First, the bailout: I'm going to quote Greg Easterbrook (an ESPN writer who's not a financial writer, but who's thoughts on this sum up mine pretty well):
It is not public intervention that is objectionable. Rather it is size of
the bailout, and the hurry-up-give-the-money-don't-stop-to-think aspect, that
are troubling. Much of the $700 billion will flow to investment-community
friends of Paulson, Bush and other administration figures. Average Americans who
behaved irresponsibly by signing gimmick mortgages may get some taxpayer aid
from the Paulson proposal, and maybe they should get none. But in the end,
average Americans will still be liable for most of what they owe -- that is,
will still be held responsible for their actions. Wealthy, politically connected
insiders who run banks and companies such as American International Group will
be exempt for responsibility for their actions, and will stuff
taxpayer-subsidized millions into their pockets.
On Sunday, Paulson called the self-serving actions of top Wall Street
figures "inexcusable" -- yet the plan is not only to excuse them, but to shower
them with free money. Paulson said Wall Street pay levels were "excessive," but
should be discussed later, after the bailout is done. Now is the moment of
maximum leverage! Once they are holding the public's money and laughing about
how easily they got it, financial executives will have no incentive to
compromise on pay. Here's an idea: Any company that participates in the bailout
agrees to limit its top-tier executives to the federal minimum wage. That is,
after all, the amount Washington says is enough to live on. Meanwhile, of the
two jokers who drove Fannie Mae and Freddie Mac into the ground, one was paid
$19.8 million in 2007, the other $14 million; each will get nearly $5 million in
taxpayer-funded "retirement" bennies.
Why are we giving taxpayer money, and this substantially much of it, to companies that we're poorly run, made deliberate choices to give out bad loans, and give their CEOs 20 million dollar bonuses for running their companies into the ground? There needs to be regulation on how it's given out. No CEO bonuses, only buy up bad debt, and put restrictions on how the company is to be run from here on out. Those at the top should be fired, and there should be a new wave of competant leadership at the top of these financial pillars. We cannot allow these companies to go under, since we need them in order to get loans, lines of credit, and to keep our economy rolling. But we also can't just throw them money to get them out of the hole. People need to be held accountable.
Next, the debt. This year alone, the national debt, including the bailout, will increase by 1.6 trillion dollars. Yes, trillion. That's a shitton. Now, I know the plan of the bailout is to somehow repackage these debts and get them eventually paid back. But you and I both know that once the government hands out money, they never see it back. And once a government program gets initiated, it's never retracted. So, we're looking at an asston of debt and no relief in sight. We need lower spending, we need less government in most aspects of our life, and we need to reduce the debt by creating jobs and increasing the tax base (the number of people paying taxes).
Which brings me to number three: Solutions. It's my personal opinion (and I'm not an economist, and haven't crunched any numbers...but this seems reasonable enough) that we need to get rid of the corporate tax in our country. Our country is already an expensive place to do business. We have a high minimum wage (comparatively), benefits obligations (retirement matching, etc.), and health care provisions. Why should the government then reach in and take a rather large chunk for itself? It's no wonder businesses are going overseas. We have the highest corporate tax rate in the world. On top of a highly paid (comparatively to the rest of the world) work force leads to companies that can't afford to do business out here.
If we get rid of corporate taxes, it will attract business to come here. Businesses that bring jobs for American workers. The government can also then offer incentives for companies based in America that give a certain percentage (>90%) of their jobs to American workers. The more friendly an environment we make it for companies to do business here, the more American workers are going to get hired by these companies. The more American workers getting hired, the more Americans have health care, the more Americans are paying more taxes (since they are making more). Also, there will be less Americans on welfare, medical and medicaid, and using our health services without a way to pay for it. It seems like a good way to promote business and jumpstart our economy, eh?
Why did America come out of the Great Depression? More jobs for American workers. Most of these jobs came from World War II. Wars don't create tons of jobs anymore, since we can make machines of war so efficiently in factories now. So we need another way to get jobs created. Enticing companies to bring their business here will do that.
Finally, I want capital gains taxes suspended in an effort to regain Americans' trust in investing in the stock market. The stock market crashed recently because Americans got scared. They were scared their money was going to disappear because of some sensationalist stories in the news about investment companies doing poorly, and everyone pulled their money out of the market. We need people to have confidence in the market again, and entice them to invest again. A good way to do this would be by getting rid of one of the penalties of making money in the stock market...the big, fat bite out of your ass the government takes when you cash out.
End rant.
2 comments:
I definitely disagree with you on the point of capital gains. If anything, an increase in the short term capital gains tax would help stabilize the market because it would discourage buying and selling with reckless abandon.
the machine of capitalism is oiled with the blood of the workers
JMB
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