Heads They Win, Tails You Lose: Why the Bailout Plan Will Fail U.S. Taxpayers

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Updated 10/07/08

By Shah Gilani
Contributing Editor
Money Morning

My sister lives in a landmark building in Coral Gables, Fla. There was a fire in one apartment in the building. After that fire was brought under control, the fire department – for some unknown reason – dropped a hose in the burned apartment, and left the water running … for hours.

That inane maneuver destroyed many apartments, crippled the building's infrastructure and resulted in the building being temporarily condemned. The entire building was closed down for many months. Every person who lived there had to relocate. My sister, fortunately, had the wherewithal to take up temporary residence in the world-famous Biltmore Hotel.

But others weren't so lucky.

When the banking-system bailout plan – formally referred to as the "Emergency Economic Stabilization Act of 2008" – was originally unveiled, the financial-crisis firefighters at the U.S. Treasury Department were essentially reprising the Florida firefighting strategy. And U.S. taxpayers can anticipate an outcome a lot like the one that afflicted the Coral Gables apartment dwellers.

Unfortunately for the U.S. taxpayer, there's no Biltmore in which to seek temporary shelter. There's only one U.S. economy, and we have to stay in it, whether it's been condemned or not.

The Senate passed the bailout bill late Wednesday night (Oct. 1), followed by the House of Representatives Friday (Oct. 3). U.S. President George W. Bush signed the bill into law immediately after the House vote.

Treasury's Eight-Point Plan – for Failure

In plain English, here's what's wrong with the newly passed "bailout" plan and what alternatives should have been included as part of any plan that had a hope for success.

The Treasury plan was originally predicated on buying $700 billion of collateralized residential mortgage-backed securities that banks could not unload. The idea was that the banks would get the money, which they could then turn around and lend to keep the credit markets open and credit flowing throughout the economy. In the meantime, the Treasury Department would sit on the securities until it is able to sell them, hopefully at a profit. The idea, from a theoretical standpoint,isn't stupid. It is, however, impossible to implement to any degree that will result in its intended effect.

Here's why:

  1. There are more than $1 trillion worth of subprime collateralized mortgage-backed securities out there – and that's just one type of problematic derivative security. The bottom line: $700 billion isn't enough. Period.
  1. The purchase plan is not limited to just residential mortgage-backed securities. Surprise! What else will Treasury buy?
  1. Who's going to fight off the lobbying groups out to influence the managers that the Treasury Department hires to direct money to their masters? Did we mention that $700 billion wasn't enough?
  1. The government plan is even more under-funded than people realize, for it doesn't authorize the full $700 billion: Indeed, it starts with only $350 billion, leaving an even greater shortfall. Did we mention that $700 billion wasn't enough?
  1. Treasury is going to hire banking-industry managers to manage the process. Those managers are going to serve themselves – just as they served themselves to get us into the crisis.
  1. There is no defined mechanism to determine what price the Treasury Department will pay for what it buys. For argument's sake, even if Treasury were to only buy the problem securities its leadership speaks of in public – residential mortgage-backed securities – there are problems if it prices them too low: If that happens, some holders won't sell them, taking the chance that if they hold them long enough they will be worth more than Treasury is willing to pay. How will those financial institutions regain liquidity if they won't sell the securities needed to make this happen?
  1. Since Treasury can't buy all the problem securities, if it prices what it's going to buy too low, all remaining holders will have to mark down their holdings and take more write-downs and losses. How will that create confidence and facilitate "liquidity"?
  1. However, if the Treasury Department prices the securities too high, several problems quickly emerge: Hedge funds will rush to sell their current holdings, and may very well speculate by buying up more securities to sell them at a higher price (profit) to Treasury, meaning that the Treasury Department plan won't necessarily be helping banks directly. What's more, if those securities are priced too high, and the market for them continues to fall, taxpayers will eat the losses – a reality that likely will lead to an end to further program funding.

The "Heads I Win, Tails You Lose" Bargain

How are the Treasury Department and the U.S. Federal Reserve going to be able to conduct objective, responsible policy regarding fiscal matters and interest rate decisions when they will have to simultaneously "manage" the government's portfolio of securities? There will be conflicts and there will be fallout for the U.S. dollar and fallout with regard to American interests vs. the rest of the world, with whom we trade and partner with in all manner of ways, not the least of which involves our own national security.

While the idea that taxpayers should get warrants and ownership in the entities that we buy securities from is theoretically a good idea, there are some issues. Let's take a look at some of the biggest potential pitfalls:

  • Foreign banks aren't going to be thrilled about that; yes, they are included in the list of whom the Treasury will buy from.
  • Are taxpayers going to be limited partners in hedge funds? What if those hedge funds implode?
  • The U.S. Treasury Department could end up in control of our banks. Considering how well they run the government's fiscal house, is that what we want?
  • Who is going to decide when to sell any of government's ownership interests, should they turn out to be profitable? Will we own these businesses forever?
  • Is government going to control private enterprise? Is this a ruse? Are we heading into an era under the stewardship of a socialist government?
  • There is no direct support for homeowners in the plan and no support mechanism for falling home prices. And yet, these twin evils are the root causes of what has happened.

After the House rejected the initial bill – and U.S. stock prices plummeted – the Senate rushed through its modified plan, which the House subsequently passed and the president signed. But that was just another hose from the same firefighting gang that can't shoot straight; which will further douse the prospect of a directed approach.

Here are some of the additions that were made to the plan that the House originally rejected – meaning they are part of the plan that was signed into law. Ask yourself this question: What do they do to actually address the credit crisis?

  • Extend unemployment benefits: That's super – so when we're all out of our houses, we'll have enough unemployment to stay at the Biltmore for a day or two.
  • A $1,000 tax deduction for homeowners who don't itemize. Great, I can buy a cheap inflatable raft to float away on the red ink that flows out of my house.
  • A reduction on the tax on dividends repatriated from foreign earnings. What?
  • Economic stimulus measures – such as spending on transportation projects. That will actually help; if they build canals around my house, when I float away on my red-ink raft, at least I won't end up in uncharted waters.
  • Increase Federal Deposit Insurance Corp. (FDIC) deposit-insurance-coverage per bank account from $100,000 to $250,000. That will definitely calm nervous bank depositors, especially all those who have more than $100,000 in their many accounts. Personally, I wish I had that worry. Do you?

What is the common denominator to all these add-ons? They are meant to be added up so that Congress can say: "This is how much we're going spend to help fix the problem that will benefit you, not just the $700 billion going to Wall Street." Don't buy into this.

