Forget all those campaign promises of tax breaks. With the Feds giving trillions of dollars to bail out banks and corporations using your tax dollars any promise to reduce middle class taxes is impossible. Amidst the news that the nation’s “best economic minds” are going to solve the current financial crisis, the clear observation is that it is these very minds that permitted the crisis to occur. I am not in the least bit reassured that our financial future is in good hands. Furthermore, it is greatly dis-heartening that neither Obama, nor McCain can offer any better alternatives.
The American public is now in the middle of the same old refrain, more money for huge corporations at our expense so that they can continue to make more money. Between the funds for Fannie Mae, Freddie Mac, Bear Stearns, AIG and who knows who else, the Feds are committing at least $4.1 TRILLION to salvage these institutions. This is being done, we are told, to salvage the free market system: a system which, since massive deregulation, has run rampart in its effort to consolidate control over the world economy. Under the guise of globalization and free trade, these companies have grown to a proportion that would make even the economist of the early twentieth century shudder.
All that these great minds have managed to do is to give more money to those who created the problem. It is like giving more bullets to Russia because they used them up in Georgia and want to use more somewhere else. The claim is that there is little alternative. This makes no sense. If this same amount of money was given to every American household, they would get close to $15,000 per household. If just given to family households, the amount would be about $57, 000. With this money in the hands o9f the consumers, mortgages could be caught up and other debts paid down. Good for banks and good for the consumer. The government could even have deducted out mortgage payments and then distributed the balance. What would happen if the Feds mandated that all mortgage interest rates be dropped to the prime lending rate? Banks would still make some money and people could afford to make payments rather than suffer foreclosure. How about mandating that credit card interest rates be kept to 8% rather than 15-24%? Consumers could pay the bills and the banks make money. How about, like we have done for poor countries, forgive the mortgages of those under a certain income level? Keep people in the homes and refinance at a real low rate? The point is that there are alternatives worth exploring other than having our money chase bad money. Keep in mind that this $4 Trillion will not spur new economic growth nor create jobs. All it is doing is making sure that big corporations survive. What is even worse is that in this process, companies like Bank of America has gotten even bigger and now controls a greater amount of money. What does that do to help the taxpayers? What happens if they get into trouble?
As taxpayers, we are being hit from all sides. The cost of the war in Iraq and Afghanistan, billions needed for storm damage recovery and now our very bank accounts are put in jeopardy. How can we ever expect to improve education and health care when hundreds of thousands are losing their jobs, food and fuel prices are soaring and many have been relegated to a day-to-day existence? Our economic system is broke and the “laws of economics” need to be re-written. We need a consumer based system that puts customer and taxpayer first, not the mega-rich. There is plenty of money but there seems to be none for us.
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