children and grandchildren will pay for their theft.

[StephenDedalus82]

One question I have is whether the Democrats will have the cajones to reduce "defense" spending. They've had a blank check for way too long--our government spending priorities make us look more like North Korea than a modern democracy.

[apduncan1]

Ahem, it is COJONES. Cajones are dresser drawers...

[johnsopinion]

That "blank check" brought to you courtesy of Richard Nixon.
(The year and reason I said goodbye to the Republican Party.)

Before any of today's events could happen, the dollar had to be
free floating. Nixon severed the tie of the dollar to a tangible gold
standard.

HE gave congress the 'blank check.' Now, congress could write
as many checks as they could print regardless of who was in power,
with nothing to back them up except someones word that "the money
was good."

Cool, huh?

Don't you wish you could do that?

[Eoin45]

Why is defense in quotes? Quotation marks indicate that the words were said by someone. Your useage is incorrect.

[StephenDedalus82]

I was using them as scare quotes--I feel the term "defense" is a bit Orwellian.

[OrganOfThought]

Yes absolutely! That is the key. End the occupation of Iraq and save 12 billion a month. Generally reduce the military budget from whatever it is now (about $500 billion) by a hundred billion. Close off shore haven tax loopholes and various other corporate tax loopholes and add another huge number to federal budget.

That should be more than enough money to implement the needed programs.

Then when the economy turns around, more can be done.

[boophus]

Joe Blow buys a house cause rents are up ,gets a tax break and the banks are pushing . RE agents 'market is going up monthly'. So buy NOW for 150,000. Now Joe is just one of 20 others many of whom got loans for $500,000+ for homes because they were white or had better jobs. But Joe Blow is the root problem according to the bigots on talk radio and faux news. He couldn't pay his mortgage and he's black. Aha says Rush there you have it, the Dems are at fault. Its the black guy, not the rich guys running the Fed who held down interest rates and created the bubble by flooding banks with access to cheap money which they had to loan out to rake in profits,lowering standards to push through loans. Regulations were relaxed Despite the best efforts of republicans to float Faux regulation that would preclude Real Tough regulation. But NOW it is all poor Joe Blows fault with his little loan and the Dems for wanting to force banks to not deny credit based on race or sex. Yep it didn't take long for the greedy and thier fools to come up with a rationalization that allows them to feel Pure and Clean as we sink.

[mgloraine]

Your observations are quite correct. Instead of referring to the Paulson plan as a "bailout", we should be referring to it as a "deficit bomb" with its ulterior purpose being essentially an economic "scorched Earth" to defund and impoverish all Americans who don't belong to the BushCo Cronies Club. Of course Paulson and his corporate co-conspirators plan to steal all of the money for themselves, but that is not as important to them (since they are already tremendously wealthy as a result of previous crime sprees) as keeping it all away from the rest of us. The enormous sum they dreamed up - the famous $700 billion - is merely a measure of the hatred Republican corporatists hold for people who work for a living; they would rather destroy this country and starve its 300 million citizens than to allow a single social program to benefit any of the non-Aryan citizenry. They are robbing three generations of Americans to further enrich the most despicable gang of irresponsible drunken wastrels the world has seen since the days of Nero.

[OrganOfThought]

I am afraid you are correct.

[fairandjust]

Obama should remain optimistic on spending.

Think of all the money to be saved when he ends the war-profiteering in Iraq - including all the RICO proceeds from prosecuting the bushies and cronies. There will be lots of monies then.

[TRYKER]

Yes RICO will be heard around the world. Our Justice Dept will be raking in money by the bucket and we should set up a special Office of Collections to make damn sure they collect and collect and never stop.
When Obama says 'ENOUGH!' I hope he means it.
War profiteering is such a crime, who will weep for them?