No Bank Left Behind. At What Cost?

Posted on September 22, 2008


OK, I do not doubt that the mighty U.S. government has the ability and resources to bail out the mighty Fannie Mae and Freddie Mac.

And OK, the mighty U.S. government will somehow figure out the insurance business of the mighty AIG.

But is the mighty U.S. government, as big and powerful as it may be, capable of rescuing the entire financial system, lock, stock and golden parachutes? At what cost, the conversion of free-market Wall Street to socialized Wall Street?

We are told that the plan for the U.S. government to pay good money for any bank’s bad loans — a rescue plan hatched virtually overnight — will cost $700 billion, for starters. They say it will be paid for by American taxpayers. So, is the plan to raise our taxes? Not exactly. The plan is to float $700 billion worth of treasury bonds. If the bonds don’t float, Plan B is to simply print money.

How are we, the taxpayers, going to pay the interest, let alone the principal, on those bonds? We’re going to pass as much as possible off to future generations. Let the children and grandchildren toil and pay.

For our generation, the entitlement plans are expendable. The rescue of Wall Street and the banking system, from sea to shining sea, will justify cutting or ending Medicare and Social Security. Will anything be left for the needy, for health care, for public education?

Sounds to me like an enormous transfer of wealth from the middle class and the poor to the banking industry, their stockholders and their CEOs.

Write the obituary for the free market. Socialize the rich and destroy the poor. — Bernie Hayden