Ron Paul and Why the Bailout Should Make You Afraid, Very Afraid

September 22nd, 2008 1:15 am  |  by  |  Published in Bailouts, Banking, Big Government, Constitution, Debt, Economics, Federal Reserve, Free Market, Individual Responsibility, Investing, Liberty, Maven Commentary, Money, national debt, Philosophy, Politics, Ron Paul, rule of law, Socialism  |  14 Responses

They aren’t even hiding it anymore. I’m speaking of course about our government’s propensity to cover up the darkness and paint everything as if the light was coming from the sun itself rather than a horrid blinky fluorescent tube. The latest bailout proposes to allow the federal government to spend up to $700 billion for purchasing bad debt from “mortgage-related assets from any financial institution having its headquarters in the United States.”

They have already modified the “having its headquarters in the United States” rule, saying that foreign companies with a presence in the United States are eligible for the bailouts as well. Well that should make those of us worried about U.S. sovereignty a bit uneasy. Of course that is now the least of our worries.

Also, the wording of the bailout proposal should make anyone concerned about federal government overreach quake in their boots. This bailout has been described as the Patriot Act for the financial sector. How can such a claim have merit? Well, let’s look at the proposal in more detail.

First the wording of the proposed limit of $700 billion shows that it is not a limit at all. The text reads the bailout “shall be limited to $700,000,000,000 outstanding at any one time.” This means that the bailout is truly unlimited. As Chris Martenson describes in his great article regarding the proposal:

Whoa!  Stop!  What is this “at any one time” language??  This means that $700 billion is NOT the cost of this dangerous legislation, it is only the amount that can be outstanding at any one time.  After, say, $100 billion of bad mortgages are disposed of, another $100 billion can be bought.  In short, these four little words assure that there is NO LIMIT to the potential size of this bailout. This means that $700 billion is a rolling amount, not a ceiling.

So what happens when you have vague language and an unlimited budget?  Fraud and self-dealing.  Mark my words, this is the largest looting operation ever in the history of the US, and it’s all spelled out right in this delightfully brief document that is about to be rammed through a scared Congress and made into law.

The proposal gets worse. Here is where it starts sounding like the Patriot Act:

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

How is that for some power? Hopefully this provision will not be in the final bill. This is proof they aren’t even hiding their thirst for power anymore. If this makes you squirm you aren’t the only one.

As if that wasn’t enough, we have to have some fascism mixed in with our socialism right? Try this part of the proposal on for size:

Necessary Actions.–The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation:…

designating financial institutions as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them;

Well I suppose if the government is bailing them out the government should be able to use them as “financial agents of the Government”.

Is this as hard for you to swallow as it is for me? The sad truth is that the final bill will likely get worse after it spins through Congress attracting more special interest provisions from both sides in the name of compromise. I’m willing to bet right now that the final bill will up the $700 billion rolling limit to a higher number.  If not, I will be pleasantly surprised.

I keep reading about how the alternative to the bailout would be much worse. I keep hearing this “we are helping main street” narrative from the supporters of the bailout. To me this is hogwash. Ron Paul said it best yesterday on CNN when he said that without the bailout we’d “have a bad year” but with the bailouts it “will be a bad decade”. I’m afraid, very afraid that Ron Paul is right again.

Responses

  1. libertyforone says:

    September 22nd, 2008 at 2:33 am (#)

    Well, as usual, Ron Paul is right. He was right when he warned of this 5 years ago. He was right when he talked about the need for monetary change during his campaign and was laughed at. He will be right about the next decade as well. This is the beginning of the third reich. You wonder how the Germans let it happen to them. It happened like this. That is how that Socialist party took over. Ever wonder how the Soviets fell for it? Like this.

    You are going to wake up in the United Socialist States of the Rest of America tomorrow morning. The USSRA.

    You will go broke. You will lose everything you ever saved. Your children will not only have a worse life than you, they will likely starve.

    This is the creation of Skynet (for you Sarah Connor Chronicles fans).

    Either SCREAM now, or enjoy your gruel later.