However, my very favorite proposal is the push to do entirely away with fair-valuemark-to-market – accounting. This is being pushed by none other than the American Bankers Association and – guess whom else – the Securities and Exchange Commission (SEC). That's the same SEC that presided over the demise of The Bear Stearns Cos. (now part of JP Morgan Chase & Co. (JPM)), Lehman Brothers Holdings Inc. (LEHMQ), and American International Group (AIG). It's the same SEC that eliminated the up-tick rule. And it's the same SEC that handed over to the exchanges the authority to decide who should be on the "do-not-short" list.

The truth that needs to be front-page news it that if there wasn't Fair Value, mark-to-market accounting we would never have seen this crisis coming. Doing away with mark-to-market accounting does not change the value of problem securities. Period. Doing away with mark-to-market will only bury the bodies under the rubble. The stench will eventually suffocate us all…to death.

A Real Solution

On top of the list of solutions should be an immediate address of:

  1. Regulation.
  2. The nature and existence of problem securities.
  3. A means of accurately and transparently pricing those problem securities.
  4. A cleanup of attendant problem instruments (credit default swaps) that are massively contributing to the problem and – in and of themselves – are sinking the U.S. economy.
  5. The need to facilitate an accounting aide – short of eliminating mark-to-market accounting – by directly addressing how banks can still hold these problem securities and not have to incur unrealistic write-downs and losses.
  6. A means of allowing problem securities to be used as collateral when borrowing from the Fed.
  7. A method of helping homeowners directly.
  8. A strategy that will support the housing market with sensible tax and capital gains policies.

The problem right now is that we're being force-fed a political solution in the immediate glare of an election, instead of a sound economic, market-based solution to a financial crisis.

The 228 House Representatives who on Sept. 29 put aside political pressure to heroically vote against a flawed plan should have taken the lead in this firefight to offer up an alternative plan. It just so happens there was a really good one out there. The problem is that it wouldn't serve the "Masters of the Universe," the lobbyists, or the politicians who are paid off by both.

[Editor's Note: Contributing Editor R. Shah Gilani has toiled in the trading pits in Chicago, run trading desks in New York, operated as a broker/dealer and managed everything from hedge funds to currency accounts. In his just-completed three-part investigation of the U.S. credit crisis, Gilani was able to provide insider insights that no other financial writer or commentator could hope to match. He drew upon the experiences and network of contacts that he developed through the years to provide Money Morning readers with the "real story" of the credit crisis - and to propose an alternate plan of action. It's a perspective on the near-financial meltdown that more than 100,000 readers have already read - and an insight that you'll find nowhere else.

If you missed Gilani's investigative series, Part I appeared Sept. 18, Part II ran Sept. 22 and Part III was published Sept. 24. Gilani's plan was published on Sept. 25 as an open letter to U.S. Treasury Secretary Henry M. "Hank" Paulson Jr. It actually contains contact information for readers who still wish to protest the government's action with the bailout bill by passing their disenchantment along to their elected representatives in each state's governor's mansion, and in both the House and the Senate. Check out Gilani's plan of action.

With the U.S. financial markets in such disarray, Money Morning is looking for profit opportunities beyond U.S. borders: For instance, just check out this new report on a Wisconsin-based company we've discovered that's posting quarter after quarter of earnings surprises - while the rest of Wall Street tanks. Not only does this company have a lock on China - the fastest-growing market on the planet - this corporate gem is also riding the profit wave of the most-powerful global trend that we're following right now. If you act on this opportunity now - as an added bonus - you'll also receive a free copy of CNBC analyst Peter D. Schiff's New York Times best-seller, "Crash Proof: How to Profit from the Coming Economic Collapse."]

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About the Author

Shah Gilani is the Event Trading Specialist for Money Map Press. He provides specific trading recommendations in Capital Wave Forecast, where he predicts gigantic "waves" of money forming and shows you how to play them for the biggest gains. In Short-Side Fortunes, Shah shows the "little guy" how to make massive size gains – sometimes in a single day – by flipping large asset classes like stocks, bonds, commodities, ETFs and more. He also writes our most talked-about publication, Wall Street Insights & Indictments, where he reveals how Wall Street's high-stakes game is really played.

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  1. Peter Black | October 2, 2008

    I have lost all confidence in the economy, the stock market and the banks as a result of the fear created by well, everyone I guess, so I took what was left of my 401K, mutual funds and stocks and cashed out. Do I buy gold? Or some other tangible thing?

  2. John HAwkins | October 2, 2008

    Just a comment on putting bankers in charge of administrating the plan…..who would be better? Retired school teachers, day care workers, nuclear engineers…..how about letting people who are good at their jobs do their jobs……. If the government hadn't forced banks to loan to people who couldn;t repay (Community Reinvestment act – CRA) we wouldn;t be in this mess….period…. The democratically authored housing bill that passed had 96 revisions to the CRA…why did they do that ?

  3. Randy | October 2, 2008

    Your articles are on the mark, but fail to indict one of the causes. That the congress and the clinton White House pushed lenders to lower standards on loans. Then gave them the ability to shed those loans to FNM and FREnso when the loan went sour it wasnt on their books. Repealing Glass Seagal didnt hurt either.

    I doubt we can go back and see an even bigger crash coming. As for Peter Black, I would buy some gold, some coffee, cigarettes, whiskey and bullets. And enough food, clothing and shelter to weather the storm for a couple of years.

  4. Tony Baldasare | October 2, 2008

    I agree with the bailout heck they should make it even higher say 1 trillion, however they should take the money from the over-seas accounts of Bush,Cheney,Paulson and all the other bureacrats whom have stolen billions of dollars from the Amecican people

  5. Don | October 2, 2008

    Suddenly, Ron Paul's warning's are hitting home and becoming all too true. I believe he is correct in his assertion that it is the Federal Reserve that must be eliminated and sound monetary policy restored before we all end up as economic slaves to the international banking cartels.

    For me, I will never ever again vote for a republican or a democrat. That have proven beyond a shadow of doubt that they are two wings of the same bird of prey.

    It seems the only statesmen lie within the Constitution and Libertarian Parties. The big 2 are full of self serving egomaniac's.

  6. Bruce Williams | October 2, 2008

    GS worked for years getting ready to profit on the inevitable crash, positioning people in key positions, letting Warren in on the game, they deserve their success, they earned it.

    They have monetized their control of Treasury, World Bank, etc.

    If we didn't know we live in a Goldman Sachs world, soon it will be obvious.

  7. Joe Clements | October 2, 2008

    Good Day Shah Gilani, Could it be that the fire fighters extinguished the fire in textbook fashion. Did the fire fighters leave the hose running purposely, reason being if they did not the embers created from the extreme heat could have allowed the structure to reignite, this would have caused the whole building to burn to the ground. Either way it could mean large expenses must be incurred in order to rebuild, I unfortunately do not understand allot about government or the banking industry, I have read lately on your news magazine that gold and oil are good investments.
    The future has an uncertainty that I can see in the horizon, safe money is hard to recognize these days and the one with George Washington is looking more like the grim reaper than in recent history.

