As of September 17, 2008 the national deficit in the United States was over $10 trillion dollars. Not with a ‘B’, with a ‘T’. Ten trillion dollars that will have to be paid for by us, our children and our children’s children.
To put a stamp of ‘WHAT THE FUCK’ on this, here is the official definition of ‘national deficit’: ‘The total amount of money owed, from all previous years, that a country's government has on its books.’
While I try to stay out of the political realm (other than unofficially running for President, of course), here is what the national deficit was when George W Bush took office: 3.2 trillion dollars. Again, with a T. Granted 9/11 made us push money into defense and rebuilding, but there is something much deeper going on here.
To over simplify things greatly, we – as in Americans – are simply used to owing money. Debt is now our way of life. We now expect to owe until we die, at which point we hope the 401K (or whatever is left of it), our life insurance policy, and what sparse savings we managed to scrape together will pay off most of our IOUs so our families can get on top of things.
Don’t forget to factor in your own funeral costs. That can take a chunk out of your cache.
The rich cats now running our government – and make no mistake; they have all been raised with that proverbial silver spoon sticking out of their asses – have no concept that loans need to be paid off. They have spent their entire lives knowing that money can be always be had. While one project may not be successful, another may be a bonanza. All you need is some more capital and suckers to finance your dreams.
Well, my friends, look in the mirror because we are now those suckers.
Yesterday the Fed (Federal Reserve Board - the nation’s central bank run by our government) agreed to ‘loan’ AIG $85 billion dollars in an unprecedented effort to save the mismanaged, financially troubled insurance clusterfu….uh….company.
85 billion dollars. This coming on the heels of ‘loaning’ JP Morgan $30 billion as an ‘enticement’ to buy Bear Sterns after they mismanaged that company into bankruptcy.
I put the word ‘loan’ in quotes because there is remote chance of getting this money back to the American public. Yes, my friends, these federal notes of debt are being footed by us – the American taxpayers. You can label them loans all you want, but there are provisions in all of these bailouts that favor the corporations. Shocking, considering who is running this country into the ground.
Examples? Ok, let’s take a look at the JP Morgan loan. The company is getting the loan at a ridiculously low 2.5 percent. Something we can’t get when we try to buy a car. The loan also means that JP Morgan takes over the mismanaged assets of Bears Sterns, which, if they are worthless (an entirely plausible possibility) means the Fed is out $29 billion. JP Morgan would have to pay off the first billion of any losses. The rest? Yeah, that bill will be in the mail to each and every one of us.
The AIG bailout is less risky, as the Fed is actually taking a controlling interest in the company (79.9% to be exact, although where that number comes from is beyond me). Since AIG still has over a trillion dollars in assets (or 10% of our current deficit) and a shit load (official term on AIG’s website) of clients around the world, there is solid chance we could get most of that money back. You know, if – IF – the Fed can actually manage things better than the dipshits at AIG. I have my doubts.
Still, the Fed saying taxpayers are protected ‘because the loan is backed by the assets of AIG and its subsidiaries’ is misleading. See, before bailing AIG out the government tried getting private investors to pony up $75 billion in a sort of AIG community bail out fund. Only nobody wanted to bite. So, if private companies who know what assets and clients AIG has wanted no part of this, then why should we be so confident we’ll be getting any of this money back?
Sadly, I’m not even done with the amount of money the Fed is tossing around like confetti. Let’s not forget the $200 billion bailout of Freddy Mac and Fannie Mae (which is more understandable) as well as Federal help with bad mortgages.
Look, I know times are tough, but having the government bail out incompetent businesses is against everything the capitalist market stands for. Survival of the fittest. Do you happen to know the one bank not having a mortgage crisis? Quicken Loans. You want to know why? Because they screened and approved all their applicants and would not approve loans unless they were sure they would be paid off in time. Shocking, I know. They would only loan money to people they were sure could pay it off.
We’ve reached a saturation point with bailouts today. AIG is just the latest and you can probably bet there will be more to come. The American auto industry is already holding out their hands for help, claiming they need loans so they can meet the stricter MPH requirements due in 2020. No, I’m not kidding.
My question is how can the Republican party – the one currently bailing out companies to the tune of half a trillion dollars and counting; the one that has spent 800 billion dollars to date in Iraq and Afghanistan; the one that keeps passing friendlier and friendlier tax cuts to companies that still outsource jobs to India – keep calling themselves the party of less government?
Let’s look at it another way. If the government calls each of us today and says ‘Hey…um…the loan shark is threatening to break our thumbs if we don’t pay off this deficit. We need your share by Friday.’ Each of us – my two sons included – would have to fork over approximately $175,000.
Better cash in those pennies.
Today’s distraction: Not to be a total downer, but here is how Wall Street is reacting to the AIG bailout. Fucking fantastic.