by Mike Stathis
For many years now we've all seen the reckless use of taxpayer funds by Washington . This irresponsible and unaccountable waste of tax dollars has been particularly prominent during President Bush's tenure - from billions going to blow up bridges, roads and buildings in Iraq , only to rebuild them - to the Department of Homeland Security, which is no more than a joke. Meanwhile, America 's own infrastructure is in badly need of repair, with current estimates anywhere between $1.5 to $3 trillion and growing each day.
Has anyone asked where this money is going to come from? I guess it seems like a trivial issue given the current problems. But it's going to be a huge problem in the not-so-distant future. My guess is that Washington 's inability to pay for these repairs will ultimately lead to the privatization of the transportation department, prison system and many more services expected by taxpayers. Of course Washington will spread the myth that “we will have much better roads and bridges and a more efficient prison system when they are under the control of the free markets.” Sure we will, just like what the “free markets” have done to the energy, healthcare and financial industries. It's going to represent another gravy train for those involved.
We've also seen the absence of any accountability whatsoever from Halliburton's fraudulent activities in Iraq , www.halliburtonwatch.org not to mention hundreds of government contracts automatically awarded to Halliburton uncontested. Perhaps, it is only a mere coincidence that Vice President Dick Cheney was the former CEO of the company. Of course, this is old news but it is a reminder that these issues remain unchallenged. And we should not forget. We should demand an immediate resolution and prosecution of all who have defrauded taxpayers.
to FEMA http://www.fbi.gov/katrina.htm
http://www.msnbc.msn.com/id/11278238/ and the Department of Defense, which cannot account for over $3.3 trillion taxpayer dollars. http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2003/05/18/MN251738.DTL
It's easy to forget so many of the devious and fraudulent activities of Washington , corporate America and Wall Street. When the media isn't distracting you with Britney Spears, Paris Hilton, Hannah Montana and O.J. Simpson, they are broadcasting shills and morons who lie about the real situation in the economy. Combine these smoke signals with the fact that Americans are struggling more than any time in at least the past three decades, and it's easy for people to forget the source of the abuse. I'm here to remind you.
Still, the abuse continues, from virtually every major drug company defrauding Medicare and Medicaid of billions, HMOs gauging prices and refusing coverage while employers shift higher costs to employees, CEOs destroying companies and leaving with dynasties, while the most fortunate segment of the working class continues the Bush-era trend of benefit cuts and no wage growth, while struggling to pay for food, gas and healthcare. Others have lost their jobs as corporations dump them for the cheap labor created by unfair free trade policies endorsed by Washington .
But taxpayers have even more pain to endure. It's now official. If you are a taxpayer, you are now an investor in the insurance, banking and mortgage industries. But you don't own profitable businesses. You own their worst debt – junk bonds. Washington has engaged in the biggest bailout of private industry in history and you can bet it's not over yet. Do you really think taxpayers are on the hook for only $25 billion for the Fannie-Freddie bailout and $85 billion for AIG? Multiply that times 4 or 5 and you get a more realistic number, although conservative number.
And for all of those “buyouts” you are hearing about, they aren't really buyouts. As I mentioned in a previous article, they are really bailouts disguised as buyouts. Why do I say this? Well, consider that the Fed is providing the banking cartel (not the mid or small banks, just the big guys who own them) with $200 billion each month from America 's best Treasury securities in exchange for “investment-grade” debt, including mortgage debt. However, ask yourself who was responsible for rating this debt investment grade. Might it be the same credit agencies that once placed AAA ratings on mortgage debt that are now junk bonds? Of course.
Instead of shuttling your tax dollars into solid investments, they have been handed out to companies on the verge of collapse. In exchange for your tax dollars, you get bonds that are likely to turn into junk. But Washington is not finished. The U.S. Treasury is now proposing a complete bailout of the entire financial system by creating the Resolution Trust Corporation as it did in the 1980s as a result of the Savings and Loan crisis. This will be an official exchange of taxpayer dollars for the entire pool of junk bonds held by the financial and mortgage industries. While the official approval has not yet come, I am certain it's on the way. You can easily count on another $500 billion of junk being exchanged for taxpayer Treasuries.
