For those that don't know, both the House and the Senate passed a bill to use $850 billion taxpayer dollars to bailout Wall Street investors and conglomerate banking institutions. The stock market continued dropping. On top of that, President Bush side-stepped the whole democratic process prior to the passage and had the federal reserve print an additional $630 billion. In short, America will soon be the victim of hyperinflation much like Germany after World War I.
I wrote my Congressman urging him to vote against the bailout. Surprisingly, he responded.
Dear Mr. Brinn:
Thank you for contacting me about Congressional action to address our
nation's economic crisis. I appreciate hearing from you.
Today the House of Representatives debated H.R. 1424, the Emergency
Economic Stabilization Act of 2008. This bill aims to prevent harm to
Americans that would result from a collapse of our nation's financial
system. I voted for H.R. 1424, which passed by a vote of 263 to 171.
President Bush promptly signed this bill into law.
I share my constituents' anger about this mess and how we got here. The
government did so much wrong, and while Democrats in Congress tried to
set them straight many times, we obviously did not do so strongly
At the outset of the debate over the original, unacceptable Bush-Paulson
proposal, I argued that the bill would need to include these principles:
taxpayer ownership and protection, aggressive oversight, and help for
homeowners. These principles are all met in part, but this bill is not
perfect. For one thing, the Secretary of the Treasury should have even
greater limits. The cost recovery from the financial district should be
sooner. I dislike the Senate's adding extraneous tax provisions. Every
Member of Congress has a better idea of how to fix the problem, but no
one has 218 votes for his or her plan. This is the compromise.
As I can tell, there would be harm in doing nothing. The crisis is real.
We need to act quickly to staunch this crisis of confidence, because if
credit locks up, it affects ordinary Americans, ordinary homeowners, and
every small business. It is already happening.
Some have suggested we defeat this bill to teach a lesson to Wall Street
highflyers. We could do that. We could teach a lesson to Secretary
Paulson, President Bush, and the regulatory agencies. We could teach a
lesson to the mortgage companies who entice borrowers to get over their
heads. We could teach the Senators a lesson not to attach extraneous
things to a financial bill. We could let the credit markets freeze up.
We could let small businesses fail to meet next week's payroll. We
could let college students drop out because they can't pay tuition. We
could leave farmers, homeowners, and factories out in the cold. Would
that teach the right lesson to the right people? I don't think so.
Instead, I supported this bill because there is more harm if we do not
act, because of its improvements, because it will cost far less than the
original Paulson proposal, because it adheres to the principles we laid
out at the beginning of the debate, and because it includes a temporary
Alternative Minimum Tax fix and my own property tax relief initiative.
We will be making a serious mistake, however, if we do not act further
to address this crisis. There remain long-term problems: problems of
bond traders wheeling and dealing in paper with no thought of the homes,
factories, and people behind these bonds; problems of some employers who
show no allegiance to their workers; problems of families who even in
good times consume more than they save; problems at regulatory agencies
that revel in the unrestrained trading.
We have more to do to address our weak economy, which we learned today
has seen a loss of 159,000 jobs in the last month. I will continue to
lead efforts in Congress to get to the root of the problem, repair bad
mortgages, and to help middle class families. We need a program similar
to the Home Owner's Loan Corporation (HOLC), which the Federal
Government created in 1933 in that mortgage crisis. The program, which
lasted 20 years, shored up a collapsing market by purchasing delinquent
mortgages at a discount and working with homeowners to restructure the
mortgages into more manageable terms. Congress and President Roosevelt
authorized HOLC for $4.75 billion - or $76 billion in today's dollars.
With this investment, in its first two years, HOLC helped more than 1
million homeowners. When the HOLC finally ended, it showed a net $14
million surplus for taxpayers. We should not wait for a new
administration to address our nation's pressing economic concerns.
Again, thank you for contacting me about this crucially important issue.
I look forward to hearing from you again about this or any other matter
He told me that Republicans were to blame and Democrats had been trying for years to avert this crisis. In short, he lied to me. I replied.
Dear Mr. Holt:
Thank you for the quick and lengthy reply. I appreciate your sense of duty
to maintain a dialogue with your constituents. However, I must say that I
fundamentally disagree with your decision to turn a blind eye to the
majority of Americans by voting yes for this bill
(http://tinyurl.com/4gox6n). Understand that this issue is the defining
issue of this generation, so your failure to listen will cost you my vote
and the vote of everybody I know come November 4th.
You said, "I share my constituents' anger about this mess and how we got
here. The government did so much wrong, and while Democrats in Congress
tried to set them straight many times, we obviously did not do so strongly
The blame for this economic mess does not fall solely on Republicans,
Democrats, Wall Street Suits, or Irresponsible Homeowners. Here are the
The federal reserve cut interest rates to a record low after the dot-com
bubble, allowing homeowners to purchase houses beyond their means. Both
Republicans and Democrats are to blame for supporting mortgage tax
deductions which gave additional incentive to these buyers. Real estate
agents continually sold large houses to families that couldn't afford them
so that they could make more commission. The Clinton Administration pushed
hard for low down-payment requirements for middle and low class families.
Mortgage brokers gave uncredited buyers adjustable loans with interest
rates that grew exponentially over time. Wall Street firms turned these
high risk loans into Mortgage Backed Securities, while the Bush
Administration turned a blind eye. Finally, it was everybody's fault to
believe that the housing bubble would continue expanding indefinitely.
Market bubbles, by definition, must pop. We are at a critical moment in
America's economic history, and we need to choose our actions wisely. The
right thing to do is to let the financial institutions at fault collapse,
which will provide opportunity for a larger number of smaller banks to
take their place. More banks means more competition. This will drive
housing prices down to their true worth while providing new jobs in the
At this point, depression is inevitable. We should take our punches now by
letting the conglomerate banks fail, having the market correct itself in a
year or so. Instead, you've decided to print $800+ billion dollars in
order to temporarily save these failed institutions. Instead of allowing
the market to correct itself, you've inflated the bubble to the point that
a pop would cause global economic Armageddon. Where is the $800 billion
coming from? Surely not through taxation, that would bankrupt millions of
Americans causing riots in the streets. No, the plan is to create this
money from thin air, destroying the value of our currency and driving the
price of necessities sky high.
By voting yes for this bill, you've made your choice. Unfortunately, it
was the wrong one, and America will pay the price. You and everybody who
voted for this bill are to blame for the inevitable economic crisis that
will come, so don't be surprised when you lose reelection on November 4th.
You'll have earned it.
I urge you all to write your own representatives to let them know that they will lose reelection if they continue to ignore their constituents. It's time to stand up and fight for our right to life, liberty, and the pursuit of happiness..!