by Mark Scheinbaum
American Reporter Correspondent
October 9, 2008
A FINANCIAL PRESCRIPTION FOR THE GLOBE
BRADENTON, Fla., Oct. 2, 2008 -- With $700 billion dollars - about $2,400 for every man woman and child in America - Congress has just about paid back all those American and foreign banks for every bad loan they've ever made. All those credit card debts that people didn't feel like paying will soon be paid for by taxpayer money, courtesy of Congress. So why not let them pay our bills, too?
Tell me why millions of people who took loans and didn't pay them back should have them purchased and paid for by the government, while my loans, which burden me enormously and are driving me towards bankruptcy, should not also be purchased by the Federal Reserve or the U.S. Treasury?
Did I not lie enough? Was I at fault for not taking a no-money-down, no-reportable-income Adjusted Rate Mortgage (ARM) like millions of other people did (I was offered $280,000)? What is it that I have done that makes me deserve years of paying off my loans while all those other 10 million folks like me don't pay anything at all on theirs?
Why is a bank more important than its depositors? If the $700 billion was distributed to all of us, the banks would get the same infusion of cash deposits without our growing the national debt, and that would melt the credit freeze overnight - they'd have billions to lend again, and there wouldn't be just three or four of them. And we'd save our homes and families from foreclosure and bad credit ratings, too. If the special income was also taxed, the government would quickly get a lot of it back.
There's a practice in some churches of reverse collections. The pastor fills the collection box with money and tells his congregants to take all they want - just try to return more than they took a year from now. Could the United States ever trust its own people to do the same? If it believed in us, it could.
Last night, Sen. Barack Obama spoke to the U.S. Senate before the bailout legislation was voted upon, and he quoted a statement in the first Fireside Chat of President Franklin Delano Roosevelt during the Great Depression. The most important measure of the economy, FDR said, was the confidence of the people.
How confident can people be about a United States Senate that empowers the Bush Administration - a den of notorious liars, I'm sorry to say - to buy $700 billion of toxic debt from people who broke every acccounting rule and a lot of banking laws in piling up the vast debts they now owe? Not much.
Let me tell you as little story. I am a Christian man, a good Catholic, and I believe in trying to help others who are in trouble. I became fond of a particular bagel shop in Palmetto, Fla., called Morty's Bagel's, run by a man named Tim Odea and his Peruvian wife, Andrea Pacheco. I ate there often, sent others there, and loved the cookies and bagels, even if I was only able to get there once or twice a week.
One day Tim called me early in the morning and told me that his landlord was ready to throw him out if he didn't give him $5,000. Could I loan it to him? Sure, I said. I went and sold some stock I'd hoped to profit on - and I missed a big upwards move - and gave him the money on a simple signature. He was supposed to pay me $500 in interest and return the money in a week. He paid me back $2,800, pretty slowly, and then after two months or so stopped paying after he got refinancing for his home. He said his wife was angry that I had called and demanded my money back
Well, where was the Federal Reserve? Where was the U.S. Treasury? Where were Barack Obama and John McCain? Where were President Bush and Henry Paulson? I am still holding Tim's piece of paper - aren't they going to bail me out?
Meanwhile, I'm doing my best to bail out Washington Mutual. Unswayed by the generosity of my friends in Congress in selling them to JPMorganChaseWashingtonMutual, they charged me $35 for a $15 overlimit amount and $35 for a late payment fee when I couldn't come up with the quadruple payment they wanted. They went out of business with the FDIC's help. Why didn't Harry Reid and Mitch McConnell rush to my rescue? What am I, chopped liver?
Well, now I've got a better idea. All these banks are getting paid by the U.S. Treasury for their bad loans - so why not let them have mine? All I need to do is quit paying them, and the government will buy them from the banks and hold them for a few years and then sell them to some poor sucker who thinks they'll somehow be made good by a legion of bill collectors.
I tell you, bill collection is the growth industry of the future. All we need now is some hacker who figure out how to kill their telephone lines whenever the collectors call, and the whole megillah (that's Yiddish for a big mess) will be over.
You'll be helping out the banks, really, because your bad loans will be snapped up by the Federal Reserve at its "open window," where the banks will come to borrow against those worthless assets for a fraction of what another bank would charge for a loan, or sell them at top dollar for hard cash to taxpayers for money that they then can loan to us at extremely high rates, given the new credit environment. In fact, it may be unpatriotic to pay your bills when banks can factor them for far more than they're worth. They can sell your sow's ear to the Fed at the price of a silk purse.
As Sen. Richard Shelby said of the bailout plan last night, "The taxpayer will lose both coming and going."
So let Congress pay your bills along with everyone else's. Why should you pay when tens of millions of people don't, and taxpayers pick up the tab? That's a sucker's play seven days a week.
Like someone (maybe me) said, Wall Street went to the party, and America picked up the bill.
Here's Macy's, Best Buy, Target and Sears and half a dozen others picking the carcass of my life savings with interest rates anywhere from 22 to 31 percent, and here's the banks that own all that debt - the aforementioned JPMorganChaseWashingtonMutual, CitigroupWachovia and BankamericaCountrywideMerrillLynch, all going to the Federal Reserve to borrow tens of billions at $1.75 per $100, and turning around and charging me $20 per $100 for money they got from my taxes! That way, they can spend $2 of my $20 on bill collectors to get their money back if the need arises. Call my cellular - it's already $560 deep.
Yet if I don't pay, the government pays for me, from my taxes. Then they loan it back to me again? Or what? Or they loan it to the next guy who takes this sucker play.
They give $85 billion to the gents who own AIG, who make it impossible for me to rent a hall for a wedding because they want so much money for insurance. They wouldn't exist if it weren't for my money, yet they charge me an arm and a leg to drive around the block, to keep my house from flood, fire and hurricane, to let me walk down the street of any town or city and state in the country. I couldn't walk down those streets if those places didn't have insurance should I trip and fall. But I'm paying for the insurance, and collecting my own money when I trip and fall!
Let the government pay my insurance bill. Let them pay my credit card bills. Let them make Tim Odea's loan good. Let them pay me.
Either that or vote down this bailout, and let the chips fall where they may. Don't worry about our payroll, Mr. McCain. Tomorrow, I'll still have the job I have today, which is to say, none. The lights?
Let Congress pay the bill.
Joe Shea is Editor-in-Chief and founder of The American Reporter. the world's first original Internet-based wire service, newspaper and blog, founded April 10, 1995.