September 22nd, 2008 1:15 am | by Marc Gallagher | 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.