    Cheers,
    Joe Clements

  8. Julf Schwenke | October 2, 2008

    The only people that should be bailed out are the innocent, naively incompetent, who purchased homes because the banks and institutions lend them the money these people clearly, could not repay, where in fact the bank became the speculator and acted irresponsibly.

  9. Economic Blunders | October 2, 2008

    We, the working class have bailed out the Wall Street elite, have been gouged by the oil companies, and have had all of our good jobs exported now we are going to be gouged by taxes. We have broken the camels back. Take a look at this http://www.BuyMyHouseBeforeTheBankTakesIt.com ; this is the future for America’s working class.

    Bill Clinton came into office with $400 Billion dollar deficit. Faced with challenges, he protected the American economy with the fair trade act. He did allot of good things for this country and left office with a $560 Billion Dollar SURPLUS. He signed an "affordable housing" bill to help low income people with affordable housing.

    President Bush came into office with a $560 Billion dollar surplus. He signed the free trade act, American Companies jumped ship and exported our jobs, bankers exploited the affordable housing bill, John McCain warned congress about the mortgage crises but America ignored it, times were good. Now we are projecting a $110 billion deficit by 2018. Its time to address economic policy.

  10. Economic Blunders | October 2, 2008

    We, the working class have bailed out the Wall Street elite, have been gouged by the oil companies, and have had all of our good jobs exported now we are going to be gouged by taxes. We have broken the camels back. Take a look at this http://www.BuyMyHouseBeforeTheBankTakesIt.com ; this is the future for America’s working class.

    Bill Clinton came into office with $400 Billion dollar deficit. Faced with challenges, he protected the American economy with the fair trade act. He did allot of good things for this country and left office with a $560 Billion Dollar SURPLUS. He signed an "affordable housing" bill to help low income people with affordable housing.

    President Bush came into office with a $560 Billion dollar surplus. He signed the free trade act, American Companies jumped ship and exported our jobs, bankers exploited the affordable housing bill, John McCain warned congress about the mortgage crises but America ignored it, times were good. Now we are projecting a $110 billion deficit by 2018. Its time to address our economic policy.

  11. Chuck | October 2, 2008

    The bail out is more about protecting the wealthy than helping the working man and woman that has lost there home or is in danger of losing it. Most of middle class America has lost ground every year for years if inflation were to be fairly calculated based on the money we have to spend to live, and work. Time to let the dice fall where they fall, and what's with the money market save, that money was never not considered at risk……100% risk….. Again the wealthy protecting the wealthy. Let the dice fall where they may and everybody will get hurt, nearly every one played a part one way or another, at least the wealthy will get spanked too..

  12. Wood | October 2, 2008

    Just follow the money trail. The funds will go to Golman Sax then on to the New York Fed. The New York Federal Bank is a great place to start an INVESTIGATION into the money flow. From there The Funds goes to Britian. Then to International Settlements.

    Nice racket. All participants are criminals who are working with the Illumanati to bleed funds from the U.S. Banking System. Look to March 09 through the Summer for the real effect of this Bail Out to cause major problems in the pocket of the U.S. taxpayer.

    Sad. Sad. Sad. Shamefull. Evil.

  13. John Robbins | October 2, 2008

    Unfortunately Shah Gilani's largely unsupported comments are the same coming from most people who don't understand this issue and/or the anticipated Gov't intervention to help correct the issue (surprising considering his supposed financial background in the "trading pits" in Chicago etc.). Of course no plan is perfect, and as many have mentioned before this is not what folks want to do, but have no choice to do. So $700 billion is not enough per Shah, of course you also stated you don't know how much will be paid for these securities so how do you know whether $700 billion is enough or not. You say "what" to the plan of reducing repatriation tax on dividends into the US like you either don't think it makes sense or you don't understand. The point on that provision is that there are billions of dollars sitting outside the US that could come into the US but companies don't want to pay taxes to the US gov't to do so. So right now, the US gov't is not benefitting by those funds sitting idle in other countries. By letting this money come into the US it can be a large financial stimulous that is clearly needed at this point.

    I really think it's dissappointing that articles like this make it out there so that folks who don't understand the financial situation and corresponding government intervention can read and either further not understand or be completely misled.

  14. Rich | October 2, 2008

    I'll ramble some here, but it's out of confusion, anger, frustration, you get the picture.
    Glad that this article gets to express some interesting problems and solutions. It's great to read something that rings clear and doesn't make me want to throw up. I'm amazed at all the hype over the $700bn bailout. The U.S. is going to slide into depression, unfortunately, with or without the bailout. Housing and mortgages were the drivers of the recent economic boom and will be the demise of the economy as well. How can home prices stay high in face of unemployment and low savings rates? Once the Fed starts raising mortgage rates home prices will continue declining until the employed can afford to buy. That will be many years off at this rate. Where were the mortgage regulators when home prices out paced employment pay levels? How can anyone think that home prices will stabilize above the affordability of current wage levels? Who in their right mind will pay much more for something than is is worth now and will be worth in the near future? And id the foreclosure rate slows down, it still doesn't solve the flood of inventory on the market from being absorbed anything soon. Infact, it may take a number of years, if the Fed lowers rates in face of recession, before the U.S. dollar is strong enough again to make someone willing to buy a home. Let's face it, why buy a dying cow, if you can drink the milk from many other moowing cows, for much less today and for years to come?
    Bailout? No thank you. That's like throwing kindling onto a flaming mess. The markets will fall with or without the bailout money. Instead, let's put the money where it matters most, not in the pockets of polititians and bankers on Wall Street, give it to Main Street where it's needed. Better yet, use it to buy gold and back the U.S. dollar with something real, that will bolster the economy and bring interest rates in line with savings rates for the man on the street to keep.
    You can bank on that!.

  15. Brian Schaefer | October 2, 2008

    I think several of Shah Gilani's concerns can be mitigated w/ good oversight of the process so the bankers aren't self serving; the Treasury won't be setting the prices as he claims, the banks will set the prices in a reverse auction and the mark-to-market issue is right to remove as traders should mark-to-market but any institution planning to hold the asset for a long time need not mark-to-market in my opinion. And finally, so what if the Treasury ends up "nationalizing" the banking industry? It doesn't have to be permanent – perhaps long enough to see us through this mess. They could privatize the banks whenever the coast is clear.

  16. David W. True | October 2, 2008

    How can such "responsible" people be so disconnected?

