No Bail Out Act - Peter DeFazio, Marcy Kaptur Introduce Better Bail Out Bill!

I wrote up a blog post over on The Economic Populist covering as much information as I could find on the Peter DeFazio alternative bail out bill. The press conference video is there also.

It looks like a much better plan and also shows this $700B of taxpayer money is really not necessary.

raw link:

http://www.economicpopulist.org/?q=content/house-progressives-introduce-their-own-bail-out-bill

it's a glorified loan but first the FDIC is making sure they can really pay the money back and even more importantly it's kind of like fake money that goes into the accounting methods which increases capital but isn't "real money".

They cover over a lot of the details in the blog piece and the most important thing is this is how they handled the S&L crisis and it worked quite well.

I could say buying the mortgages won't cost anything because most of them will pay their mortgages. We're supposed to make money form them, remember?

How Much?

And while all these new measures are put into place, the Fed can guarantee the liquidity of the credit market so we don't have to hear the dire predictions about not getting paid and businesses closing for lack of capital.

they are trying to scare the shit out of people to pass this bad, bad bill, which makes ya really wonder what kind of hoodwinking is this.

I agree, they should truly try what has worked in the past in other nations, what is recommended by experts and it appears both the Progressives and Conservatives are cobbling together precisely that.

Thank god we have a few who are not so corrupt (whether you agree with them or not, I'm starting to feel not corrupt is the key element!)

which is highlighted in the post. That's the point, this can be done with zero cost to taxpayers.

It takes money to loan money. How Much?

in a comment. May I suggest reading the post and then looking up what you do not understand and researching the topic.

"The current budget proposal requests authorizations of $17.5 billion for the 7(a) program, $7.5 billion for the 504 program, $3.0 billion for the SBIC debenture program, and $25 million for the Microloan program, he noted."

These are loans that theoretically will all be paid back. But before the loans are made, they have to be budgeted and requested.

The $700 billion will theoretically be paid back as well. It is currently being budgeted and requested.

How Much needs to be budgeted and requested for this loan program? It's a simple question.

There are other key provisions but this is the way that will insure that the taxpayer won't end up holding the bag. It just means, as I understand it, that there will again be a tax on each transaction on Wall Street, a tiny percentage of the stock treansaction but because of the huge number of transactions in the end it amounts to a lot of money, about $100B a year or more depending on how much the tax is.

This is a common sense way to pay for the "loan." It insures that the taxpayer won't be charged. It makes Wall Street pay for its own loan over time, and not a long time either.

The other provisions make good sense too.

They want a handout of $700 billion when, instead, we should be offering loans for liquidity.

What is it about that that people refuse to accept. If the bad debts are bad for the government, why would you loan money to the people carrying those bad debts. The financial institutions aren't in any better economic standing, their balance sheets are actually loaded up with MORE debt. It really doesn't make sense.

I'd really like to see this get some media traction, but it won't unless the blogosphere makes it happen.

You can either rewrite it or link over to the House site or link to our site to get the word out.

They are trying to ramrod the bad bill down the Senate tomorrow and if people realize there is a better way they won't be so terrified into not being outraged on what is going on.

Please help spread the word this bill exists and help promote these alternative and better methods to address the credit crisis.

DeFazio's a good man.

Does Obama know about this? Why isn't he backing these folks? This sounds like such a reasoned response rather than letting Bushco loot the treasury on his way out the door.

Why is Obama backing a bail out plan most economists say won't work and many suspect is simply a method to save share holder value and Executives (the super rich).

Especially points 1 & 5.

I dream of the day when liberal and conservative populists can band together to pass progressive economic legislation like this. It might send Wall Street the message they are no longer our masters.

There are some intersection points between Progressives and Conservatives and it's pretty clear constituents don't want this bill but they also want them to act immediately to loosen up the credit crunch, which actually could be done with many different methods.

The media spin is just unbelievable how "only the Paulson" plan will solve this...it's absurd, many have said it won't work so you're going to cough up $700B dollars on something that is not even believed to work?

that's just nuts.

and now the Senate is trying to shove it through? Why? Why not just immediately pass something that either has been proven to work or that the economists/experts all agree will work.

The Senate should be ashamed, they are trying to ram this their "Paulson plan" through tomorrow.

And caught part of the press conference, but of course MSNBC cut away from it and CNN wasn't coverint it and I only get CPAN 1 and it wasn't on there either.

I'll check it out on your post. Thanks for the link and the effort!

http://www.afterdowningstreet.org/node/36453

ACTION ALERT: A Sensible Plan for Recovery
Submitted by davidswanson on Tue, 2008-09-30 15:56. Activism
WE WANT A NO VOTE ON PAULSON'S PLUNDER OR A YES VOTE ON THIS:

Key Program:
A Stimulus for Main Street –Aid to the Real Economy
Make Wall Street Speculators Pay for the Bailout –No More Debt
Shut down the Casino: Rein in the Unregulated Financial Sector
Limits on CEO pay and Prohibitions on Profiteering from the Bailout

The grassroots blowback against the Bush Administration’s proposed Wall Street bailout is rooted in deep distrust. The following is a simple program that should be incorporated into the current bailout proposal to address the root causes of our problem and restore trust and confidence in our economic system.

1. A Stimulus For Main Street
A $200 billion “Main Street Stimulus Package” could bolster the real economy and those left vulnerable by the sub-prime mortgage meltdown. This package should include investment in renewable energy infrastructure, help to distressed homeowners and federal aid to the states. See the terms of the $56.2 billion proposed Economic Recovery Package proposed by Senators Reid and Byrd.

2. Make Wall Street Speculators Pay for the Bailout
Congress must make the speculators pay for the mess they created. Progressives have put forward $900 billion in revenue. http://www.ips-dc.org/articles/740. This includes a Securities Transaction Tax ($100 Billion); a Corporate Minimum Income Tax ($60 Billion); a ‘Disgorgement’ recovery from profligate CEOs ($40 Billion).

3. Shut Down the Casino: Assert oversight of Financial Markets
Shutting down the casino would include reregulation of the financial sector with new oversight authority and extending oversight to hedge funds and other unregulated financial instruments.

4. Limits on Excessive CEO Pay and Prohibitions on Profiteering from Bailout
Putting limits on CEO pay removes one of the incentives that drove the short-term “casino” mentality in corporate America. Private firms involved in the bailout should be subject to strict controls and conflict-of-interest oversight to prevent profiteering at taxpayer’s expense.

ACTION
Educate Congressional Members. We should immediately contact our members of Congress, whether they voted for or against the bailout, and urge them to embrace this program:

Engage Local Media. Influence the Conversation. We should write letters to the editor, call in to talk radio programs, put forward op-eds.

The issue is the lobbyists are threatening "Economic Armageddon" if they don't pass it..

so the key is to get the Senate to pass an immediate and real solution instead.

Those are more long term issues but they need to immediately address the credit crunch, which other economists are saying can be done much more smartly.

The lobbyists are going to use a stock market panic to demand this turkey be passed (as well as threatening Congress with their corporate campaign contributions and control over the media against them).