Ron Paul: Derivatives Bailout In Crominbus Bill - An Omen Of Things To Come
Source Attribution: selfownership1
Public Opinions On Bailout
Listen To Ours, Give Us Yours!!
No way, no how, no plan. I called my MPs and told them I do not support this bailout.
I am a registered Democrat, but I think this is the rare issue that truly crosses the party line. There are many reasons why I oppose the bailout, and I’ll hit them one by one .
- 1) It rewards the bad actors who got us into trouble in the first place.
First of all, people who bought homes they knew they could not afford. Second, lenders who made these bad loans without worrying about the likelihood that they could not be repaid. Third, the insurers who bribed the government not call credit default swaps (CDS or mortgage insurance) insurance, freeing obligation to keep cash on hand in case they had to pay off insurance policy.
- 2) The government will probably pay more for the debt.
The problem is twofold now:
These loans are worth somewhere between.30 And .80 on the dollar, and nobody wants to buy at any price. So now the government is going to come and rescue these irresponsible lenders. You warrant that the federal government pays 50% more than anyone else would be willing to pay for this debt.
- 3) It does not solve the problem at its root. Are they going to require oversight of CDS? Will we start regulation and oversight of the shadow banking system? Otherwise, this problem will only repeat itself in 5 or 10 or 20 years.
- 4) We rush into a solution Good solutions are not developed over a weekend or two weeks . Whatever the security band-aid on they come with will be loaded with unintended consequences and lead to hundreds of billions of dollars in additional spending beyond what anyone expects. You can take that to the bank.
- 5) scare tactics used by the administration to force Congress to give the president massive new powers I’m sorry, but I can not just leave this party?
- 6) Once the government owns the debt, borrowers will be much less likely to pay if off. Think about it – all these problem borrowers are people who overpaid for their homes and borrowed more than they could ever afford. And the government has been going on for over a year about how we can not throw people in “their” homes and in the street.
- Now, all of a sudden, these people will be stiffing the government and we have homes. All about Paris if we ever evict someone? This is a giant signal to the borrowers who can not stop paying their mortgages immediately, because the government comes to their rescue. The solution will probably write off the debt of 100% and give the houses to the actual occupants.
Keep track of the Bailout status in your area: projects.propublica.org/bailout