Blue Mass Group

Reality-based commentary on politics.

Recoup, re-regulate, and stimulate: Benchmarking the bailout

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Recoup–Build in the mechanisms whereby taxpayers are made whole. Sen. Reed’s proposal to buy equity as well as junk is the simplest way to do this but other means to this end are possible.

While we’re at it, restore Clinton-era tax rates to those making more than a quarter million a year to offset the huge deficits entailed in the rescue and in the whole drunken binge of the last 8 years of Republican spending.

Stimulate–Cut taxes–with lower marginal rates and targeted credits–for those making less than a quarter million a year. The targeted credits can be for improvements that strengthen the economy by making it energy efficient.

Further stimulate by spending on infrastructure improvements–everything from mass transit to insulating homes–employing millions of Americans.

A plan lacking these elements should be unacceptable (and is unlikely to work). The debate should be about how, not whether to include these features.

What have I left out?

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  1. How about…

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    p>PUNISH! Find the mortgage brokers who broke the law and put them in jail. Find any “lender” who violated regulations and commence civil and/or legal actions against them. Find the people who lied on their mortgage applications and put them in jail and/or never allow them to borrow money again.

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    p>A few questions…

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    p>On Recouping… What “other” means are you referring to? Also, why should people making over $250,000 have to pay more taxes? Is this to punish them for paying their bills, their mortgages and their already high taxes on time?

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    p>8 years of Republican spending… hasn’t the Congress been in Democratic control for the last 2 years? When did George Bush start writing any spending budgets… doesn’t Congress write the budget for spending?

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    p>

    • I was hoping to get the ball rolling, not resolve the crisis singlehanded.

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      p>Plenty of room for stipulations about executive compensation, oversight and transparency (including judicial review), and other things that would clean up this dirty bill.

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      p>How about: Recipients of bailout largesse may not lobby the federal government or donate to political action committees or candidates until the largesse is returned with interest? Otherwise taxpayers would be paying for these activities. just thinking out loud here.

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      p>As for punishment: I am all for appropriate law enforcement, but it’s kind of beside the point, which is that we got into mess by repealing the laws and regulations that would have prevented it.

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      p>Other recouping mechanisms might include clawback provisions for repayment once things improve and/or taxes on profits earned with bailout monies. As I said, Reed’s proposal is simpler (and probably better economically).

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      p>The tax on rich folks is based on the general theory that those who got the goodies during the binge should defray some of the costs. Tax policy is a pretty blunt instrument but I think that would be better than the status quo.

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      p>The rest of your post, about how the whole thing is the Democrats’ fault, was pretty amusing, but I’ll pass.

      • As for taxing the rich (whatever that means)… how can we assume that “every rich person” made out during this period. What if someone was a sales person making $300K for the last few years… should they somehow be responsible for paying back the goodies that Bill Gates and others were making or so many stupid irresponsible people who borrowed money frivolously? Only socialist could support the class warfare aspect to this approach.

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        p>Sorry you passed, I really do want someone to answer why Congress has NO culpability to the deficit!

        • The problem some of us have had with your attacks is that they are simply directed at the Democrats and especially at Senator Kerry. This in spite of the fact that Kerry has been a fiscal moderate throughout his years in the Senate.

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          p>Unlike most Senators, who were for a line item veto when there party was in power only, Senator Kerry has been consistent on this. When he ran for President he proposed a way that the lines crossed out would have to be sent back to Congress and the deletions en mass accepted or rejected. This was thought to be a way to make it both fair and constitutional. When he lost, he was nearly the sole Democrat that stood behind the idea. (This was a clever idea that if used correctly would have the President eliminate a set of earmarks that would be embarrassing for people to vote for in the light of day.)

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          p>Maybe you should actually hear what your Senator’s fiscal policy is: http://www.jkmediasource.org/n…
          This is from 2 weeks after he lost the Presidency and when they were again raising the debt ceiling. This is as close to old fashioned fiscal moderation as I have heard in the Senate. The Republicans, who used to be fiscally responsible have been replaced by people wanting to cut taxes and deregulate.

