Some Common Sense Questions from a Concerned Taxpayer

[Blue Meany]

Given the record of this administration for using half-truths and misinformation to rush through legislation to respond to real or manufactured crises (e.g., the Patriot Act, the Iraq War Resolution), there are number of questions for that come to mind:

1) If the administration has been working on this plan for months, why is it being presented for the first time to Congress just days before its scheduled adjournment and weeks before a national election?

2) If there is a credit crisis, why do consumers continue to be deluged with mortgage and credit-card offers?

3) Central banks in Europe and Asia have made additional funds available to banks, but none of them are planning a similar bail out of financial institutions. Why not?

4) If this crisis was fueled, in part, by investor demands for high returns, doesn’t bailing out these bad investments reinforce the notion that there can be low-risk, high-return investments and won’t this encourage more speculative bubbles?

5) What is the basis for estimating that a bailout will cost $700 billion and how do we know that the costs will not balloon to much more than this, as happened with the Iraq War?

6) There has been discussion of what is likely to happen if we do nothing, but what are the likely consequences to the economy of the bailout itself? Isn’t it likely that this amount of deficit spending, much of it borrow from overseas, would lead to a fall in the value of the dollar and thus a increase in inflation in the US?

7) How is this going to be paid for? Are there plans to have special taxes targeted at those who benefited most from the Wall Street bubbles, such as one-time tax on capital gains covering the last few years or on financial assets, or a surtax on those with passive incomes of more than $1 million per year?

I do not believe that Congress should agree to any bailout package until these questions are answered.

[annabanana]

1. These are all good and legitimate concerns.

(Don't be afraid of General Discussion. . This would be a good post over there too!)