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Echoes Of Iraq War: White House Claims Bailout Will Pay For Itself
Think Progress
Thursday, September 25, 2008
To justify the exorbitant cost of the bailout for the financial industry, Bush administration officials have been repeating the dubious claim that American taxpayers should expect to recover much, if not all, of the proposed $700 billion:
PAULSON: This is not an expenditure. … Money will come back in.
BERNANKE: What’s clear is that the $700 billion is not an expenditure. There’s going to be a substantial amount of recovery.
BUSH: Money will flow back to the Treasury as these assets are sold, and we expect that much, if not all, of the tax dollars we invest will be paid back.
White House spokesmen Ed Gillespie and Tony Fratto appeared on Fox News, repeating that “a lot of that money, and maybe all of it, will come back.” Watch a compilation:
As Paul Krugman writes, “The premise of the Paulson plan — though never stated bluntly — is that these assets are hugely underpriced, so that Uncle Sam can buy them at prices that help the financial industry a lot, without big losses for taxpayers. Are you prepared to bet $700 billion on that premise?”
(ARTICLE CONTINUES BELOW)
The White House’s assurances that the bailout will pay for itself is eerily reminiscent of the assurances the Bush team made that the Iraq war would be similarly inexpensive — if not profitable — for America. Take a look at some of those promises:
RICHARD PERLE, Chair of Pentagon’s Defense Policy Board: “Iraq is a very wealthy country. Enormous oil reserves. They can finance, largely finance the reconstruction of their own country. And I have no doubt that they will.” [7/11/02]
PAUL WOLFOWITZ, Deputy Defense Secretary: “There is a lot of money to pay for this that doesn’t have to be US taxpayer money, and it starts with the assets of the Iraqi people. We are talking about a country that can really finance its own reconstruction and relatively soon.” [3/27/03]
ARI FLEISCHER, White House press secretary: “Iraq has tremendous resources that belong to the Iraqi people. And so there are a variety of means that Iraq has to be able to shoulder much of the burden for their own reconstruction.” [2/18/03]
LAWRENCE LINDSEY, White House economic adviser: “The likely economic effects [of a war in Iraq] would be relatively small…. Under every plausible scenario, the negative effect will be quite small relative to the economic benefits.” [9/16/02]
Krugman concludes, “The whole premise of the bailout push has been ‘We’re the grownups, we know what we’re doing, just trust us.’ Sorry, but that’s how Colin Powell sold the Iraq war. Fool me once, shame on you, fool me twice … you shouldn’t get fooled.”
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7 Responses to “Echoes Of Iraq War: White House Claims Bailout Will Pay For Itself”
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September 25th, 2008 at 9:36 am
more lies by the skimming scumers !!!!!!!!!!!!!!
http://www.youtube.com/watch?v=lm_xX1Ur43I
September 25th, 2008 at 10:02 am
Expect this: .|..
September 25th, 2008 at 11:08 am
Governmental meddling will only make matters worse. Compare the depression of 1920-21, which few remember, with the depression of the 1930s. The government did not meddle in the depression of 1920-21. It was sharp but short-lived. The government interfered extensively in the depression of the 1930s. It lasted 10 years was deeper and worse than the earlier depression. (Most of Roosevelt’s programs were built on programs begun by Hoover. Hoover was no proponent of a free market economy. He was almost as much of a fascist as Roosevelt.)
September 25th, 2008 at 7:30 pm
As long as all this stuff is going to pay for itself let’s refuse to pay federal income tax in 2009.
Problem solved.
FREE AMERICA
REVOLUTIONARY (DIRECT) DEMOCRACY
September 25th, 2008 at 9:48 pm
If these assets are so “under-priced” then why is there not a stampede of buyers clambering to buy them?
This current situation stared many years ago and has been growing ever since. A large part of the problem is the “musical chairs” played by corporations when they appoint a new CEO or other executive.
They made the mistakes and now they want to be rewarded for their mistakes. This package will be guaranteeing their positions as before. With the bonus at the end of the year as the balance sheet of the corporation will be back in the black. Most likely with a healthy profit for the corporations and very little, if any, tax to pay.
Of all the talking heads that I have seen all are predicting the chaos that will ensue if this rescue package is not agreed to. None have considered the effect of increasing the National debt by about 100%.
The US National debt as it stands will never be repaid so will make it so that international lenders will be reluctant to lend even more. The devaluation of the dollar will lead to reconsideration of its reserved currency status which is the only reason it has held its value for so long.
With the passing of this package watch for hyper inflation in the short term. Dollar down equals higher priced imports. As America now imports most of what is needed to live day to day it will be a long time before local manufacturing can re-establish and produce the commodities needed to survive. This includes food as the agri-business is mainly geared to producing product not for human consumption. Added to that the current methods of farming have greatly added to the soil degradation as evidenced by reduced yields across most crops.
What is needed is a cultural change within Corporate America. Shareholders becoming more proactive in controlling the board of directors and the board of directors taking a more active role in ensuring good governance of their appointed executives.
After all the shareholders own the company and the directors are the elected representatives of the shareholders (and are responsible to the shareholders) who in turn control the CEO who is responsible for the day-to-day activities of the corporation. I believe that the directors and the CEO should be held responsible for their actions within law. If a CEO makes a mistake and looses money or brings the corporation into disrepute then should be fired loosing of all benefits. Not allowed to quietly resign and still given a golden parachute as is the case today. Also I believe that if the corporation is involved in any actions deemed to be illegal then the board both singularly and collectively, be held accountable in law.
Maybe this would cause some of them to stop and take a look at the consequences of their actions before embarking on some cowboy behaviour.
Another question I ask is why a private individual has different bankruptcy laws to that of the corporations. A Corporation can file for bankruptcy protection and still continue to trade etc. while an individual cannot.
September 26th, 2008 at 3:04 am
The 1992 Presidential Debates with Ross Perot were not dull. His warnings have now come true. Replace John McCain with Ron Paul. Add Ralph Nader and Cynthia McKinney. Barack Obama must earn his victory, not win by default.
March 3rd, 2009 at 8:10 am
hmmm