    People, they are talking about STEALING one trillion dollars from you right now. (If you add in what they have already spent on bailouts for Fannie and Freddie and Bear so far).

    They are not even trying to hide it anymore. You are all too complacent. I give up. I am hoarse. I am dying anyway.

    Forget 9/11, this week will be the start of the worst economic crash in history. You think it would have been bad if these companies that are too big to fail do so? What makes them any better now? When they fail next year it will be at twice, three, ten times the cost because they now have no incentive whatsoever not to lose as much as possible. Only the really big get bailed out. So, the incentive is to lose as much as you can as fast as you can, or like Lehman, you will be in the dust.

    And who pays for all of this? You and me. The only problem I have read with this plan is that they are not sure the entire net worth of every American will be enough to steal to make the system work.

    ARE YOU SCARED YET? You should be. Because you will live through a depression that will make the last look like the roaring 20s. Speak now or forever hold your peace.

  2. Deletham_Tomalak says:

    September 23rd, 2008 at 8:19 pm (#)

    Mr. “libertyforone”

    Before you explode from you illogically put together rant lets get our history straight.

    One Nazi Germany was FASCIST not socialist. They hated the socialists. So lets not start off on the wrong foot. Two, what we are potentially seeing is not Socialism but Fascism (the difference is quite large so just wait a moment). Finally, your limited view of how these things work is frightening. (Just to let you know I am a liberal who supported John Edwards so don’t call me a neo-con or any other hate terms you may like to use).

    The difference between Fascism and Socialism is in essence the role of the corporation. Right now we see fascism emerging in the national corporate/Government relationship. This is seen with the massive government tax cuts to the top 5% of Americans and the corporations themselves (who also don’t pay taxes because of loop holes). So this is not socialism we are seeing (Which would be nationalization of these companies among other scary things like Health Care *eye roll*).

    Moving on to the body of your comment. If Americans stay smart, keep their heads down, and stay level headed we all should be able to weather the storm and get out of this decently. Yes in the immediate things will be bad. Taxes will be higher and we might see the dollar value drop but in the long term we will return. Your doom and gloom worries me. The $700 Billion dollar bailout is unnecessary but the Fannie and Freddie as well as AIG needed to be bailed out. I dont like it either but it had to be done. If F&F failed that would be 5 Trillion US dollars off the radar. Gone. They back over 50% of US home loans and if those failed over 2 million Americans would lose their homes immediately.

    So please, read your facts, stay level headed, and be part of the solution not the problem. Its people like you who set out to divide Americans and scare people into submission. That sir, what you do, is Fascism and Terrorism.

  3. jess: Ron Paul and Why the Bailout Should Make You Afraid, Very Afraid :: Liberty Maven (via FriendFeed) | Pink On Brown says:

    September 25th, 2008 at 2:50 pm (#)

    [...] posted a link Ron Paul and Why the Bailout Should Make You Afraid, Very Afraid :: Liberty Maven 9:35 pm – [...]

  4. Liberty's Bell says:

    September 26th, 2008 at 12:11 am (#)

    @ Deletham_Tomalak

    You’ve mixed up your terms. Socialism is a general term for forced government removal of fruits of labor from some private citizens for the use and benefit of other private citizens.

    Fascism is a form of socialism that is characterized by GSE’s and extremely tight regulation of private entities. So, essentially, you are correct in everything except that Fascism is not a form of Socialism. The term, “Nazi,” is a German acronym for National Socialist Party. The Nazi party became synonymous with fascism because that is the style of Socialism they used and promoted.

    Now here is where you get mixed up. Communism is the other end of Socialism. Communism is the belief that everything belongs to everyone and is controlled by the bureaucracy for everyone’s benefit. Nazi’s hated Communists because they were a rival Socialist concept and because Communism is extremely inefficient. Despite this, they are both tyrannical and oppressive systems as is ANY socialist system (collectivist action has no special moral authority!).

    Now to the topic at hand. You said

    [blockquote]
    The $700 Billion dollar bailout is unnecessary but the Fannie and Freddie as well as AIG needed to be bailed out. I dont like it either but it had to be done. If F&F failed that would be 5 Trillion US dollars off the radar. Gone. They back over 50% of US home loans and if those failed over 2 million Americans would lose their homes immediately.
    [/blockquote]

    F&F were not bailed out, they were nationalized–like what Communists do.

