Archive for September 27th, 2008

By Megan McGinley

While Secretary of State (***As we proof-read this article, this mistake got past us. We know, as does the author, that Henry Paulson is Secretary of the Treasury. Condolezza Rice is Secretary of State. Sorry for the upset and inconvenience this seems to have caused many of you. It does amaze us that the uproar is over this mistake and NOT the $700,000,000,000.***) Hank Paulson pushes for the government to issue a $700 billion bailout, most of us in the media are still trying to comprehend just what that sum translates into.

For a better perspective on just how massive this bailout really is, check out Zephyr Teachout’s post yesterday on techPresident:

It is $140 billion more than has been spent on the Iraq war since the invasion.

It is $120 billion more than that spent on Social Security benefits.

It is almost 3 billion nonrefundable bus fares from Durham to San Francisco, leaving tomorrow.

It is nine times the amount spent on education in 2007.

It could pay for 2,000 McDonalds apple pies for every single American.

That’s a lot of pie. Here are some more numbers that we came up with to help you wrap your head around how much money $700 billion really is:

– It would reimburse banks, home owners, and local governments for nearly 9 million foreclosures
– It could prevent over 200 million foreclosures
– It could buy 8.6 billion monthly Metrocards
– The government could rebuild Katrina-ravished New Orleans and Gulf Coast … three and a half times
– Roughly 538 Yankee Stadiums could be built
– 5.4 million students could be sent to a public university
– It equals nearly 520 times the amount of Amtrak’s current operating budget
– It is $14 billion more than the U.S. spent during the Vietnam War

“If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them (around the banks), will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered.” –
Thomas Jefferson


I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing
power should be taken from the banks and restored to the people, to whom it properly belongs.

—Thomas Jefferson, 1802

“Paper is poverty,… it is only the ghost of money, and not money itself.” –Thomas Jefferson to Edward Carrington, 1788.

“Experience has proved to us that a dollar of silver disappears for every dollar of paper emitted.” -Thomas Jefferson to James Monroe, 1791.

“The trifling economy of paper, as a cheaper medium, or its convenience for transmission, weighs nothing in opposition to the advantages of the precious metals… it is liable to be abused, has been, is, and forever will be abused, in every country in which it is permitted.”–Thomas Jefferson to John W. Eppes, 1813.

“Scenes are now to take place as will open the eyes of credulity and of insanity itself, to the dangers of a paper medium abandoned to the discretion of avarice and of swindlers.” –Thomas Jefferson to Thomas Cooper, 1814.

“It is a cruel thought, that, when we feel ourselves standing on the firmest ground in every respect, the cursed arts of our secret enemies, combining with other causes, should effect, by depreciating our money, what the open arms of a powerful enemy could not.” –Thomas Jefferson to Richard Henry Lee, 1779.

“We should try whether the prodigal might not be restrained from taking on credit the gewgaw held out to him in one hand, by seeing the keys of a prison in the other.” –Thomas Jefferson to Thomas Pleasants, 1786.

“That we are overdone with banking institutions which have banished the precious metals and substituted a more fluctuating and unsafe medium, that these have withdrawn capital from useful improvements and employments to nourish idleness, that the wars of the world have swollen our commerce beyond the wholesome limits of exchanging our own productions for our own wants, and that, for the emolument of a small proportion of our society who prefer these demoralizing pursuits to labors useful to the whole,
the peace of the whole is endangered and all our present difficulties produced, are evils more easily to be deplored than remedied.” –Thomas Jefferson to Abbe Salimankis, 1810.

“The banks… have the regulation of the safety-valves of our fortunes, and…condense and explode them at their will.” –Thomas Jefferson to John Adams, 1819.

“I sincerely believe… that banking establishments are more dangerous than standing armies, and that the principle of spending money to be paid by posterity under the name of funding is but swindling futurity on a large scale.” –Thomas Jefferson to John Taylor, 1816.

“The incorporation of a bank and the powers assumed [by legislation doing so] have not, in my opinion, been delegated to the United States by the Constitution. They are not among the powers specially enumerated.” –Thomas Jefferson: Opinion on Bank, 1791.

“It has always been denied by the republican party in this country, that the Constitution had given the power of incorporation to Congress. On the establishment of the Bank of the United States, this was the great ground on which that establishment was combated; and the party prevailing supported it only on the argument of its being an incident to the power given them for raising money.” –Thomas Jefferson
to Dr. Maese, 1809.

“[The] Bank of the United States… is one of the most deadly hostility existing, against the principles and form of our Constitution… An institution like this, penetrating by its branches every part of the Union, acting by command and in phalanx, may, in a critical moment, upset the government. I deem no government safe which is under the vassalage of any self-constituted authorities, or any other authority
than that of the nation, or its regular functionaries. What an obstruction could not this bank of the United States, with all its branch banks, be in time of war! It might dictate to us the peace we should accept, or withdraw its aids. Ought we then to give further growth to an institution so powerful, so hostile?” –Thomas Jefferson to Albert Gallatin, 1803.

“If the debt which the banking companies owe be a blessing to anybody, it is to themselves alone, who are realizing a solid interest of eight or ten per cent on it. As to the public, these companies have banished all our gold and silver medium, which, before their institution, we had without interest, which never could have perished in our hands, and would have been our salvation now in the hour of war; instead of which they have given us two hundred million of froth and bubble, on which we are to pay them heavy interest, until it shall vanish into air… We are warranted, then, in affirming that this parody on the principle of ‘a public debt being a public blessing,’ and its mutation into the blessing of private instead of public debts, is as ridiculous as the original principle itself. In both cases, the truth is, that capital may be produced by industry, and accumulated by economy; but jugglers only will propose to create it by legerdemain tricks with paper.” –Thomas Jefferson to John W. Eppes, 1813.

These international “banksters” finally succeeded in 1913 with the passage of the Federal Reserve Act. This bill, previously orchestrated by Nelson Aldrich, was soundly defeated under President Taft. In order to defeat Taft, the banking community backed Woodrow Wilson, and, to ensure his victory, encouraged ex- President Teddy Roosevelt to run again in order to siphon votes from the popular Taft. Wilson won by 42%, then slipped the Act through a bare quorum of Congress on December 23, 1913 after most of the opposition had gone home for the holidays.

Here’s a plan that would save taxpayers $700Billion – and save people’s homes. Perhaps, as the writer says, it’s too simple.

“I have been following the economy and politics very carefully for the last 25 years. I believe I have a better solution to the mortgage crisis than any I have heard or read thus far. The beauty is in it’s simplicity. Do not bail out the banks and reward them for their excesses, instead reward the average mortgage holder.

The Fed Reserve recently opened their merchant discount window to a broader group of banks and investment houses. This rate is 2% for those special few.

I say that is not good enough. The Fed, instead of buying bad debt, should allow anyone who qualifies, to refinance their mortgage directly with the Fed, charging 2 1/2%. This gives the Fed a 25% markup. These rates would be locked in for up to 20 years. The Fed makes a profit, home-owners cut their interest by 50%-70% and the banks will get a great deal of loans off of the books.

Perhaps this is too simple to work.