  17. David W. True | October 2, 2008

    How can so responsible people be so unaware of the functioning of financial affairs . The public is told only half of the story, and unforootunately most of them do not have the financial training to comprehend the results.

  18. H. Craig Bradley | October 2, 2008

    There are sure no share of critics who write or broadcast what President Bush should or should not do. Similarly, many suggestions as to what Congress should not do.

    However, Congressmen, the president, and senators live in a political world, with their respective party agendas. It is a world of fast money and even faster women. Always chasing both. Journalists write about personalities and issues. In government, the same issues seem to recycle over and over and over.

    Frankly, I am increasingly disinterested and bored with our government. Care to write about Chinese, Russian, or Iranian government affairs instead and what they should be doing?

  19. Leslye | October 2, 2008

    Rich

    I give you 700bn Kudos for your comment. ;o) I'm with you.

  20. Richard Newquist | October 2, 2008

    Buy properly discounted properties using your own self-directed Roth IRA. See my article at:
    http://www.jacksonville.com/tu-online/stories/062406/reh_tax.shtml Just copy and paste.

  21. Richard Newquist | October 2, 2008

    Gilani's article really clarified the problems associated with seemingly complex trading and accounting rules and methods. What in the world is wrong with our "leaders"? Are they actually crooks?

  22. Rich | October 3, 2008

    Thanks for mucho Kudos Leslye, but rather than give me anything, share the message with those who need to hear the truth, the whole truth, and nothing but the truth, or there might be something like a French Revolution, you never know! "Off with their heads, figuratively speaking".
    Rich
    ;)

  23. Sparrow Trading Corp. | October 3, 2008

    Excellent.

  24. Bill Thetello | October 3, 2008

    Good Bye America How Are Ya
    Don't ya know I'm a native son.
    I was born when ya had good value's
    but now you've turned your back on God.

  25. Robert Birdwell | October 3, 2008

    For all of the intellectualizing, a critical point has been missed.

    From 1970 to 1995, we all had the most powerful "regulating" tool on earth, Title 18 U.S.C. Section 1964(c).

    The congress was conned into inserting an "exception" into the law. That supposedly innocuous exception removed the standing of any citizen to sue for any injury as a result of any conduct in the sale or purchase of securities, and gave exclusive standing to sue to the United States.

    To defeat RICO, all the United States had to do was refuse to prosecute those committing securities fraud. Injured parties were left waiting for prosecutions that never came. Thus, injured citizens had no actual recourse.

    1995 was also the very time banks wanted into the securities business in a big way. It was shortly after the 1995 exception that these morphing chimera's called derivatives entered the market. Soon, every type of loan, mortgage, car loan, and credit card debt, was bundled and sold as "derivatives."

    Investment Banks and brokerage houses could not get enough debt to package and sell. The fees were huge, and easy to come by.

    As derivatives became worth less and less, more and more were packaged and sold. The United States SEC and the DOJ had the exclusive power to oversee, regulate, and prosecute the criminals, since all of these "securities" trades were done in interstate and foreign commerce, but the SEC and the DOJ were never in the fight and intentionally refused to do so.

    The perfect vehicle was the insane notion that the value of your home was going to increase exponentially, forever.

    Unwitting people were talked into refinancing, or selling, their existing homes and talked into participating in the greatest real estate market in history.

    It didn't matter if you made $10 per hour, refinance your home and buy another one you can sell for a huge profit before the payment increases. What could possibly go wrong.

    You were dealing with real estate and financial "experts." Everybody was doing it. It was the "smart" thing to do and you're not stupid! Besides, all of these people are licensed and regulated by the government!

    The people running the investment banks in Europe and Asia were primed to buy into these "miracle investments." They invested big.

    When these "investments" began to sour, it was the foreign banks and investment houses that wanted to find a back door.

    That "back door" could only exist if the Americans bought back all of the bad paper. Threats of an "economic Armageddon" were made. China and others would dump our currency and debt. Sanctions would be imposed. Our economy would be destroyed. Trade would end.

    The Bush/Paulson remedy was to "hypothecate" the future production and wealth of American citizens by creating a gigantic fund – guaranteed by the citizens of the United States – that would be used to "buy back" the worthless paper being held by foreigners.

    $700 billion, $5 trillion, you pick the number. It doesn't matter. Not one penny will go to help American citizens in the process of losing their homes. Not one penny will go to companies being forced out of business.

    Not one penny will go to "loosen up" domestic credit. Banks don't need it. Banks create money out of thin air when you sign a note. Your note creates the money, more notes (federal reserve notes), but you have to pay it back with money already existing that you generate from your work.

    Your life, and that of your family, for generations to come, has been pledged, by congress, as security to pay all of this back.

    Money you didn't steal, but money you have to pay back.

    The "Emergency Economic Stabilization Act of 2008," ain't what the name implies. Welcome to slavery, indentured servitude.

    We can overrule it. And overrule it we must!

  26. Deborah | October 4, 2008

    I have one question… why does no one address the real issue, that the Federal Reserve needs to be abolished, that this country needs to issue it's own money and completely ban Central Banking. Isn't that why our ancestors left in the first place?

  27. Billy Hewitt | October 4, 2008

    This was a Financial 911 attack on America and the crooks led by pathological liar Bush defeated the american taxpayers easily. Now all american taxpayers are liable for the $1,000 TRILLION derivatives market.

  28. Jeff | October 4, 2008

    Our elected leaders have no fear of us, the voter because they don't have to. Our elected leaders know an incumbent is virtually a lock to get re-elected.

    On November 4th, it is time to punish our elected leaders who voted for this communist bailout by voting ALL incumbents out of office, perhaps to the extreme that we vote ALL and any Democrats and Republicans out of office. Time to wake up and smell the coffee or we get exactly what we deserve.

  29. Joe Taxpayer | October 4, 2008

    Are you kidding me this whole thing is a BIG joke. And what makes matters worse is the joke is on the tax payers. NO BODY will go to prison for what has happened because they are have hands in eash other's pockets. It's shameful that our leaders need oversight and we need some looking over the cookie jar….. SHAME ON ALL of YOU! Can we get anything passed in this country simply because it's the RIGHT thing to do without it being a DEM. or Rep. proposal, who cares and WHO is looking out for the little guy in all of this. Let's look at the fact that 90% of our politician's HAVE NOT generated any revenue for this country ourside of working off the backs of the tax payer. Besides that they will take care of before the rest of us at NO CHARGE to them. Am I the only one that see's the BIG picture here?

  30. Jack Bozeman | October 4, 2008

    Whatever happened to common sense. It certainly did not go to washington. I've seen things similar to the following. It's one solution to the problem that DOES NOT steal money from my wallet.