    What I’m about to say may sound heartless at first, but in the long run, it will be for everybody’s benefit. 2 million people made a bad decision and took out loans that they could not pay back. Natural law demands justice for their lack of wisdom and insight. This justice may be harsh, but all 2 million people would never make the same mistake again. Natural law would teach them the lesson of living within their means completely.

    2ndly, if those companies failed, as they should have, then the idiots that crafted the lending policies would be out of a job, possibly be criminally charged, and receive a stigma in the business world that would put them down to delivering pizza for a living instead of the possibility of getting a golden parachute.

    And now I will tell you about the reality of not obeying Natural law (or as Adam Smith called it, The Invisible Hand). This money that the government is using is being borrowed from the Federal Reserve. The Federal Reserve creates this money by making an entry in the computer or by printing more. The natural result of more currency in circulation is devaluation of the currency. Every country that has borrowed and printed money to get out of one financial crisis has created many others that are far worse. Things like hyperinflation, etc. There is only one method for protection for the general population against hyperinflation. 1. Have no debts. 2. Have a food reserve or a way to produce more food. 3. Have the ability to defend your food reserve or means of production.

    So our Constitution is now hanging by a single thread and is extremely tattered and torn. There are several ways to rescue it and it will be rescued one way or another; however, I fear that it will only be rescued after violent armed conflict inside the 48 contiguous states. It is while we are weak economically that the likes of Russia and China will see an opportunity to grab our vast resources. Mark my words, there will be an invasion within ten years if we do not return to the Constitution immediately.

    That means that we should not bail out or nationalize any one else, return the coining of constitutional money to the Congress, dissolve the Federal Reserve and IRS, quit sending armies overseas without a real declaration of war, and finally, issue letters of Marque and Reprisal to bring international terrorists to justice.

  5. Credit Crisis Crooks | James Blog says:

    September 26th, 2008 at 12:32 am (#)

    [...] Ron Paul and Why the Bailout Should Make You Afraid, Very Afraid [...]

  6. jewknowit says:

    September 26th, 2008 at 2:36 am (#)

    Isn't the common conservative phrase "If you steal from Peter to pay Paul, you'll always have Paul's vote?" The whole thing is an outrage. I have to sweat and bleed for my money. Let the giants fall and join the rest of us "common" men.

  7. jarorick01 says:

    September 27th, 2008 at 5:43 pm (#)

    Maybe it’s me, but would it really be so bad to let these companies fail? Yes, things will be hard. DAMNED hard. Yes, I will be dicked out of a house. I’m 20 years old, I have student loans I need to pay off, and my credit is pretty much nothing. I’m not going to be getting a mortgage for at least the next 10 years, if not more. Yes, if Fannie and Freddie fall off the map, millions (make no mistake, we are talking about millions) of American’s will be without housing. It has to happen. We’re trying to plug a hole here, and this plug is only going to last so long. Throwing all of this money into the economy is either going to raise inflation rate, or it’s going to line the pocket of CEO’s who will still find themselves refusing to lend money the way they used to.

    That’s just the housing sector. Looking at a $700 billion dollar bail out on top of that, now we’re just making up numbers. Let’s not forget, this is money we (read: the government) doesn’t actually have. There is no big room with oodles and oodles of cash that Bernake swims in to get his jollies. We have a deficit. This is getting tossed onto that.

    Now lets think about how things would be if we did nothing (GASP!). People would loose their homes. People would die. My grandma is nearly 100 years old, she survived the great depression. She was poor, very very poor. We have to go through that again. Yes, it’s going to be terrible. People are going to die. Commerce on ALL levels is going to suffer. But, after ten, fifteen, twenty years we’ll be on a completely different footing economically than we were before. More over, if we actually let the people responsible for this deal with their mistakes personally, let them realize that the people who are dying are on their hands. Maybe, just maybe, it won’t happen again for quite some time. Maybe people will remember 2010-2020 as a decade of accountability, responsibility and recovery, rather than a decade of hasty patchwork legislation meant to deal with all the holes that emerge as we progress through this.

