Bailouts and Stimulus Package Final Blow to the Economy

Then…

The following is a letter that I wrote to my representative before the vote on the first bailout.

The Honorable (Name of Representative)

Dear Sir...

I am writing to tell you that I do not want you to support any bailout of Wall Street. I understand both sides of what can happen, with or without the bailout, and I believe that either way, the market will adjust itself, and it will be painful.

We now know the impact on Wall Street from federal manipulation to increase loans to those who were high risk to default. We now see that congress failed to act on a problem that they are partially responsible for. And lastly, we are beginning to see the corruption of the individuals responsible for Fannie and Freddie and the senators who refused to take action several years before today. Enough is enough.

In brief, without the bailout, credit tightens, more banks default, and individuals lose jobs and savings. With the bailout, we lose $700 billion of the public's money, the value of the dollar weakens further, credit tightens, more banks default, and individuals lose jobs and savings.

There is no win/win here. A few reckless individuals have made a bed that many of us are going to have to sleep in until we can work through these losses. I am greatly concerned that people like Chris Dodd and Barney Frank, who bear much responsibility for this mess, are now drafting a "solution." We the people do not support further government intrusion into this calamity with a bailout. Everyone is going to learn a hard lesson about government manipulation in free markets.

Again, please do not vote yes for any bailout on Wall Street, Fannie and Freddie, or any other entities that have gambled on financing and lost.

Thank you.

Now…

Here we are at the end of January and we can evaluate how congress has performed in addressing problems in the economy, which, by and large, they caused.

First, congress gave themselves a fat pay raise ($4,700) and then had the nerve to claim that there was nothing they could do about it because it was “automatic.” The average salary for our lawmakers is currently $169,000.

Then they passed the mother of all pork spending bills. It’s a free-for-all orgy of reckless congressional spending. What jobs it claims to create will cost an estimated $275,000 for each one.

So how about the performance of the banks who got billions of dollars of mine and your money? When asked how they were investing public money, they responded:

"We've not giving any accounting of… it." Thomas Kelly, JPMorgan Chase.

"We're not providing… tracking." Barry Koling, Sun-Trust Banks of Atlanta

"We're choosing not to disclose that," Kevin Heine, Bank of New York Mellon

"We manage our capital in its aggregate." Tim Deighton, Regions Financial Corp

Now many of our governors, who refuse to balance their budgets, are lining up trying to get our money to continue down the same rut that they seem happy to wallow in. Most states are asking for some form of bailout, yet not one state has cut spending and produced a reasonable budget.

“History will be angry at congress and their colleagues for betraying the Constitution. Their attitude underscores the reasons that the Constitution does not repose in the Congress the power to bail out individuals or private industry: Bailouts violate the Equal Protection doctrine because the Congress can’t fairly pick and choose who to bail out and who to let expire; they violate the General Welfare Clause because they benefit only a small group and not the general public; they violate the Due Process Clause because they interfere with contracts already entered into; and they turn the public treasury into a public trough. Worse still, Congress lacks the power to let someone else (Henry Paulson) decide how to spend the peoples’ money… because delegated powers cannot be delegated away. Andrew Napolitano, ‘The Bitter Fruit of an Unconstitutional Bailout’”

Congress has one job to do; uphold the Constitution while representing the people. Government is expensive, burdensome, and inherently inefficient. The term “less is more” couldn’t apply to anything better.

Finally, the federal government does not generate wealth or income. They take it through regulation and taxation. The nearly $1 trillion spending bill that is being called a stimulus package, will be taken from the tax payers, then given back to us according to the whims of our elected officials.

What about not taking it from us in the first place? That would be a real economic stimulus AND controlled by the people.