    You cannot control a system using positive feedback. It will cause the system to oscillate out of control. $700,000,000,000.00 is positive feedback.

    Negative feedback is used to control a system. In this case:

    1.) Break up each business having trouble into it's smallest elements. This should result in several additional businesses. This also automatically results in the elimination of the management layer that allowed this to happen to begin with. Send those people home. I doubt they will starve. When a business or an institution falls to do business correctly and folds, and affects the economics of people around the world, that business is a monopoly. Breaking up these business makes them competitors, again, and removes the monopoly. When smaller business fail they have less affect on the market, and we are not faced with the problems we have today.

    2.) Have the mortgages for each person revert to it's original mortgage rate (regardless of it's subprime status), make that a fixed rate rather then a variable rate. If the homeowner still cannot afford the monthly payment then extend the mortgage to 40 years. Fewer will default on their loans and money will begin to flow again.

    3.) Cut taxes, always a good negative control. Puts more money in the hands of the consumer. Let's them spend more money.

    4.) Support the investors by setting up an investment listing with all of the, "now", smaller businesses as members of this investment. They are still investing in the same group of businesses only now it is handled by an investment firm such as Fidelity.

    5.) Require all homeowners defaulting on subprime loans to set up a budget and stick to it. All defaulted loan holders lose the right to have a credit card while they are on a government mandated budget.

    6.) Require each Bank that has loans being defaulted on to set up a family budget office in their loan department. These offices will call in each defaulted loan holder and set up a budget (as opposed to letting them go bankrupt to get out of the loan). The Office must adjust the interest rate and length of loan to ensure that the borrower can pay the mortgage payment and pay for necessary monthly expenses. Monthly necessary expenses include the basics to survive in your current situation. This does not include credit cards. Debit cards may be used by banks to verify compliance.

    Write to the national headquarters of both major parties and demand that they kick the people that voted for this, OUT.

  31. Arthur Henekw | October 4, 2008

    The government is the cause of inflation. Prices don't rise unless each individual's hurdle rate is compromised by taxes and governmment purchases from the private sector distort demand. The stagflation of the seventies is absolute proof of what happens when the government extracts goods from the private sector through increased taxes that are expended on "stuff" for people who produce no wealth (welfare cases, AFDC, supplemental security income and a million other wealth transfer gimmicks). The rich are rich and the poor are poor for a reason. Rich people put capital to work to earn a profit. Poor people put rich people's capital (which has been confiscated by the government) into lotto tickets, booze, "fun", drugs and more kids to feed. When was the last time a poor person offered you a job? So much for the value of the "needy", so much for the value of the people who consume more than they produce. Like Ethanol, the BTUs' required to produce it equals the BTUs its worth in your gas tank. Break even. How's that supposed to create wealth? How's that supposed to create the savings people need for the rainy day? The 700 billion bailout is money down a rathole…probably an Asian rathole to boot!

  32. Jon Reina | October 4, 2008

    Giving away US $700 billion of tax payers money as help to troubled US banks, is only an advanced form of death help that want help anyone in the long run, nor the troubled US banks or nor the common people that holds a subprime loan.
    The only way to solve this crisis is to let the crisis go on and let the free market deal with the consequences. This will of course increase the crisis for a shorter period of time and a lot of banks, bankers, brokers, managers and other capital owners will fall over and go broke, but it is the right and liberal way to things.

  33. Marilyn | October 4, 2008

    Nobody's talked about all the "fat" that's rolled into the 700 billion, making it about 8 1/2 billion dollars.

  34. Paolo | October 4, 2008

    For the love of God you people. Why are the criminals still tolerated? The Federal reserve bank (a private company) is illegally producing currency (see the constitution) and manipulating interest rates to produce panic just like it did in the late twenties when it created the great depression using similar tactics to those used in the eighties to bring about the mortgage crisis and recession seen during Reagan's reign.
    These people should be prosecuted, their assets (which have been stolen from the american people) seized and returned to where they belong. investigate and prosecute. make the lawyers (in my opinion also criminal) work pro bono. Take back your inheritance and legacy. DO SOMETHING!! Why is there no rioting?

  35. Eva | October 4, 2008

    This Bailout or any other is doomed to fail! Reason? Democrats still control both houses, (I might add that is partly my fault also, I have always voted Democrat). No More! How long have they been in control? What have they done to prevent this? nadda! Not one thing, yet they are ready and willing to pass the blame! When someone can't take blame for their own failings, they are not to be trusted! I will never vote for another Democrat, and will not vote dor anyone holding office at this time in either house! They are all a disgrace to America, and Obama with his lie's, ooops, that's not politically correct is it? His misleading and false statements are the worse! There is absolutely no way I would vote for him! When he open's his mouth he vomits lies! And I hope America wakes up and see's who he is! PLEASE AMERICA, WAKE UP, CHECK HIS VOTING RECORD! MCcAIN/PALIN IS BY FAR THE BETTER CHOICE! As long as the Democrats (THIS IS COMING FROM A LIFELONG DEMOCRAT) are in charge, this bandaid, or any other is doomed to fail!

  36. Becky | October 4, 2008

    The big picture in all of this is that we the people have to think of an effective way to be heard and respectfully listened to by our leaders whom we put into office and can take out of office. As long as they get away with the many things that they have implemented into law to get us where we are now… they will feel even more impowered if they do not have to answer for it. The first thing that can be done to get their attention that we have full control of is cleaning house. Elections are only 4 weeks away. And surely the representives that turned a deaf ear on the people will not be fogotten in that short of a time span. There has to be consequences for the actions of the leaders in the house and the senate who were put in there by the people they chose to ignore. There were very few that said no. Even the nay sayers should have tried to strong arm the aye sayers. So with that I say America lets clean house…..Whoever winds up in there after the clean up can't do any worse than has already been done. And the ones who are not up for reelection will get the message LOUD AND CLEAR.

  37. James Snyder | October 4, 2008

    It seems to me if they were willing to spend 700 billion, they could of at least put some of it to work in a place that actually would have had some effect on the economy. In the hands of the american people who actually spend it, generating economy. Not some chicken feed stimulous payment, that wouldn't even pay the average monthly morgage. The bottom line is if we Americans are out of work, no money is moving. Who cares if the banks free up credit lending if no one has money to pay it back. Its a bandade on a wound pouring a river of blood.

  38. Rita Haun | October 4, 2008

    Our ELECTED officials got us into this mess. This "do-nothing" Congress is killing us one stab at a time. Let's clean house!! No returns to the Senate, NONE!!! If you are in the Senate, enjoy it now because you will NOT be returning. Start with Pelosi and lets work our way down to the newbies. America can not afford any more of the same, and I am not bashing Bush with that statement. I am bashing the Senators that have lined their pockets, gotten grants for gerbils or to study the sand flea or whatever worthless legislation they have squeaked thru piggybacked on some necessary legislation. This bail out cost every American, even the newborns, over $2,000. It has invited China into our financial business and it has enough pork to feed most of the world! CLEAN HOUSE AMERICA!!! We have this power! Use it!

