Value Added Tax or VAT–Plan B–If The Cap and Trade Energy Tax Bill Does Not Pass–Kill The VAT, Abolish The IRS–Stop Socialist Spending and Vote For The FairTax!
“Experience hath shewn, that even under the best forms of government those entrusted with power have, in time, and by slow operations, perverted it into tyranny.”
~Thomas Jefferson
UPDATED APRIL 7, 2010
What a VAT Means for the Economy
Charles Krauthammer (VAT coming soon)
VAT (Value Added Tax) Will be needed to pay for Health Care Reform
Volcker Calls For VAT, Energy Tax, Carbon Tax
Top White House Advisor Suggests Imposing VAT Tax
Be Afraid, Be Very Afraid of the Obama Administrations Scary Trial Balloon
Pelosi Open To Raising Taxes On Everything (VAT) Including The Poor
The Vat Tax is coming
Watch out! Obama administration is looking to implement a Value Added Tax (VAT tax)
Beck on Oreilly: We need a VAT tax to fix the country
Dan Mitchell discusses the VAT (Value Added Tax)
The Value Added Tax: A Hidden New Tax to Finance Much Bigger Government
Eight Reasons Why Big Government Hurts Economic Growth
Daniel J. Mitchell – USA: Drowning In Debt?
Rep. King hosts FairTax Special Order
Time for both Glenn Beck and Bill O’Reilly to get a clue about the Value Added Tax.
It is a bad idea.
The problem is government spending.
The solution is not another tax to “pay” for this spending.
The solution is to cut Federal Government spending by closing down and abolishing ten Federal Departments.
Milton Friedman on Libertarianism (Part 4 of 4)
Then limit each year’s Federal Budget spending or expenditures including Social Security and Medicare payments to 90% of revenues collected from the previous year’s FairTax.
The remaining 10% would go to pay down the National Debt.
No more deficit spending.
No more bailouts.
No more stimulus packages.
No more subsidies.
No more tax returns.
The time has come for both The FairTax and Surplus Budgets.
This is fiscal responsibility or living within ones means.
Try to pass a value added tax in addition to the income tax and you will get a tax revolt from the American people that will make the Tea Parties look like a walk in the park.
Any politician who supports a value added tax will be voted out of office, Democrat, Republican, Socialist, or Independent!
Any talk radio or television host who supports a Valued Added Tax in addition to Federal income, payroll, capital gains and estate and gift taxes will lose audience as his/her listeners and viewers turn them off.
Be forewarned, the Value Added Tax is a loser.
Just look at who is supporting this idea–the Progressive Radical Socialist Democratic Party.
These people recognize that their Cap and Trade Energy Tax is not going to pass and their backup plan for more tax revenues is the Value Added Tax.
Obama and the Democratic Party need the Value Added Tax to pay for all the additional Federal Government spending they want including bailouts, stimulus packages, political payoffs and subsidies for their political supporters.
If you are against the Cap and Trade Energy Tax you should be against the Value Added Tax.
If you are not, you are confused.
Glenn Beck and Bill O’Reilly get a clue!
Do your homework.
Bill O’Reilly obviously did not do his homework or get the memo when he made this video:
What Bill thinks of the FAIR Tax
FairTax Prebate Explained
Charlie Rose Show: Fair Tax
I guess Bill missed the part about the FairTax prebates!
Joe The Plumber did his homework and gets it.
Joe The Plumber on FairTax
It is about time several talk radio and television commentors do their homework as well!
Think of the Value Added Tax as a brand new credit card with very high trillion dollar limits for the Progressive Radical Socialist Democratic Party to spend more of the American people’s money.
Throw the bums out.
Do not reward them with a new tax or credit card to steal money from the American people, their children, grandchildren and great grandchildren.
Give me a break.
Enough is enough.
Replace all existing Federal taxes including Federal income, payroll, capital gains and estate and gift taxes with a national sales consumption tax–The FairTax.
The FairTax time has come!
Surplus Federal Budgets time has come.
Fiscal Responsibility time has come.
Limited Government time has come.
When they say to you it will never happen, start talking about the American Revolution.
Ronald Reagan – Curbing the Size of Government
Reagan on Taxes
Fair Tax
Pence on the Fair Tax
“A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned – this is the sum of good government.”
~Thomas Jefferson
What is the FairTax?
Q&A on the FAIRTAX pt.2
The Fair Tax Explained Part 1 of 2
The Fair Tax Explained Part 2 of 2
The Fair Tax
Mike Huckabee – What is the “Fair Tax?”
Dave Ramsey on the Fair Tax
Lunch&Taxes HOWITWORKS
Lunch&Taxes HOWMUCH
Lunch&Taxes COLLECTED
Lunch&Taxes: LESS
Lunch&Taxes HER
Background Articles and Videos
24% Favor National Sales Tax, 65% Oppose
“…The New York Times reports that “economists across the political spectrum say a consumption tax may be inevitable once the economy fully recovers.”
One of the reasons cited by the newspaper is the lack of political will to cut spending, but implementing a national sales tax may be even more of a political challenge. The latest Rasmussen Reports national telephone survey finds that just 24% of voters favor a national sales tax. Sixty-five percent (65%) are opposed.
When the idea is paired with health care reform, it does a bit better. Thirty-nine percent (39%) support a national sales tax to pay for the cost of health care reform, but a majority (52%) still remains opposed.
