Bailing Out The Taxpayers For A Change
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Posted by Howard Rich | Columns
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| Wednesday 15 April 2009 7:01 PM

By, Howard Rich

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Sometimes it’s important to try and fathom the unfathomable.

For example, why is “thirteen” considered an unlucky number? Why do pigs continue to fly in Washington D.C. (no matter which party is in power)? And why would a nation already in the throes of unsustainable deficit spending think that it could somehow spend its way out of an economic downturn – to the tune of $13 trillion (and counting)?

That’s right – since the beginning of the current recession, the federal government has spent, lent or pledged $13 trillion on various “economic recovery” efforts.

How big is that number?

Well, if you were to spend a dollar every second, it would take 412,000 years to blow through $13 trillion.

If you were to lay 13 trillion $1 dollar bills end-to-end, you could travel to the sun and back – five times.

And if you were to put all of those $1 bills on a scale, you’d be talking about 28 million pounds – or the weight of 462 Statues of Liberty.

In a calamitous coincidence, those mind-boggling figures mirror an equally monumental sum – the $13 trillion that has been lost in the U.S. stock and housing markets since October of 2007.

As our Chinese friends would likely say, that’s an awful lot of ‘yang’ and no ‘yin.’

Worse still, even bigger numbers could be forthcoming – on both counts.

“The president and Treasury Secretary Geithner have said they will do what it takes,” Goldman Sachs CEO Lloyd Blankfein said last month. “If it is enough – that will be great. If it is not enough, they will have to do more.”

That’s certainly a convenient perspective coming from someone whose firm has been the beneficiary of multiple bailout billions, isn’t it?

In fact, with so much money flowing out of Washington these days, it’s useful to consider just how much of it is actually winding up in the pockets of U.S. taxpayers – whose sons and daughters are ultimately going to have to repay it all.

Based on the latest calculations from the “American Recovery and Reinvestment Act,” the answer is “not much.”

For example, President Barack Obama’s much bally-hoed “recovery” package is adding only $13 to the average American paycheck each week, which analysts agree isn’t going to do much of anything to increase consumption.

Numbers like that make you scratch your head and think about what “might have been.” Like what would have happened if our policymakers had taken the total value of all the bank and bureaucratic bailouts over the past 18 months and given that money directly to the people?

Assuming the current U.S. population of 306,000,000, you’d be talking about $42,483.66 pilfered from every man, woman and child in America to pay for propping up a failed financial system that is only further weakened by watering down the currency in this manner.

Think about that for a moment – that’s nearly $170,000 from every family of four. This is the debt to which they are being hopelessly shackled to, and they will never be able to pay it back.

Assuming this was tax-free income that could be invested back into the economy – the total amount would have been nearly equal to last year’s gross domestic product of $14.2 trillion.

That’s a huge chunk of change – in fact, it’s more than fifteen times the value of the cash currently circulating through the American marketplace.

If even a fifth of that cash was spent on domestic consumption, you’d be looking at an economic revival the likes of which this nation has never seen – a real “stimulus” that might actually justify all the borrowing.

But that’s not Washington’s definition of a “recovery.”

Instead of targeting the American people directly, they are pouring all of this borrowed money into failed banks and bureaucracies by the billions – with little to no oversight, accountability or transparency.

It’s “trickle-down” welfare – a colossal investment in failed institutions and a colossal failure to truly invest in the American people.

Trying to borrow ones way out of debt in any way, shape or form is insanity, but the least D.C. politicians could have done was to put the money into the pockets of the American people.

Maybe that would have “stimulated” something other than an explosion of government debt.

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Posted by Howard Rich | Columns
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| Wednesday 8 April 2009 6:09 PM

By Howard Rich

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, Chairman of Americans for Limited Government
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Outrage seems to be the “coin of the realm” in Washington D..C. these days – as long as it’s focused on the (former) private sector and not the government agencies and politicians overtaking it.

Politicians who, it should be noted, are every bit as culpable in creating our current economic mess.

The rules don’t apply to these “leaders,” though, even though they’ve been availing themselves of taxpayer-funded bonuses a lot longer than the Wall Street firms have.

That’s why the curious silence in our nation’s capital this week is so noteworthy – particularly after the clamoring cacophony of recent weeks.

Last month, you will recall, the proposed awarding of $165 million in bonuses to executives at bailout-backed American International Group (AIG) sparked mass political, media and public outrage.

It was “corporate greed,” and President Obama leveraged it to the max, even though he voted in favor of a bailout with zero accountability (and his own Treasury Secretary signed off on the bonuses).

Obama wasn’t alone.

Dozens of D.C. politicians who had previously approved AIG’s bailout billions nonetheless shoved their way to head of the protest line, while New York Attorney General Andrew Cuomo deftly used the issue to position himself as the runaway favorite to become the Empire State’s next governor.

This month, however, the politicians aren’t clamoring – they’re cowing.

And they’re being assisted in this game of “hide and seek” by the mainstream media – which has gone deathly quiet at the precise moment the outrage dial should have been cranked up to “eleven.”

Some would argue that the mass media silence this month is due to “Barack the Bailout King” taking his smoke-and-mirrors tour (and the presidential press corps) on the road to Europe, but surely one or two lonely reporters stayed behind to mind the taxpayer store, didn’t they?

Certainly there is additional compelling news to report beyond President Obama’s muffed “ceremonial kiss” with French First Lady Carla Bruni Sarkozy.

For example, reporters like Brody Mullins and Louise Radnofsky of The Wall Street Journal, who uncovered last week that U.S. House members had doled out $9.1 million in bonuses to their staff members – on top of the $2.5 million in automatic pay raises that lawmakers gave themselves.

According to their report, the average House aide got a 17% bonus.

And while the combined $11.6 million (and counting) spent on legislative bonuses is small potatoes compared to the AIG bonuses, consider the story published last Saturday by James Hagerty, also of The Wall Street Journal, and a few other print outlets.

According to Hagerty’s report, executives at Fannie Mae and Freddie Mac – the twin government-owned mortgage behemoths whose risky lending helped spawn the recession – will be receiving $210 million in bonuses over an eighteen-month period.

For those of you tracking the bailout trillions, that’s $45 million more than the AIG bonuses.

In fact, Fannie and Freddie executives have already been awarded $51 million – not a bad take for two agencies whose Enron-style accounting has cost taxpayers hundreds of billions of dollars over the past year.

Sadly, the investigative reporting of Brody, Radnofsky, Hagerty and others has gone virtually unnoticed.

And it’s not just because Washington politicians don’t want their double-standard exposed, it’s because network and cable TV media have already moved past “bonus outrage” and decided to focus exclusively on whether First Lady Michelle Obama curtsied to the Queen or not.

As a result, critical questions America’s Fourth Estate should be asking our leaders have been replaced by meaningless pomp and circumstance.

Like what?

For starters, when did America decide that rewarding government overreaching and incompetence was the best way to stimulate our economy?

Also, why are certain bonuses worthy of outrage and others viewed as completely kosher?

And most importantly, aren’t such illogical cash outlays an indictment of the whole interventionist approach to begin with? Shouldn’t we fire people who lead us into disaster, not give them taxpayer-funded raises?

In a word, the whole thing is “outrageous.”

Except Washington is conveniently out of “outrage” this month.

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