Secretary (His Majesty) Paulson is stampeding Congress into spending taxpayersí money to bail out Wall Street and other bankers.
If you and I had bought these bad mortgages or the CDOs (Credit Default Obligations) who would bail us out? No one. We would have to work it out on our own.
He is telling us the banking system of the US and maybe the whole world will fail unless us little guys give our money to the billionaires in New York, London, Tokyo, where ever. Shucks, we can do it. Every man, woman and child in our country only has to cough up $2,500. I better check my bank account to see if I have that much so I can write them a check.
If you notice your local Congressman and Senator (hopefully yours isnít one of them) is fitting you with bracelets to tie your wrists to your ankles.
The latest words of wisdom from The King (as he was called by Newsweek magazine) is we will make a profit when we (the government) sell the mortgages we are now going to buy from the banks at a discount. Of course, he didnít say how much of a discount.
Letís just say for a minute that they do sell that discounted mortgage paper at a profit. Where is that profit going to show in my (taxpayer) account? Do I need to remind anyone that when money is given to the government it is spent? (There is no money in the Social Security Trust (sic) Fund).
There will be another huge government bureaucracy created just to manage the outgo and (theoretical) income of this $700 billion. This is where all the friends of the new president (whoever that might be) will end up drawing big salaries. Once a new bureau is created it is never dissolved.
This is supposed to create a surplus. Has there ever been a year when government expenditures have decreased? Never. In good times government grows to give more services and in bad times government grows to help get us out of the bad times. YUK!
The problem is not enough money. The problem is the FLOW of money. Money is the life blood of business. It has come to a halt not because there is not enough of it, but because no one trusts the collateral being given for borrowing purposes. namely these garbage mortgages created at the requirement of the federal government. (I wonít explain that here.)
The smoke screen going up says more people will be put out of work if small (and large) businesses canít borrow. There are other ways to flood the country with money.
Giving special tax incentives to business will bring back money that is now hiding overseas. This would not only not cost the taxpayers any money, but would create many, many new jobs.
Donít be stampeded by rhetoric. There are better ways to get the economy moving and save the banks too.`
Al Thomasí book, ďIf It Doesnít Go Up, Donít Buy It!Ē has helped thousands of make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com
Discover why heís the man Wall Street does not want you to know. Copyright 2008. All rights reserved.