Analysis of the US Treasury Department 100 Days Progress Report
You can download / browse the report here. What strikes you immediately as you go through this report is the hypocricy involved in formulating the report. Almost immediately, what catches your eye is a sub-title "Putting Money Back into the Pockets of Hardworking Americans", when everyone knows that the only pockets getting filled are those of rich wall-street bankers. For example, let's take the section on "making work pay tax credit." This is touted to increasing the hardworking American's net worth by $65 dollars a month. Wow, may be he can afford a good cell-phone calling plan now. Instead of giving the $8 trillion to banks, as the fed (as in the federal reserve) and the treasury are doing, had they given that money to the Americans, $8 trillion divided by 300 million American taxpayers could be a good 27000 dollars per American man, woman, and child. If she is given that, she can buy a car, she can buy new shoes and new clothers, and she can pay rent for an apartment for a year. This can drive the consumption (as in the C in the macro-economic equation GDP = C+I+G = Consumption + Investment + Government Spending) up, and the economy can recover. Now, that is a good plan for the American consumer. Not the other way round, take $27,000 dollars per capita from the taxpayer, and give him back $65 per month (and that too, only during the recovery period), and give the rest away as bonus to Goldman, and Bank Of America, and Morgan Stanley.Listen to our weekly podcasts where every week we use data, facts, and statements from US Treasury Officials (starting with the Honorable Mr. Geithner) which prove beyond a shadow of doubt that the US Treasury is a puppet in the hands of Wall-Street bankers. Let's analyze a couple of items from the report:
Expansion of the First Time Homebuyer Tax Credit (Page 3)
At the time of writing this analysis (June 2, 2009), home sales data point to the fact that half of all foreclosures are now for prime mortgages. Foreclosures are accelerating, since the 3 month moratorium on foreclosures is now over. Unemployment is climbing, and people with good credit (i.e., those who took out prime mortgages to buy a home) are not being able to keep their homes. The administration cites the low interest rates when it goads people to refinance, but that is a tactics that has caught havoc in the lives of millions of Americans in the last five years: low interest rates. Whenever people bought homes using the excuse / bait of "low interest rates", they suffered later. Those whose home values have fallen (in fact, nationwide, median house prices are back to 2002 level, so those who bought in 2003, 2004, 2005, 2006, 2007, 2008 are facing negative equity on their homes) since they purchased it (a likely scenario for all homebuyers who bought homes after 2004) have a tough choice: refinance a loan which is for a property with a lower $ value than the loan) or walk out of the loan, filing personal bankruptcy (and thus ruining one's credit history). In this scenario, asking Americans to buy that first home by providing "Expansion of the First Time Homebuyer Tax Credit", which is mentioned on page 3 of this 8 page report, is like bribing people to get into loans (which will be issued by the same or similar banks which created all the sub-prime and mortgage related frauds in the first place) for assets which can plummet further (since employment data gets weaker month after month) is very unfair on the main street. A paltry 8000 dollar tax credit will never go a long way in helping anyone financially if the house price falls even 20,000 dollars, and does not come up for a while! In places like California, where the price declines lag the nation-wide average, average homes might fall another 40,000 dollars in the next year. Just as banks were allowed to take risks and mis-manage their business, and were given doleouts like TARP and TALF and pPiP, should the individual home-buyer not be given the same consideration? Consumer and Business Lending Initiative (Page 5)
Here, the report has endorsements from Citi and JP Morgan, two of the beneficiaries of federal bail-outs. The report praises its CBLI and TALF initiatives, while the SIGTARP report published earlier warns that along with pPiF, TALF is subject to fraud and abuse. It remains to be seen how the financial institutions will abuse these provisions, and thus milk a few trillion more from the American tax-payer. But, don't you think that by using endorsements from the banks while the American people, the media, and progressive websites like this one keep attacking the administration for being friendly to banks and unfriendly to people, is not only stupid, but shows the brazen corruption that grips any administration --- democratic, republican, or what have you.
|
|
|
|
|
|
|
|
MORE COUPONS (COMING SOON) >>