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          p>Not all Democrats are innocent, but it was the Republican party philosophy actually implemented behind this.

          • they are from. Wrong is wrong, plain and simple. I wish people would STOP PLAYING POLITICS on this issue. I’ll pick on Kerry and any of the others who have been there, including McCain. The Republicans had their chance 8 of the last 8 years to do something and they didn’t. Shame on them. Now it’s the Democrats chance and they haven’t done anything either…SHAME ON THEM!!!

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            p>Kerry believes people like me should pay more taxes and as I posted earlier, I’m already paying for myself and about 10 other non-paying slobs in this country. It pisses me off to know that I have to already pay a whole shitload of money for taxes while others pay little to NOTHING AND Kerry, Obama and others want me to pay more. Great incentives for success!

            • would have risen substantially under either Obama’s or Kerry’s proposals.

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              p>I assume that that means that you also benefit more, indirectly, from what government provides than people will less. Do you want to live in a third world economy – where you and other wealthy people have a huge share of the nation’s wealth and the rest of the country has little?Think of what this country has given you and what you like in it.  

      • I heard an expression yesterday attributed to WC Fields

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        p> “you can’t cheat an honest man”

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        p>There were people getting loans with no regard for their responsibilities. Where else in our lives do we do this. Can I go back to my broker and get all the money back that I lost i the stock market when I picked a bad stock? Can I go down to Foxwoods and tell them I didn’t know the money I put on RED would be lost if the ball landed on BLACK? NO WAY! Sometimes you gamble and lose, sometimes you win. Can we go to these home owners who bought low and are sitting on a heap of cash and ask them to bail out the fools who LOST? Can we tell them it’s not fair that they did a better job buying a house, putting down a larger down payment, bought a house they could afford, paid a few hundred dollars for a lawyer to review their CONTRACT…

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        p>Now all the people who did the right thing have to bail out all the slobs who screwed up! I hope these people will never get a loan again.

    • Conservatives, they just love punishment. Love it! Death penalty? “Very, very tasty!” they say.

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      p>As a solution to the current crisis, however, all this punishment will only help with the aid of a Time Machine. Maybe McCain can offer a reward for inventing one. Maybe then we can all climb into a Time Machine and enact some stiff, stiff penalties retroactively in 1996 and put tough enforcers (like, uh, liberal Democrats!) in charge. All the bad people will be in jail, and presto, chango, complicated economic problem solved.

      • Why??? Here’s a start…

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        p>Excerpts from an AP story from Sept 23, 2008

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        p>

        STARKE — A Florida man convicted of shooting two young sisters in the head after raping and shooting their mother was executed Tuesday after a two-hour delay while authorities awaited final rulings from the U.S. Supreme Court.

        Richard “Ric Ric” Henyard, 34, was pronounced dead at 8:16 p.m. He had been condemned for the death of 7-year-old Jamilya Lewis and her 3-year-old sister, Jasmine.

        He appeared to be shaking and having a hard time breathing after the lethal injection was administered, and stopped moving a minute later.

        Henyard and a younger accomplice carjacked Dorothy Lewis and her daughters outside a grocery store in the central Florida town of Eustis on the night of Jan. 30, 1993. Henyard, then 18, raped Lewis and then shot her multiple times at close range, but she survived. He then participated in the shooting deaths of her daughters after they cried out for their mother.

        Lewis and her daughters had gone to a Winn-Dixie about 10 p.m. when they were carjacked by Henyard and 14-year-old Alfonza Smalls.

        Smalls repeatedly demanded that Lewis “shut the girls up” because they were crying.

        Henyard and Smalls raped Lewis before Henyard shot her in the leg, neck, mouth and between the eyes. She was rolled off the side of the road and left for dead.

        As they were driven away by Henyard and Smalls, the girls yelled: “I want my Mommy! Mommy, Mommy!”

        A short time later, the girls were taken from the car and killed with gunshot wounds to the head.

