Just give the Speculators $ 1 Trillion – It will cost less

Our great public servants were on capital hill today answering questions about the economy and the credit crisis. Mr. Paulsen explained how strong the US economy is. In a separate press conference Mr. Bush explained how optimistic he is about the strong US economy. Mr. Bernanke explained that the Federal Reserve moved so aggressively because the US economy risked a depression due to the credit markets freezing up. WTF?

What is it? Is the economy great or has irrational exuberance taken its toll on the US economy? The dollar hit historic lows again today. Oil is going to historic highs and gold moved up another $14. Little known is the fact that the Congress must pass new legislation to increase the public debt ceiling otherwise the government will shut down again. Every two years we have to increase the ceiling because we continue to raise the level at which we consider safe our public debt.

The situation of the US economy is serious. Inflation is rampant. Many middleclass families here in Texas are using their credit cards to buy food. Over the past year they have sold their vacation timeshares, they have decreased the number of times they go out to dinner during the week. One of the two parents has taken a second job. Yet they are using their credit cards to pay for food. Interestingly they have a fixed rate mortgage…

Much to the delight of Wall Street the administration is talking about using the GSEs (federally mandated corporations) to take on more of the bad debts floating around. These are the same companies who last year lost 50% of their market value because they had been cooking the books for many years. Under the guise of a limited period of time, in reality these corporations will enter larger markets and never get out creating greater exposure for the US Taxpayer.

When asked about inflation pressures from the falling dollar Mr. Bernanke responded, “It could be a problem, we are keeping a watchful eye…” We know that this is a government “of, by and for the corporation” so let’s get this out of the way. Just take $ 1 trillion and hand it out to all of the speculators who lost money by making bad investments. It will cost us less and we can start taking on the real problems of the US economy. Perhaps we can talk about rebuilding our infrastructures. We might even be able to afford healthcare for the US taxpayer. Who knows we may even be able to protect our borders and inspect imported goods.

Tags: Government Politics Recession Corporate America Finance Economy Reaganomics