  39. Ian | October 5, 2008

    Does everyone realize that we are following a more or less pre-ordained path?

    Let us not forget that those individuals who 'guide' the financial corporations are extremely clever people. They have expected and planned this global event in order to centralise as much fiscal power as possible.

    As many people have already observed, the bail out can only serve to place a much larger burden on the man in the street. So I ask this question . . . why have our elected representitives chosen to support this course of action, which is so blatantly contrary to our best interests and wishes?

    Everyone one this planet needs to remember that we refer to polititians. Polititians the world over are deliberately targeted on a daily basis by interest groups who have a specific agenda they wish to promote. In order to curry favour, incentives are proffered and in some way shape or form a deal is struck. Effectively, our polititians governing position is out to tender on the open market. Obviously, interest groups with deeper pockets get to have a larger say in the manner in which our countries are governed. It is a fact and mearly a reflection of our society as a whole. To any remaining doubters, I say this. Consider the primary desire of any polititian;- To be elected/re-elected. EVERYTHING else comes a poor second. What has been proven beyond doubt is that money buys elections and that the money markets place huge funds into the campaign coffers of whoever it thinks will further its aims.

    All this postulating is all well and good – but how do we attempt to minimise the impact of this deliberate act against the ordinary person. Someone commented 'why has there been no rioting?'. I certainly hope we avoid that eventuality, but it may happen if enough people can't eat/heat their home or lose their home entirely. We have already seen this earlier this year in Haiti.

    I am not conversant with the finer points of American electoral law so would be really interested to know what would happen if NOT ONE SINGLE VOTE was cast in the forthcoming election. Imagine the impact of all the television coverage of completely deserted polling stations! Maybe I am being naive but I feel only by saying that, we no longer support the whole corrupt system, will any change for the better occur.
    This appears to be a pre-dominantly American site, so I will ask you all to think globally. Here in Europe we are undergoing a similar process under the stewardship of Sarkosy. He is detemined to develop a 'United States of Europe', (again a centralisation of power), in which the populace is taxed even further in order to fund the financial centers.

    Whether you like it or not, America has led the way in allowing itself to become the pawn of international banking. If you feel that somewhere amongst the plethora of candidates/representitives/congresspeople you have just one person who cannot be bought/blackmailed or bludgeoned by the fiscal giants – then certainly vote for them. Personally, I will never vote for a politician ever again – I don't trust them to be able to sit the right way on a lavatory.

  40. Eva | October 5, 2008

    Here's the bail-out plan that I can support!

    Are you for or against the $85,000,000,000.00 bailout of AIG?

    Instead, what about giving $85,000,000,000 to America in a 'We Deserve It Dividend'.

    To make the math simple, let's assume there are 200,000,000 bonafide U.S. Citizens 18+.

    Our population is about 301,000,000 (+/-) counting every man, woman and child. So 200,000,000 might be a fair stab at adults 18 and up.

    Divide 200 million adults 18+ into $85 billon that equals $425,000.00.

    My plan is to give $425,000 to every person 18+ as a 'We Deserve It Dividend'.

    Of course, it would NOT be tax free. So let's assume a tax rate of 30%.

    Every individual 18+ has to pay $127,500.00 in taxes. That sends $25,500,000,000 right back to Uncle Sam via taxes.

    But it means that every adult 18+ has $297,500.00 in their pocket. A husband and wife has $595,000.00.

    What would you do with $297,500.00 to $595,000.00 in your family?
    *Pay off your mortgage – housing crisis solved
    *Repay college loans – what a great boost to new grads
    *Put away money for college – it'll be there
    *Save it in a bank – create money to loan to entrepreneurs
    *Buy a new car – create jobs
    *Invest in the market – capital drives growth
    *Pay for your parent's medical insurance – health care improves
    *Enable Deadbeat Dads to come clean – or else!

    Remember this is for every adult U S Citizen 18 + including the folks who lost their jobs at Lehmann Brothers and every other company that is cutting back. And of course, for those serving in our Armed Forces.

    If we're going to re-distribute wealth let's really do it…instead of trickling out a puny $1,000.00 ('vote buy') economic incentive that is being proposed by one of our candidates for President.

    If we're going to do an $85 billion bailout, let's bail out every adult U S Citizen 18+!

    As for AIG – liquidate it. Sell off its parts. Let American General go back to being American General. Sell off the real estate. Let the private sector bargain hunters cut it up and clean it up.

    Sure…it's a crazy idea that can never work, but can you imagine the Coast-To-Coast Block Party!

    How do you spell Economic Boom?

    I trust my fellow adult Americans to know how to use the $85 Billion 'We Deserve It Dividend' more than I do the geniuses at AIG or in Washington DC.

    Remember, this plan only really costs $59.5 Billion because $25.5 Billion is returned instantly in taxes to the government.

    Just a thought.

  41. Eva | October 5, 2008

    New York Times Article Predicted 2008 Bail Out in1999-Truth!

    Summary of the eRumor:
    An eRumor with an attached news article from the New York Times from 1999 predicting the 2008 financial crisis, that the Government would intervene and casts blame on the Clinton Administration for pressuring Fannie Mae to extend credit.

    The Truth:
    Steven A. Holmes wrote this article for the New York Times on September 30, 1999 and it is posted in in the news paper's archives. The story reported that Fannie Mae was under pressure by the Clinton Administration to "extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans." The article goes on to say that Fannie Mae was taking on significantly greater risks in doing so and predicted a government intervention to bail them out.

    If you haven't already done so, look at this URL and read the entire article. According to this fact site, this is TRUTH. Not fiction.

    http://www.truthorfiction.com/rumors/f/nyt-fannie-mae-clinton-1999.htm

    We agree .. it isn't the fault of the Bush administration.

    Bush's fault? I think not.

    Subject: Notice the DATE on the article

    No wonder we got into this mess.

    The New York Times

    Business

    By STEVEN A. HOLMES

    Published: September 30, 1999

    In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

    The action, which will begin as a pilot program involving 24 banks in 15 markets — including the New York metropolitan region — will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

    Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

    "Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements," said Franklin D. Raines, Fannie Mae's chairman and chief executive officer (and current Obama advisor). "Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market."

