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IPS Financial Market Recovery Plan

Mon, 09/29/2008 - 5:49pm — Bert
The Plan, from the Institute for Policy Studies:
IPS Plan to Pay for Recovery

Talking Points by Sarah Anderson, Chuck Collins, Dedrick Muhammad, Sam Pizzigati. Published September 26, 2008 12:12PM

Where to Find $900 Billion from the Wall Street Speculators

Executive Summary

  • Don’t finance the bailout with more debt
  • Make Wall Street speculators pay now
  • Raise $900 billion in new revenue
  • Stimulate Main Street and the real economy
As Congress debates the particulars of the inevitable bailout, one key question has gone largely unexplored: Who will pay for this mess?

Lawmakers in Congress appear to have assumed that the federal government will simply borrow more money to foot the bill for the bailout. The national debt ceiling will rise to a whopping $11.3 trillion, up from $8 trillion a year ago.

But this rush to borrowing merely shifts the bailout burden onto the backs of future taxpayers. Congress needs to change course — and develop a “pay as we go” plan that makes Wall Street pay. The lion’s share of bailout funding should come from the high-finance gamblers and the wealthy CEOs who have so profited from our casino economy.

Funding the Bailout: Basic Principles

  • Wall Street and speculators should pay now for the mess they created.
  • ...continued
Read More: IPS Plan to Pay for Recovery

Comments

Mon, 09/29/2008 - 11:07pm — Bert

Nader Press Conference on the First Bail-out Vote




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Tue, 09/30/2008 - 9:54pm — The Fire Inside

From the link...

A $200 billion “Main Street Stimulus Package” could bolster the real economy and those left vulnerable by the subprime mortgage meltdown.

I'm going to need a little explanation, but "those left vulnerable" by the subprime (read: junk) mortgage meltdown, how were they left vulnerable in the first place? Are these people who chose the adjustable-rate mortgage over a fixed-rate mortgage?

A $50 billion outlay to help keep people in foreclosed homes through refinancing and creating new homeownership and housing opportunities. These funds could also help those locked out of the American Dream to purchase homes through non-speculative mortgage programs

We'll get to how tax-dollars will be generated in a minute, but isn't this punishing people who pay their mortgage and have been responsible consumers by bailing out those who were reckless?

Why should I purchase a home at or below my means when I could simply attempt to live extravagant and - when I enter foreclosure - have the responsible segment of the population pick-up my tab?

And yes, people who were making $50,000 a year and "thought" they could make payment on a $300,000 home were reckless. The idea of a starter home - especially for young people today - is lost. An outlay "to help keep people in foreclosed homes," while well-intentioned, does nothing to correct this line of thinking.

A Wealth Tax Surcharge on Households with $10 million

They have realized huge gains from the manipulation of capital markets and the asset bubbles that created the current crisis.

These households also stand to lose the most in a market collapse. T. Boone Pickens investments have lost somewhere in the neighborhood of $1Bn, with investors looking to pull money as soon as possible.

If someone did something illegal, punish them. But to say "You have too much money, so we're going to need to tax you in order to shift wealth" is ridiculous.

I can go with a "Securities Transaction Tax" and a "Corporate Minimum Tax", largely because:

In August, the Government Accountability Office reported that two-thirds of U.S. corporations paid no income taxes between 1998 and 2005. These corporations paid nothing toward our shared expenses of defense, environmental protection, public health, and education.

Corporations benefit just as much from these things as individual citizens (and in some cases, moreso), so paying no taxes shouldn't be happening.

A ‘Disgorgement’ Recovery from Profligate CEOs

To help pay for recovery, the new Treasury authority should seek the payback of executive compensation inappropriately extracted in the years before the Wall Street meltdown.

No, they shouldn't. These companies have investors to answer to. If the investors felt a high-compensation was due, that's their prerogative. When the company is about to fail, that's on the investors, not the taxpayers. If they feel the need to recoup their money (which I'm sure they will), they can take the person to civil court in a class action suit.

A Progressive Inheritance Tax

Again, we're back to taxing people because they have money. If that money was made illegally, prove it. Otherwise, leave them alone.