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Economic Rescue Plan: More Debt, More Dollar
Devaluation And More Government
More of the same from the people who brought you the
crisis in the first place
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Treasury Secretary Timothy Geithner's so called economic rescue
plan, announced yesterday, has a three pronged approach to the
financial crisis - more debt, more devaluation of the dollar
and more government.
In addition to making several blatantly contradictory
statements, Geithner revealed that the Treasury intends to stay
routed to the same course of action that caused the crisis in
the first instance and has since perpetuated and worsened it.
"I want to make clear that I am not here
today to ask for more money," Geithner told Senators during
congressional testimony. But, later added, "this is going
to be an expensive problem."
The first prong of the "plan", if it
can be called that, will see the financial system flooded with
$1.5 trillion, a vast portion of which will come from the Federal
Reserve printing more money out of thin air. The inevitable
devaluation of the Dollar that will follow this may be enough
to force a complete collapse and spell the end of its reserve
currency status.
Second, Geithner intends to spend between $250
and $500 billion of taxpayer money to buy up so called "bad
assets" and putting them into a "bad bank". Essentially
this constitutes transferring vast amounts of spiraling debt
from the books of the negligent and criminal bankers to those
of the taxpayer. Does that sound like a good idea or a "bad"
idea?
The third part of the "solution" involves
a huge expansion of financing for consumer loans and bank lending
programs through the Federal Reserve and the Treasury. Essentially
offering more debt to the consumer in the shape of student loans,
cars and credit cards to the tune of up to $1 trillion.
All of this, of course, facilitates a massive
expansion of the role of the federal government in the financial
system.
Geithner left consumers, investors and traders
alike asking 'what part of that plan constitutes a rescue?'
(Article continues below)
The stock market, propped up for weeks on the
expectation that Washington would finally deliver a comprehensive
rescue plan, dipped almost as soon as Mr. Geithner began speaking
in the morning. The Dow Jones industrial average fell 382 points,
or 4.6 percent, by the time the market closed, the New
York Times reported.
Geithner chastised the Bush administration and
his predecessor, Henry M. Paulson Jr. stating "Policy was
always behind the curve, always chasing the escalating crisis...
The emergency actions meant to provide confidence and reassurance
too often added to public anxiety and to investor uncertainty."
However, Geithner has critics struggling to find
any significant difference between his "sweeping overhaul"
rescue plan and the previous Treasury Secretary's now much maligned
TARP program, as he gave no specific details as to how the plan
would work, offering only the same muddy generalizations that
Paulson did three months ago.
"Many of us were looking forward to a plan
that could be presented in a straightforward, clear and detailed
way. Unfortunately, that is not what we received yesterday."
Republican Jeff Sessions of Alabama commented.
Geithner is very good at critiquing what went
wrong in the last year, but just seems to be perpetuating it."
said
Desmond Lachman, a resident fellow at the American
Enterprise Institute.
"If the problem America found itself in
was too much debt, then how can adding more debt be helpful?"
asked political analyst James Pinkerton from the New America
Foundation in a Russia
Today report.
"The idea of solving it by taking the same pirates who
stole the first trillion dollars and saying here’s more
money. You look up the word ‘corrupt’ in the dictionary
and that’s what you see," Pinkerton added.
Democratic Congressman Dennis Kucinich commented that "the
government has become an engine for taking money from the people,
from their pocketbooks and purses and accelerating it to the
top."
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