As well, understand that corporate defaults will soar even further, creating a huge junk bond market. And much of that junk is likely to be held by the U.S. Treasury. Once again, as I have been saying for months now, I can guarantee you corporate earnings are going to meltdown and corporate defaults are going to soar, causing a massive junk bond market, so get ready. But that's only the tip of the iceberg. Once defaults spiral out of control we are likely to see the implosion of the $65 trillion Credit Default Swaps market.
What kind of bozos are running this country? America can't even manage it's huge annual deficits. The national debt is already $10 trillion. The entitlements programs over the next few decades is in deficit by up to $71 trillion (in present day dollars), the Iraq War is expected to cost taxpayers a total of over $3 trillion, $3.3 trillion is missing and another $3 trillion is needed to repair the nation's infrastructure. And now taxpayers are on the hook for the mistakes of the world's largest insurance and mortgage companies and the worst junk held by the financial industry? The Fed has already loaned the banks over $1 trillion! Good God. This is indeed America 's Financial Apocalypse unfolding before your very eyes.
We are seeing the beginnings of America 's permanent collapse. There is no way America will ever rebound from the reckless actions of the Fed, the U.S. Treasury and Washington. That I will guarantee. You might not feel the full effects now or even next year. But I can guarantee you this is going to go down in history as the straw that broke America 's back. These clowns in Washington don't care about tomorrow. All they're concerned with is today. That same mentality is precisely the reason why America has been on a collision course with disaster for many years.
Even if these investments pan out do you really think you will benefit? Even if these companies made a turnaround in a few years, if you are expecting some type of tax rebate as a return on this investment you are dreaming. Sure, Washington will tell you that these companies will turn around. They will tell you that this will be a great investment and you will be rewarded with tax cuts. Think again. The only winners in this massive socialistic bailout will be the banks and the CEOs who will escape criminal prosecution.
My advice to those of you with children is to start looking to move to Asia, Latin America or Europe because America 's future doesn't look good. Unless you are wealthy, your children don't stand much of a chance to live the American Dream. Even I never would have predicted things to turn out this bad, and everyone was calling me a doom and gloomer and a nut two years ago when I predicted the collapse of Fannie, Freddie, the banks housing prices to decline by 30%, and the stock market to collapse.
More Soft Talk
The reality is even if these risky investments pan out, you can be assured the money will be squandered by Washington . I'm still waiting to see what happened to that $3.3 trillion the Department of Defense can't find and the billions missing in Iraq . If I was president of the United States you had better believe heads would roll. I wouldn't propose some preposterous firing of SEC Chairman Cox, as McCain has. Cox should be sent to prison, as should many CEOs and other principals in this catastrophe. White collar crime in is by far the most under-prosecuted crime in America, especially when it involves Wall Street, big shots, CEOs, and other wealthy businessmen.
Despite the fraud, Washington puppets and CEOs remain above the law, which very rarely leads to real penalties for those most responsible for the destruction. McCain latest attempts to show he means business give you an idea what he plans. “Honest people on Wall Street, and there are many, will have a friend in the White House when I am president.” Yea, okay…like a secret fraternity handshake, what he means is….“Guys I'm on your side; don't worry, it'll be business as usual if you elect me.” There are “many honest people on Wall Street”? How would he know? Has McCain worked on Wall Street? Maybe McCain is defining honest using his own standards, which appear to be quite low. I worked on Wall Street, and I'll tell you right now - they're all crooks; well 99% of them anyway. That's precisely why I left. As a former Wall Street colleague once told me, “If you have a brain and a conscious you don't stay in this business (Wall Street).”
Why can't Obama be a man and just say it – America 's free market economy is broken and badly need of repair. Instead, he points out the problem but stays clear of any solutions. "Let's be clear," he said, "what we've seen the last few days is nothing less than the final verdict on an economic philosophy that has completely failed."
As far as I'm concerned, anyone who doesn't conduct a full investigation of this charade leading to several CEOs and other executives in prison with all of their assets being shuttled into America's bailout fund doesn't have what it takes to lead America anywhere except on its current course – downward. But it doesn't really matter at this point anyway. Washington and the greedy bankers have ensured the end of what was once a great and proud nation filled with hope and opportunity.--MORE--"