Bailout Scam Exposed

Federal Debt Relief System is at the forefront in the battle to restore the Constitution by arming millions with the sobering information and vital education designed to liberate the multi million debt slaves all over this nation.

Federal Debt Relief System wants to know 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?

• 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?

• The U.S. Treasury Department could end up in control of our banking system. Considering how well they run the government’s fiscal house, is that what we want?

• 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 a hotel 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-value – mark-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., Lehman Brothers Holdings Inc., and American International Group. It’s the same SEC that eliminated the uptick 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.

The Federal Debt Relief System is dedicated to sounding the alarm while there is still time to do something about it.

Learn more at Federal Debt Relief System now.