    It makes me so sick that this November, I can’t make the choice that I see as right. Without Ron Paul, this election is just a sham. For all the “change” floating around in Washington all I see is the same. Mcain, Obama, they both have no intention of returning us to a course of integrity and real reform. I plan to vote for Obama, the lesser of my two seeming evils, I just hope I don’t get shafted like I figure I will.

  8. McCain, Obama, and the Status Quo Exposed by Ron Paul and the Bailout :: Liberty Maven says:

    October 3rd, 2008 at 1:58 am (#)

    [...] there for all to read in the 451 pages of the Senate bailout bill. I’ve written recently how they don’t even try to hide it anymore. Instead they acknowledge the pork exists they then throw up their arms and say, “I disagree [...]

  9. hnrast says:

    November 13th, 2008 at 7:11 pm (#)

    Brace yourselves,

    George Bush was the Kremlin test man. Bush in the last eight years injected huge doses of socialism to the unsuspecting American populace, and they swallowed it up, hook, line, and sinker, passing the test with full-fledged honors to the delight of the Kremlin. That was the signal they have being waiting for over fifty years, knowing full well that the American populace after receiving steady diets of Darwinism, atheism, humanism and materialism provided by public education, Americans would eventually succumb to socialism, and the moment to introduce the man who will deliver the coup de grace to democracy, has finally arrived.

    The Kremlin’s boldness accentuates Americans immersion in socialism by having the freedom and the temerity to pick a mulatto candidate to be the next president of the United States of America, having a questionable national origin, obscure religious affiliations, and to top it off, Obama is a bearer of a Muslim name in a supposedly Christian nation. Twenty years ago such candidate would have being inconceivable, such concept would have being foreign to the American mind, but not today, today’s generation has developed into a vast army of government indoctrinated socialists, they are the pride of the Kremlin and of Nikita Khrushchev if he would still be alive today. Make no mistake they are the ones that have installed Obama in the White House.

    The Dictionary’s definition of Communism: “a system of government in which the state plans and controls the economy and a single, often authoritarian party holds power, claiming to make progress toward a higher social order in which all goods are equally shared by the people” Obama couldn’t help himself but manifest his true nature to Joe Wurzelbacher, the Ohio plumber by stating, “I don’t mind paying just a little bit more than the waitress that I just met over there, who can barely make the rent, because my attitude is that if the economy’s good for folks from the bottom up, it’s going to be good for everybody.”

  10. PaulRon says:

    March 15th, 2009 at 9:28 pm (#)

    ee

  11. Greg ( in th UK) says:

    May 3rd, 2009 at 7:38 am (#)

    As a Brit in the UK, I really feel for you in the U.S. . You have been sold a pup with Obama.
    As for the following from the above,

    "Necessary Actions.–The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation:…

    designating financial institutions as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them;"

    Just remember, the FEDERAL BANK IS INDEPENDENT OF THE U.S. GOVERNMENT.
    Your government is handing fiscal power that will enslave its people to an independent body that will be CONTRACTUALLY FUNDED by U.S. citizens thru the tax system. This means that come Peak Oil, when people want to start any sort of PERMACULTURE, they will be legally unable to do so becuse of contractual debt to an independent body. Start rising America, your long held democratic rights are been blown away.

  12. Gina says:

    May 30th, 2009 at 3:49 pm (#)

    Wow…you wrote this 35 weeks ago! I am impressed. Any other words of wisdom for me? You obviously are an informed and insightful person. I see everything you said last fall, today…but I didn't see it back then.

  13. Gina says:

    May 30th, 2009 at 3:51 pm (#)

    Greg, I see so many Brits commenting on our situation that really don't know what they are talking about. Nice to see one with eyes open. =)

  14. tedbohne says:

    December 14th, 2009 at 2:52 pm (#)

    well, gina, since the brits bought into this entirely AMERICAN scam, they know as much about it as you do. Actually considering the inane statement you coughed up, they way ahead of a primate such as yourself.