Of course, this front page story on a Sunday isn't exactly news, either.
Also see: Bush Staying in Office Even if He Leaves
Bush's Bailout to Raise Taxes, Slash Services
Ah, the sweet smell of a Sunday agenda-pushing MSM War Daily.
"Bailout to swell debt, hit taxpayers; Analysts say hikes almost inevitable" by Robert Gavin, Globe Staff | October 19, 2008
The shape and scope of the Wall Street bailout is finally clear, but a big question remains: How will we pay for it?
Yeah, the shape and scope is Paulson handing out billions to his friends!
And whose "we," elite scribe?
Propping up the US financial system will require the federal government to borrow hundreds of billions of dollars, adding to a ballooning deficit that will hamstring the next president and eventually require Americans to pay higher taxes, analysts said.
The deficit was already set to soar as tax collections plunge in the face of a likely recession. But the cost of bailing out financial firms, plus an economic stimulus package promised by congressional leaders, could send the national debt to levels not seen since the Reagan administration, analysts said. Economists forecast the deficit will top $700 billion in the current fiscal year, which began Oct. 1, up from about $450 billion the previous year.
He's bankrupted our nation, first with war looting and now with the bailout looting!
It's not going to get better in the next fiscal year, either. Over the next two years alone, the government will probably have to borrow some $1.5 trillion to keep operating, adding to a national debt that now tops $10 trillion, analysts said. Meanwhile, the government - and taxpayers - face huge increases in the costs of Social Security and Medicare, the healthcare program for the elderly, as some 78 million baby boomers begin retiring over the next few years.
"When you start looking at the trajectory of the deficit and the debt, whoever is elected the next president will be handcuffed," said Rudolph Penner, senior fellow at the Urban Institute, a Washington, D.C., think tank. "Taxes almost certainly have to go up at some point."
All over something that DID NOT HELP YOU AT ALL, Amurka!
It's generally viewed as appropriate to increase government spending and deficits to help the nation avoid, moderate, or rebound from recessions, but running such big deficits over the long term poses several risks to the economy, analysts said.
First, the massive borrowing needed to finance big deficits year after year can siphon away capital that companies need to grow, as investors buy government, rather than privately-issued, securities. When the government borrows, it sells securities that compete with private offerings for investor dollars. In addition, as debt markets become flooded with US securities such as Treasury bills, the government may need to pay higher interest rates to attract enough buyers.
That would mean higher rates for mortgages and other loans, which are frequently tied to Treasury bill rates, and ultimately, slower economic growth. Finally, it would make the nation and the economy more dependent on foreign governments and investors, who already finance a large share of US debt.
Isn't that an odd coincidence -- or is it a coincidence at all?
It's still unclear how much the financial bailout will cost in the long run, but most analysts expect it to end up substantially less than the initial outlay of up to $700 billion. Once the financial system regains its health, the government can sell the assets it will purchase under the bailout, including bank shares and mortgage-backed securities held by financial firms, to recoup costs. Other countries, such as Sweden, have undertaken similar bailouts of banking systems, and recovered about two-thirds of the initial costs, analysts said.
In the short term, however, the bailout will boost the deficit significantly. Global Insight, a Waltham forecasting firm, estimated the bailout plan will account for slightly more than half of the $300 billion projected increase in the deficit this year.
Tax increases, which can slow economic growth, probably wouldn't come until the economy recovers, which could take a few years. But they are coming, many analysts predict.
So in the long run, the bailout hurts us!
"We have a deficit that is big, and was already getting bigger, even before this bailout," said Nariman Behravesh, chief economist at Global Insight. "One way or another, taxes have got to go up." --more--"
Haven't you PAID ENOUGH, Amurkns?
When does the ROBBERY END?