  42. Eva | October 5, 2008

    This Bailout or any other is doomed to fail! Reason? Democrats still control both houses, (I might add that is partly my fault also, I have always voted Democrat). No More! How long have they been in control? What have they done to prevent this? nadda! Not one thing, yet they are ready and willing to pass the blame! When someone can't take blame for their own failings, they are not to be trusted! I will never vote for another Democrat, and will not vote for anyone holding office at this time in either house! They are all a disgrace to America, and Obama/Biden with their lie's, ooops, that's not politically correct is it? Their misleading and false statements are the worse! As long as the Democrats (THIS IS COMING FROM A LIFELONG DEMOCRAT) are in charge, this bandaid, or any other is doomed to fail!

  43. ricky vaughn | October 5, 2008

    I fell if usgov was really trying to help they would put the 700bill in the pockets of each familey allowing them to pay off debts and povide money for kids college and just mabey if they just have to increace tax to american people we wouldnt mind paying higher tax too system

  44. Maggie Kinder | October 5, 2008

    Why don't someone start a petition to get term limits on our Congressmen like we have on our President? Some of those people have been in office over 50 years and are bleeding this country with their "pork" projects. I'm sure there would be enough signatures to get on a national ballot for everyone to vote on.

  45. Maggie Kinder | October 5, 2008

    I have none

  46. Carol Greenwood | October 6, 2008

    I think we need to limit congressmen to only two terms that cannot be consecutive. They need to be out of office at least two terms before they can run again. That would give the home state time to digest what they had done and how effective they were. One criteria for re election should be did they work for the good of the country and state or just to line their own pockets. I for one am tired of party politics. Let's elect people who will work for the good of the country and not the good of the party and good old boy policies.

  47. Harry Bottomstone | October 6, 2008

    First of all I would like to say that this display of such disrespect of our elected officals to the Majority of American citizens who Demanded that they NOT vote for this Bailout Bill leads me to believe we voters should DEMAND term limits. Think we have a chance?

    Now, Did you see how the Speaker of the house held-up the passed bill like it was a brand new baby? Like they did some noble act for us? And all the finger pointing and blame game? They didn't do a darn thing for us. They just gave a "Financial Wizard" from Wall street $700 billion plus to dole out to his fat cat cohorts who already ripped off the public, and I don't mean Wall street, I mean the jerks in Washington that run our country. If ever there was a time for a political reveloution in the USA, it's now. We have computers at our disposal and we should start it now. These next four years are going to be rough for us Americans. I really think we should watch them very closely and keep calling and or emailing them until they see us in thier dreams.

  48. chris erickson | October 6, 2008

    Well now that congress has given in with out a fight ; tucked their tails between their legs … Maybe they could really do some thing to help…
    Like stay in Washington DC and put together a real bill to help the economy , instead of going home to con people into letting them keep their jobs…..
    First lets take Fanni & Fredi back as government regencies ; discount all the loans ( prime or rick mortgages / 1st , 2nd , 3rd trust deeds & the equity lines ) they hold by 25% & lower the interest rates at the same time to 4.5% for the next 3 to 5 years then let them float at market…. Because to stabilize this economy you need to stabilize housing & the ability to get a loan… & I don't see the banks or lenders doing it
    on their own >> They will just be very tight & afraid to loan…. Until you get this done , it will not happen , it will be just a stagnant ; side ways slide for a long time … This is what happened in Japan….
    Next with all of the manufacturing capacity and space ; that we have & not using around the country .. Give the companies in this country small & large that are on the cutting edge of green tech
    a leg up .. Give them 1% government financing to get started ; payments to be made as they show they are going someplace & ready to produce a product…
    Then any company that is U S corporation based that does not produce here losses all tax breaks ,. companies that do produce & manufacture here get them … also companies that out source more
    than 10% of their work force lose all tax breaks…..
    This should be across the board ; whether it is manufacturing ; services , information or design ,…We made auto manufacturing do it , so why not all business / companies…
    We also have more than enough oil & natural gas in this country that if we develop it we would not be at any ones mercy ..
    We need to produce more bio fuel ; but not from food grains ; the are better ways that are cheaper & faster…( less water , fuel & natural resources needed )..
    This is what congress should do these last few weeks / months of the year ; but I think they have their tails between their legs & their heads in the sand or some where the sun doesn't shine ..
    The truth is that the Banks & Lenders are sacred to death ; so do you really think they will actually do the right thing ??? What we need now is FDR & the congress of the late 20's to early 30"s
    a least they weren't afraid to act & do the right thing…..

  49. M.A. | October 6, 2008

    I think this is a scam that the democrats caused and they want us to pay for their mistakes. Barney Frank and Nancy Pelosi are two of the worst offenders. If you think voting for Obama will take care of us, you are sadly mistaken! Obama is also a big cause of this mess. People WAKE UP!

  50. Jodi | October 6, 2008

    Eva; you need to do your math! that's $425, not $425,000.

    and AIG is paying a hefty interest rate to the gov't for that $85b.

  51. George | October 6, 2008

    Shah Gilani ..you are a great article contributor editor..What americans ignore is that Osama Bin Laden is hiding in WallStreet , somewhere in the corporate buildins of JPMorgan, Sachs, Lehman …you name them..better yet…Osama IS WallStrret..it finally destroyed the empire thru bankruptcy…the new dollar will be called American Peso !!

    Cheers !!

  52. Anna Gaines | October 6, 2008

    This was all a plan by the Bush Administration to complete the
    sell out of America as we know it now. The North American
    Union has been the reason he was put into the Presidency by
    the Globalist Corporations. He vowed to complete the NAU
    before his term was up. Is it up now? You decide.

    American has been sold out by the give away to Wall Street,
    nobody would believe this will work to the advantage of the
    country! This only saves those corrupt corporations who have
    spent our money so freely.

    Now is the time to print the 'Amero' and old American dollar
    will be gone forever! That was the plan! We have more to
    come, surprises on the way!

  53. K.J. Gyorkos | October 6, 2008

    My Question is simple, Can anyone tell me who signed the PORK in the bailout plan? I would like the individual that did that to be published, so We as Americans can ask the Poeple that elected these involved, my our money should go to any Wooden Arrow Company………..Very Confused

  54. Bill Vaughn | October 6, 2008

    Stop already with the idiotic Bush bashing. You want to blame someone, start with Jimmy Carter and his massive giveaways. Then go to Billy Clinton who started the bankruptcy of America with his greed. He placed Paulson, Raines, Johnson, and Gorlich among others to insure America's defeat. No, it wasn't Bush. His big mistake was to keep the Clintonistas as his advisers on in his administration. Question of the day: what CIA Director when asked by Bush if there were WMDs in Iraq said," It's a slam-dunk, Mr. President…"; and who appointed that CIA Director..hum-m-m?