      • Did you read this post from bostonshepherd…

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        p>

        Who allowed this?  Congress allowed this.  Republicans and Democrats but a lot of Democrats:

        Barney Frank and Chris Dodd for obstructing better oversight on Fannie and Freddie

        Franklin Raines and Jim Johnson for running Fannie and Freddie into the ground, for their wholesale fraudulent finanical reporting of Fannie’s financial health, and their investing in billions of the sub-prime derivatives junk

        Andrew Cuomo (as HUD secretary) by reducing FHA lending standards, including no-money-down underwriting

        Chris Cox for weak oversight of the entire mortgage-backed securitization world
        investment banks, for levering up and buying their own junk

        Janet Reno (yes, the Justice Department) and the Clinton Administration through their use of Community Reinvestment Act since 1995, arm-twisting lenders to lend to unqualified borrows

        The Clinton and Bush administrations, for idolization of the false god of home-ownership at any cost

        The Bush administration for knowing all this, seeing the potential for problems, and not doing anything about it.

        So before you start whining for “more regulation”, please stop to consider the government’s role in birthing this mess.

        And more “regulation,” does that mean we return underwriting standards of 1985?  I, for one, would look forward to the days of requiring 20% down, meeting a 28% AGI threshold, providing proof of employment, and submitting paystubs and 3-years of tax returns.

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        p>Thoughts Kbusch?

          1. You haven’t responded to me. Remind me, then, why should I respond to you?

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          p>2. I’m not as interested in tribal warfare as you are.

            1. Yes I did respond. Please indicate where I didn’t.

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            p>2. You love tribal warfare. Most on this site do. Not only love it but it energizes you daily. Check the daily posts and the “energy/anger” that goes with them attacking Palin and others in the “opposite” tribe. I’m far more of a “moderate” than you. No comments on fixing SS? None on the above blame for the credit/mortgage problem. Please try NOT to be too partisan since I know how “tribal” you and most others on this site can… no MUST be.

            • My point is that punishment in the context of economic behavior can only act as a deterrent. Punishing ex post facto accomplishes no deterrence — without the help of a Time Machine. You did not answer this point.

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              p>The “conservatives love punishment” line is further underlined by McCain’s initial response to the crisis: fire the head of the SEC.

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              p>IMHO, you are engaging in tribal warfare rather than discussion. You reduce everything to points for “your” side versus points for “my” side. That’s why in your tribal mind your answer was a response: it was a response only in a primitive tribal warfare sense. I say negative things about your side; you can respond with negative things about mine. Yawn. Not a deep thinker, eh?

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              p>Me? If I want to argue about stuff with a conservative, I’d much prefer to argue with Gary who is capable of staying on topic, cares about getting to the facts, and is capable of understanding what others write. He is more caustic than you, but no less conservative.

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              p>He even punctuates better which is a sign of caring about what one says.

              • The only reason a deterrent has a chance of working is if the offending party knows there will be a punishment after they commit the offense. Am I stupid or missing something? Or maybe both?

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                p>We do love punishment. Don’t know why? That should be examined more deeply since maybe it contributes to the reason why we view liberals as so weak on so many issues, including national defense because you don’t punish… you try to understand, have compassion and forgiveness. We on the right want blood, punishment and fear of breaking the law.

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                p>Maybe I reduce things to points because I am stupid. Try to be compassionate of me and my shortcomings. I do think you are full of shit about some things including your tribal analogy regarding me. You and many others on this site are extremely tribal and rarely view issues or candidates without a democratic bias. No matter who McCain chose you would hate them and rip them apart. Many like Keith Olberman have already written their review of the debate tonight before it occurs. THere are very few bloggers here who appear to have any sense of voting for the person vs. the party. I’m probably more open minded than you about crossing party lines to vote but maybe that’s due to never having much choice to vore Republican in MA.

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                p>As for Gary, I’ll pay more attention to his style of commenting. Staying on topic, facts and understanding… And I’ll check out his punctuation which as you said means he cares about what he says (huh?).

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