It is Time to PAY for past SINS!

It is Time to PAY for past SINS!

As we look back on the bailout of the banks, Wall Street and AIG we need to realize this can’t happen again.  Most Americans never really had time to evaluate what took place and make a decision and in fact neither did the US Congress.

It could be argued that the bailout was rammed down America’s throat by three people, Paulson, Bernanke and Geithner.  Once these three convinced the President (BUSH, not Obama) and a few key members of congress to bailout Bearn Stearns ($32 billion) the flood gates opened and you and I (and our children) are now of the hook for $2 trillion in bad loans and other toxic assets.

I call these three men that lied about how terrible it would be if we allowed Bear to go bankrupt – the EVIL THREE.  They were not looking out for the taxpayer, the average America, they were protecting scammer jammers that took huge risks, gambled and lost.  Using taxpayer money to bailout these crooks was criminal and it happened while Bush was in charge.    

There are several things that must be done now to prevent this happening again.

1.    Obama must close down all the bailout activities, stop spending taxpayer money now and allow the economy to absorb what is left of the bad loans – many will suffer, but this is necessary for recovery.  No more taxpayer money to the banks, Wall Street (WS) or borrowers in trouble.  The real estate markets will take another hit but this must be done.  

The real estate market is still being artificially inflated by taxpayer money and many banks are holding bad loans waiting for the Fed to buy them at face value when they are worth 70 cents on the dollar.  This has to stop and we need to allow the free market to take over again.

2.    Obama and the congress must pass a law that reduces the size and limits the ability of the Federal Reserve (The Fed) to act.  The Fed is now holding over $2 trillion in bad debt it took from the “private” for profit banks, WS and AIG.

The Fed should purge all non-banks (WS).  No Wall Street firms should be insured by taxpayer money for their risky activities, speculation and gambling, as they are now.  This is just crazy. 

The Fed should require the member banks to implement strict lending rules, no loans without complete documentation of the borrower’s ability to repay the loan.  No real estate loans without a material down payment, at least 10% of the purchase price.  The 100% loans made by banks guaranteed borrowers had no skin (investment) in the game to lose and these borrowers walked away from millions of these loans when the going got tough.  No more free money at the taxpayer’s expense.

The Fed should be limited no more than $50 million in a single loan to any bank without the approval of congress.  No banks can owe the Fed (taxpayers) more than 5% of their total deposits.  This will reduce their ability to gamble with taxpayer insured funds. 

3.    The government must set some limits on size.  Banks were limited by law as to the percentage of deposits they could have in any given market.  This was waived at the request of the evil three.  To have a free market there must be competition.  There is no free market when one bank controls a majority of all deposits and loans.  Today just 4 HUGE banks control 50% of all US deposits, 70% of all US real estate loans and 80% of all US credit card transactions.  This is not a free market.  This also increases the risk to taxpayers if a bank goes bankrupt – we need to get rid of TOO BIG to FAIL.  If a bank fails, the small depositors (under $250K) should be insured, but the banks should be allowed to go under.

It is time to pay for past sins and set some limits so the taxpayers don’t get screwed again by risky behavior of the private for profit banks and WS.

Two of the EVIL THREE (Geithner and Bernanke) are still in power and could do this all over again if we don’t take some action.