  55. Joe L. Henderson | October 6, 2008

    When this abomination surfaced I emailed both the DNC, RNC and all activist groups that have emailed me. My statement was I would vote NO for any YES voter running for reelection.
    In the interim before the final vote, I received our absentee ballots. I checlet voting records, and voted as I had stated.
    For the Presidency we held our noses. For the rest, a plague on both houses but at least some showed courage, and, got our votes! Recession, my eye, the word no one wants to mention is DEPRESSION and that is where overpriced and and overvalued stocks, bonds, and mortgages are taking us at increasing speed.

  56. Joe L. Henderson | October 6, 2008

    Another stupidity, how are all the silver bullets supposedly to be fired off help investors who can't invest, noninvestors who won't. or somehow supposedly help a mortgage market not realistically repricing actual worth of the bad deals they have
    made. Real estate is worth precisely what one will pay and another take…and who will loan money on that! In the Depression, homes were reevaluated and notes and interest adjusted to keep financial institutions from collapse…it was not based on milk of human kindness but in realizing all the real estate in the world was worthless when it could not be sold.

  57. Greg Gau | October 7, 2008

    I'm guessing that we the people Of this United States are again at the complete control of leaders who say they are helping us. They, I truly believe, really don't care of us the
    peole who pay the bills. It's my money that I need to support my family. Democrats/Republicans whoever its time to get us back in the prosperity game. Find the people bilking our system and make them pay what the rest of us pay. Quit the freeloading and sign up for the tax cycle like the rest. Or get out!!

  58. Joe LaRue | October 7, 2008

    How is this plan suppose to help my struggling steel business in florida. Is there a designated bank to contact for an emergency bailout loan for my companies problem. Or …am I s— out of luck. And I'm dead serious.

    Please tell me!!!!!!!!!!!!!!!!!!!!!!

    Thanks.

  59. jeff richards | October 7, 2008

    This is totally disgusting. All we read in the press is the Bail-out of a banking crisis……

    Well…lookie here…what the so-called "bail-out"…ALSO INCLUDES !!!!!

    Sec. 101: Extension of alternative minimum tax relief for nonrefundable personal credits.
    Sec. 102: Extension of increased alternative minimum tax exemption amount.
    Sec. 201: Deduction for state and local sales taxes.
    Sec. 202: Deduction of qualified tuition and related expenses.
    Sec. 203: Deduction for certain expenses of elementary and secondary school teachers.
    Sec. 204: Additional standard deduction for real property taxes for nonitemizers.
    Sec. 205: Tax-free distributions from individual retirement plans for charitable purposes.
    Sec. 304: Extension of look-thru rule for related controlled foreign corporations.
    Sec. 305: Extension of 15-year straight-line cost recovery for qualified leasehold improvements and qualified restaurant improvements; 15-year straight-line cost recovery for certain improvements to retail space.
    Sec. 307: Basis adjustment to stock of S corporations making charitable con tributions of property.
    Sec. 308: Increase in limit on cover over of rum excise tax to Puerto Rico and the Virgin Islands.
    Sec. 309: Extension of economic development credit for American Samoa.
    Sec. 310: Extension of mine rescue team training credit.
    Sec. 311: Extension of election to expense advanced mine safety equipment.
    Sec. 312: Deduction allowable with respect to income attributable to domestic production activities in Puerto Rico.
    Sec. 314: Indian employment credit.
    Sec. 315: Accelerated depreciation for business property on Indian reservations.
    Sec. 316: Railroad track maintenance.
    Sec. 317: Seven-year cost recovery period for motorsports racing track facility.
    Sec. 318: Expensing of environmental remediation costs.
    Sec. 319: Extension of work opportunity tax credit for Hurricane Katrina employees.
    Sec. 320: Extension of increased rehabilitation credit for structures in the Gulf Opportunity Zone.
    Sec. 3 21: Enhanced deduction for qualified computer contributions.
    Sec. 322: Tax incentives for investment in the District of Columbia.
    Sec. 323: Enhanced charitable deductions for contributions of food inventory.
    Sec. 324: Extension of enhanced charitable deduction for contributions of book inventory.
    Sec. 325: Extension and modification of duty suspension on wool products; wool research fund; wool duty refunds.
    Sec. 401: Permanent authority for undercover operations [as related to tax provisions].
    Sec. 402: Permanent authority for disclosure of information relating to terrorist activities [as related to tax provisions].
    Sec. 501: $8,500 income threshold used to calculate refundable portion of child tax credit.
    Sec. 502: Provisions related to film and television productions.
    Sec. 503: Exemption from excise tax for certain wooden arrows designed for use by children.
    Sec. 504: Income averaging for amounts received in connection with the Exxon Valdez litigation.
    Sec. 505: Certain farming business machinery and equipment treated as five-year property.
    Sec. 506: Modification of penalty on understatement of taxpayer’s liability by tax return preparer.
    Sec. 601: Secure rural schools and community self-determination program.
    Sec. 602: Transfer to abandoned mine reclamation fund.
    Sec. 702: Temporary tax relief for areas damaged by 2008 Midwestern severe storms, tornados and flooding.
    Sec. 704: Temporary tax-exempt bond financing and low-income housing tax relief for areas.
    Sec. 709: Waiver of certain mortgage revenue bond requirements following federally declared disasters.
    Sec. 710: Special depreciation allowance for qualified disaster property.
    Sec. 711: Increased expensing for qualified disaster assistance property.

    Seriously, did they think no one was going to read this thing? “Increase in limit on cover over of rum excise tax to Puerto Rico and the Virgin Islands”? “Seven-year cost recovery period for motorsports racing track facility”? “Extension and modification of duty suspension on wool products; wool research fund; wool duty refunds”?
    I especially like Section # 322

  60. Bob Cornell | December 8, 2008

    Hi there to all,
    The current economic problem is the "pits". But, whose to blame for this situation ( and this is extremely important). It's
    basically the American taxpayer for letting Congress; et. al.; "get by with such chinanagins".
    If America didn't have such tremendous debt, I think we'd be O.K.
    If any budget surplus would be applied automatically to reduce our debt, I believe again, that we would be O.K.
    Instead any surplus has gone to build roads and bridges to help get the sitting Congressmen re-elected.
    Since 1878 there has been such a bill presented to Congress
    that would hopefully bring close to a balanced budget.
    Instead the the bill has never made it to the floor. It was either tabled or simply ignored.
    Thomas Jefferson is most probably known for his quotations.
    One of his most famous is " The American taxpayer has the
    responsibility to see that his country is managed properly."
    It appears that we have been shirking our responsibility by letting someone else do that for us. (those that we elect to represent us.)

    Many thanks,
    Bob Cornell
    bobwcornell@comcast.net

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