Economic Solutions: The Light Bulb for Congress


Okay, the boobs in Congress have let another 24 hours pass without any resolution or given any hint that anyone has a bright idea. So, Opie and I are going to take a shot at it. I think that beyond a shadow of a doubt, this is the fault of three entities; 1) Government, this means anyone with the Fed, not just Republican and not just Democrat. 2) Wall Street and their greed. 3) The Americans who had their hands out. Now under our present solution who is going to pay for it? The same people who pay for everything else, the folks who take care of their bills. Opie is going to take on the first part of the necessary solutions.


Unfortunately laissez faire capitalism has run amok, free market anarchy. The Wall Street dumb asses got real rich off our backs and stupidity. Now you have every screaming socialist Nancy Pelosi wannabe yelping about the need to regulate, regulate, regulate. They are partially correct, but common sense should tell you that trying to correct one extreme with another extreme doesn't work. To bad common sense isn't so common. Here is what we propose.

Regulation, Oversight, and Transparency:

Okay stupid, meaning Congress, why are you going to create new regulation when you already have regulatory bodies in place? This is like the idea of immigration reform, we already have the laws in place, no one was enforcing them. So, what is everyone's answer? Let's make new laws and not enforce them, yeah that is really smart.

The two regulatory bodies that need to step up are the SEC and the FTC. Or, combine them into one regulatory agency with the necessary authority to protect the American tax payer's interests. But there are a few areas that could use some regualtion, not much, just a little.

Most companies have a luiqidation problem, meaning they do not have enough physical capital to absorb loses if they require being luiqidated. Basically, they don't have enough money to pay their debts. Regulation in this area may not be bad. You could set up limits for major companies to have to keep a certain amount of capital on hand at all times, just for times like this.

Loan practices also need to be re-thought, this is one area where government intervention is great. Giving out loans like a drunken sailor so you can get a commission is criminal. Set up better qualifications for loans and make these banks adhere to them strictly. Also, keep them in flux so their lawyers cannot come up with game plans to get around them. Alter them every year or two to keep the banks on their toes and honest. This is more of a preventative measure for the future than anything.

But, the biggest problem with all of this is has been the lack of transparency in the market. Oh you mean this just slipped by the bean counters? Yup, there was a gap in the amount of transparency needed to make sound judgements plus the bean counters were asleep at the wheel as they drove us off the cliff. The regulation we really need is shining the light on these Wall Street rats when they are screwing up. If they are, these agencies need the authority to correct it at the lowest levels possible and make it as painful as possible.

But before you go to far with prosecution, let the peasants have a crack at them. With all this transparency there needs to be a way to let the peasants, such as myself, know what is going on with the market. Work it out with the MSM or create a highly publicized website and put this information out there in layman's terms for the everyday working stiff. Citizens Against Government Waste have proven this can be an effective tool, so let's try it out where Wall Street is concerned. Not bad for a peasant, eh? On to CT.


Buy outs by the government and private sectors:

Since the tax payers were complicit in some of this garbage going on there is a need to fork up some of the money for the bailout. But the government needs to be approaching this in an investment frame of mind. A solid shot liquidity into the market is unfortunately needed, but I am doubtful it is the amount necessary that Sec. Paulson has suggested. I would cap it at $250 billion, yup, that's a lot of money, but better than $700 billion. Just consider it an investment if the government is able to turn around and make a profit. And if they do give a dividend check to the American taxpayer when that profit is achieved. I guarantee the public would be more receptive to that idea than just giving up their money.

Now on to the private sectors. Allow the gap to be filled by the private sector. When Merrill-Lynch vaporized BOA was there to pick up the wreckage. Now, we have Wachovia being taken over by CitiGroup. Are you starting to see the pattern? These companies have the capital to absorb these bad loans and possibly make a profit with them at a later date. By allowing the government to absorb some of these "toxic loans" and letting the private sector correct what is left you have struck a balance. Not to mention the new investment potentials.

Tax cuts and spending:

Raising taxes is not even an option right now. Anyone who even suggests it should be removed from the gene pool immediately. Taxes need to be lowered even further as well as government spending. Lowering corporate taxes, personal income taxes, elimination of wind fall profit taxes, etc. will spur savings and eventually investment and spending by consumers. This is absolutely necessary for recovery.

Government spending needs to be curtailed with a serious degree of urgency. Especially if the government is going to be absorbing so much debt. We will cripple the economy beyond repair if we keep going in this direction and it is even more pressing than it was before the bubble burst. If you get the government back into the black and fiscally responsible it will assist in increasing the value of the dollar which can potentially drop the value of our overall debt.

Balance is the key to success through out this whole situation, not anger and partisan bull. We don't need overt government regulation, stimulus packages, or a blame game. We need to work through this with common sense and temperance. I understand that Opie and I are not economists but at least we can see the forest despite the trees.



"The last words on everything."


WASHINGTON - In a bold bid to revive President Bush's multibillion-dollar financial rescue plan, Senate leaders scheduled a vote for Wednesday night on a version of the bill that adds substantial tax cuts meant to appeal to Republicans when it reaches the House. [1]
Maybe they are hacking my computer, lol. But don't get to excited they are only thinking half way smurt.
The gambit is certain to anger some conservative House Democrats, who object to tax cuts that are not offset with spending cuts. [1]
[1] Senate to vote on rescue plan with added tax cut


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