Big Bailout 2.0: The Rescue

Taxpayers Lose Now,

Big Government Wins Later

Click on the boat to see all the articles in the Big Bailout Series

The Big Bailout…um “rescue” has finally been signed into law.  Now we can all now breathe a sigh of relief – until the next government caused crisis emerges, calling for yet another government rescue, which will in turn plant the seeds of a future crisis.

This is as good a time as any to point out a blatant deception that has been woven through the melodrama of the past two weeks.

During House and Senate Debates speaker after speaker has referred to the taxpayers being partially or fully reimbursed or even making a profit, as the government resells the toxic mortgage securities it will be buying under the authority in this bill.

It’s certainly true that the securities will eventually be sold, perhaps even for more than they will cost.   In fact, the chances of the government turning a profit are reasonably good.

But anyone who’s kept track of politics in recent decades knows the beneficiary will never be “the taxpayers.”  When, in a year or two or three, proceeds from the sale of these assets begin to flow back into the treasury, the political-media establishment will conspire to plant a name for them in the collective consciousness. That name may be something like “government dividends” or  “government windfall” or “a return on investment,” by a wise Congress.

The usual government-media spokesmen will insist that this “extra” money, sloshing into Washington without raising anyone’s taxes, should go to government programs for “struggling families,” or “alternative energy” or “climate change” or whatever is the latest political fad at that time.  The money will disappear a little faster than it comes in.

Even though today’s party line is that somehow “taxpayers” will be reimbursed, nobody currently in government contemplates sending checks to the 45% of Americans who pay all the personal income tax.  There certainly won’t be any distribution to the companies that pay the corporate income tax.

The ultimate beneficiaries will be those factions and causes that manage to prevail in the never-ending game of horse trading and influence peddling in Congress.

Shame on politicians in both parties for promising that “taxpayers will be repaid.”

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