Even more telling, the bipartisan Congressional "leaders" most responsible for pushing the bailout through Congress, Senators Dodd and Gregg and Representatives Frank and Blunt have taken almost $20 million from Wall Street sources during the last 20 years. Dodd recently received $6 million in contributions during his presidential primary campaign, and Frank has collected $720,000 this year.
Other key players also have been well compensated this year: Congressman Kanjorski received $755,000 and Congressman Bachus banked $704,000.
Who Loses?
The ordinary, hard-working voters, who were opposed to the bailout, and their children and grandchildren, will be the ones who will ultimately have to repay, with compound interest, the money that will have to be borrowed to give away to Wall Street bankers.
The bailout was "sweetened" in the Senate by another $110 billion in tax relief and renewable energy incentives to get enough House votes for passage; however, only the temporary one-year slowdown of the Alternative Minimum Tax offered any succor to the middle-class workers affected by it.
The bailout raises the debt ceiling to $11.3 trillion, or about $37,524 for each man, woman and child in the United States. How is this burden ever going to be repaid? Workers already know their wages are falling, their jobs are at risk, their health care, food and fuel costs are skyrocketing, and they are being kicked out of their apartments and homes because they can’t pay the rents and mortgages.
Didn’t each member of Congress have a sworn duty to rescue the millions of Americans suffering from the reckless gambling of Wall Street moguls, rather than to reward an obscene excess of greed?
Foreclosure Rescue. At least six million homeowners will probably default on their mortgages this year and next, and millions more will have their equity wiped out by declining property values. More than 770,000 homes have been seized by lenders since 2007, and 91,000 families were just kicked out of their homes in August.
These American homeowners were betrayed by their elected representatives!
The only provision in the bailout legislation to remotely "benefit" homeowners whose homes are being foreclosed upon only "encourages" mortgage service companies to modify mortgages. Paulson is required to "maximize assistance for homeowners ... and minimize foreclosures"; however, he also has to ensure that the government doesn’t incur any additional costs. Thus, there’s little or no hope of any meaningful benefit to distressed homeowners resulting from the bailout.
The legislation could have required the government to directly purchase the defaulting mortgages and to adjust them to the reduced value of the property, as was done in the Great Depression. Instead, Paulson is authorized to purchase the complex derivatives (Wall Street’s gambling debts) piled on top of the original mortgages. The difference is whether homeowners or Wall Street receives the benefit of the bailout.
Bankruptcy Rescue. More than 4,476 Americans filed for bankruptcy every day during August, the highest number since changes in the law in 2005 made it much more difficult, and even impossible in many cases, to obtain debt relief. More than a million, increasingly elderly, people will petition for bankruptcy this year.
These destitute Americans were betrayed by their elected representatives!
Under the current law, bankruptcy judges do not have the power to modify mortgages of a petitioner’s primary residence, irrespective of how the mortgages have been sliced, diced and repackaged. The bailout could have provided judges with the authority, in appropriate cases, to adjust the amount secured by the mortgage to the value of the property and to adjust the interest rate to a reasonable percentage.
Unemployment Rescue. New claims for unemployment benefits rose to 493,000 last week, the highest level in seven years. The economy has already lost 605,000 jobs thus far this year, and it dumped 159,000 payroll jobs just during September, the greatest drop in five years.
These unemployed Americans were betrayed by their elected representatives!
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