Senate Passes Bailout – America on Path to Socialism

by Sal on October 2, 2008

in Economy,Politics

The Senate took the country one step closer to Socialism yesterday by passing the now $824-billion dolleditar bailout package in a 74-25 vote.  In addition to the $700-billion figure proposed by Paulson, the package now contains an extension of the FDIC insurance cap from $100,000 $124 billion in “sweeteners” to help win over congressional votes: 

  • A temporary fix to the Alternative Minimum Tax (AMT)
  • Disaster aid to those in Texas and Louisiana who were affected by Hurricanes
  • Extension of the Renewable-Energy Tax Credits
  • Aid for Rural Schools
  • Extending the Deductibility of State and Local Taxes in states that do not have an income tax
  • A tax break for certain wooden arrows used by Children (I kid you not)
  • A tax break benefiting litigants in the 1989 Exxon Valdez Oil Spill
  • A measure to require large companies to provide mental health care coverage on-par with physical health care coverage

The bailout package has become a Christmas tree of special pork projects appealing to special constituencies, going from its original 3 pages to 451 pages in length

Upon hearing the news late yesterday, my reaction was to lash out at the Republicans who voted for this and call them socialists.  After having a discussion with a friend, I realized that this was more of a frustration reaction.  Most of the Republicans who support and voted for this see this plan as a bad but necessary step.  Sen. Lindsay Graham summarizes this point of view: 

I know this is not a perfect bill and I know this is a bad choice, but I also know from my common sense and my life experiences that I need to act and I need to act now and I will.

Now, I think this point of view is completely wrong and that this bailout bill is bad for the country.  It is a step towards complete central economic planning.  By bailing out Wall Street now, we are encouraging mistakes and bad behavior.  The government is buying up assets of the private sector in such a large scope ($700 billion could take $75,000 off of every mortgage in America) and promises that in doing so, the economy will be fixed and saved.  The problem with this is that every single time the government gets involved to solve a problem, it messes things up even further.  From the example of the New Deal extending the Great Depression, to the establishment of Medicare and HMOs which significantly drove up medical costs, to the current crisis in the financial system caused by Government trying to provide homes for low-income, credit risk people, the Government does not have a proven track record at solving problems.  To quote Ronald Reagan, “Government does not solve problems; it subsidizes them.”

The other area that troubles me about this is that such a massive undertaking is being rushed through the halls of congress with little debate, little chance at improving the bill, and legislators spending their time adding “sweeteners” to the bill.  There is not, by any means, economic consensus that this bill will even solve the problem; in fact, there is much economic thought that this bill will only exacerbate it.  Contact your Congressional Representatives.  Urge them to defeat this bill.  There is still time.

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Taxpayer Money Belongs to the people, Congressman. | Axis of Right
November 19, 2008 at 7:21 am

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