Got an email, with a link of the bill attached, from Bob Williams.
His Analysis:
Bob Williams bailout analysis
Today the bailout bill (HR 1424 senateconservatives.files.wordpress.com ) was signed into law by President Bush. EFF agrees that action was needed to be taken to reassure the markets. However, we proposed free market solutions like exempting capital gains tax for anyone who purchased these troubled assets.
We do not believe this will solve the financial problems facing the country because this bill essentially nationalizes the mortgage market and gives the Secretary of Treasury virtually dictatorial power over much of our economy. It does not address the pubic policy problems which led this crisis—things like government forcing financial institutions to give home loans to people who could not afford the payments.
We are deeply troubled by the intent section of the bailout bill.
The U. S. Constitution clearly says "to protect the general welfare" not to ensure the general welfare. But the purposes of this bailout bill include giving the Secretary of Treasury the authority and such facilities to use in a manner that:
-"protects home values, college funds, retirement accounts, and life savings;.
-"preserve homeownership and promotes jobs and economic growth;
-"maximizes overall returns to the taxpayers of the United States ; and
-"protects public accountability for the exercise of such authority."
The bill reads more like the Communist Manifesto than a free market bill, and I read every word of its 451 pages.
Here is a summary of the bill.
1. It started out as 3 pages and is now 451. (http://senateconservatives.files.wordpress.com/2008/10/ayo08c32_xml.pdf), but only 112 1/2 pages are bailout. the rest is:
· energy improvement pages 112-244
· Broker requirements pages 244-261
· Tax breaks 261-310
-alternative minimum tax relief (sections 101-103 , pages 264-267)
-extend deductibility of state and local sales taxes (section 201, page 267)
-extend deduction of qualified tuition and related expenses (section 202, page 268)
-extend deduction for certain expenses of elementary and secondary school teachers (section 203, page 268)
-extend tax free distributions from IRA plans for charitable purposes to December 31, 2009. (section 205, page 269)
-$18 million in clean energy breaks (includes wave- and-tide electricity generators, fringe benefits for bicycle commuters, etc
-$192 million to cover a rum excise tax with money diverted to Puerto Rico and the Virgin Islands.(section 308, page 279)
- $33 million in economic development funds for small business in American Samoa . (section 309, page 279)
-$4 million in tax credits for mine rescue team training. (section 310, page 280)
-$? million in expensing advanced mine safety equipment (section 311, page 280)
-$? million in Domestic production activities in Puerto Rico (section 312, page 280)
-$119-205 million in tax credits for business that employ American Indians who live on reservations and accelerated depreciation for property used on reservations (sections 314 and 315, page 288)
-$? million railroad track maintenance. (section 316, page 289)
-$331 million seven-year-cost-recovery period for land improvement at motorsport racetracks. (section 317, page 290)
-$? million in tax incentives to invest in the District of Columbia (section, 322, page 291)
-$? million in enhanced charitable deductions for contributions of food inventory (section 323, page 293)
-$148 million reduction of wool fabric import tariffs to the Wool Trust Fund to promote American wool competitiveness (section 325, page 295)
-$397 million deduction for domestic projects for film and television productions (section 502, page 298)
-$6 million for exemption from excise tax for certain wooden arrows designed for use by children (section 503, page 300)
-$223 million in payouts to fishermen who received payments for the 1989 Exxon Valdez incident (Section 504, pages 301-307)
-Mental health parity which will cost $3.8 billion over the next five years and will result in more uninsured people because mental health coverage will now be included in all health care plans - pages 310-344
-Rural schools - pages 344-394
-Disaster relief-pages 394-451
-"Spending reductions [I can’t find them!] and appropriate revenue raisers for new tax relief policy"
-correct title of bill page 451
2. Notice this is a "mental health" and "substance-related disorder" bill that had the bailout added to it.
3. President Bush, on October 1, told us not to worry because it is not really $700 billion. It is only $250 billion to start and then the Treasury can ask him for another $100 billion and, if needed, go back to the Congress for the remaining $350 billion.
SO WHY IS THE DEBT LIMIT RAISED BY another $700 billion, which is in addition to the $800 billion increase in July. (SECTION 122, PAGE 68 ) .
4. The underlying assets involved do not even have to be in the United States ! Here is the definition of a "troubled asset,” right from the bill:(Section 3(9). This permits the Secretary of Treasury to bail out foreign investors.
"(9) TROUBLED ASSETS. The term ‘‘troubled assets’’ means (A) residential or commercial mortgages and any securities, obligations, or other instruments that are based on or related to such mortgages, that in each case was originated or issued on or before March 14, 2008, the purchase of which the Secretary determines promotes financial market stability;
and (B) any other financial instrument that the Secretary, after consultation with the Chairman of the Board of Governors of the Federal Reserve System, determines the purchase of which is necessary to promote financial market stability, but only upon transmittal of such determination, in writing, to the appropriate committees of Congress."
Note: conspicuously missing from the definition is the requirement that the asset's underlying thing (that is, the property that was mortgaged, etc) lies within the United States . Also note that Treasury must tell Congress if they add "new types" of debt, but that Congress has no right of review or censure.
5. The bill authorizes the government to renegotiate loans for people who can't afford them! The government can reduce the interest rates; reduce the loan principal; and do other similar modifications. (Section 110, pages 27-29). Think of the difficulty of implementing this without fraud taking place.
What a socialist grab. Whoever is elected /re-elected next month will have the most sweeping authority and virtually unlimited resources to spend to have their way with the economic course in American History. Private enterprise as we call it will be less free than ever, and ownership as we know it will erode as the possibility for politically manipulated transfer of wealth is embraced as the "finest hour" when the US Senate and US House came together to fix this problem.
Bob Williams |