A plurality, however, like the idea of replacing the federal income tax with a national sales tax. Forty-four percent (44%) favor the idea, and 36% are opposed. …”
Taxation is Theft – Stop Obama’s Tax Hikes
Tom Wright on the FairTax part 1
Tom Wright on the FairTax part 2
Tom Wright on the FairTax part 3
Tom Wright on the FairTax part 4
Tom Wright on the FairTax part 5
Tom Wright on the FairTax part 6
Tom Wright on the FairTax part 7
Tom Wright on the FairTax part 8
Tom Wright on the FairTax part 9
Value Added Tax
“…Value added tax (VAT), or goods and services tax (GST), or income tax is a consumption tax (CT) levied on any value that is added to a product. In contrast to sales tax, VAT is neutral with respect to the number of passages that there are between the producer and the final consumer whereas sales tax is levied on total value at each stage (though in the U.S. and many other countries, sales tax is charged only at the point of final sale to the final consumer, and a use tax only to the final user; there are no sales taxes paid at wholesale or production level). The result is a cascade (downstream taxes levied on upstream taxes). A VAT is an indirect tax, in that the tax is collected from someone who does not bear the entire cost of the tax.
Maurice Lauré, Joint Director of the French Tax Authority, the Direction générale des impôts, was first to introduce VAT on April 10, 1954, although German industrialist Dr. Wilhelm von Siemens proposed the concept in 1918. Initially directed at large businesses, it was extended over time to include all business sectors. In France, it is the most important source of state finance, accounting for 52% of state revenues.[1]
Personal end-consumers of products and services cannot recover VAT on purchases, but businesses are able to recover VAT on the materials and services that they buy to make further supplies or services directly or indirectly sold to end-users. In this way, the total tax levied at each stage in the economic chain of supply is a constant fraction of the value added by a business to its products, and most of the cost of collecting the tax is borne by business, rather than by the state. VAT was invented because very high sales taxes and tariffs encourage cheating and smuggling. Critics point out that it disproportionately raises taxes on middle- and low-income homes. …”
http://en.wikipedia.org/wiki/Value_added_tax
FairTax.org
http://www.fairtax.org/site/PageServer
Fair Tax
http://linderfairtax.house.gov/
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The Sovereign Wealth Fund Threat: Are Chinese Communists Behind Rush In Passing Bailout Bill?
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Al Gore Global Warming Hot Head Says The Artic Ice Cap Will Disappear In 5-10-15 Years–Volcanoe Gate–Eruptions Melt Ice and Increase Carbon Dioxide!–Videos
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Lord Christopher Monckton–Climate Change–Treaty–Videos
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The Sovereign Wealth Fund Threat: Are Chinese Communists Behind Rush In Passing Bailout Bill?
What is going on?
The Elite Looting Americans
Rep. McCotter discusses Sovereign Wealth Funds
Ron Paul talks @ Sovereign Wealth Funds Hearing 9/10/8
Sovereign wealth funds explained – Newsnight video
Lee Kuan Yew on Singapore sovereign wealth fund
Sovereign Wealth Funds On The Rise
Sovereign wealth funds – what China will do next?
Sovereign Wealth Funds — Navarro’s China Effect
17th Annual Conference:Sovereign Wealth Fund Investment 7/10
17th AnnualConference:Sovereign Wealth Fund Investment 10/10
Paul Volcker on Sovereign Wealth Funds and the Economy
China’s threat to American economic stability: CNN
America’s Fate in the Coming Era of Chinese Hegemony
“…a parliament or government which becomes a charitable institution thereby becomes exposed to irresistable blackmail. And it soon ceases to be the ‘deserts’ but becomes exclusively the ‘political necessity’ which determines which groups are to be favoured at general expense.”
~Friedrick A. Hayek, The Political Order of a Free People, page 150.
“…once wide coercive powers are given to governmental agencies for particular purposes, such powers cannot be effectively controlled by democratic assemblies.”
~Friedrick A. Hayek, The Constitution of Liberty, page 116.
“It would scarcely be an exaggeration to say that the greatest danger to liberty today comes from the men who are most needed and most powerful in modern government, namely, the efficient expert administrators exclusively concerned with what they regard as the public good.”
~Friedrick A. Hayek, The Constitution of Liberty, page 262.
Why all the rush in passing the bailout bill?
Why were alternative courses of action ruled out?
Why does the Federal government need to purchase the assets of financial institutions instead providing liquidity in the form of loans or investment to these financial institutions?
Is this an October surprise to influence the US elections?
Why are President Bush, Senators McCain and Obama resorting to dire fear mongering and very similar phrases and stories to try to convince and scare the American people to supporting the quick passage of the United States Government bailout of financial institutions, the so-called Emergency Economic Stabilization Act of 2008?
George W. B ush statement on failure of wall street bail out
McCain statement of failure of bailout bill
Obama Still Begging Taxpayers To Support Wall Street Bailout Bill
The fear campaign is not working.
Credit is not frozen.
The American people are calling their banks, credit unions, and car dealers–loans are being made.
Business as usual.
Just like it was business as usual in Congress.
The American elites are lying to the American people and the American people know it.
Some suspect that the Chinese Communists may have made it known to the US that China will not continued to hold US Treasury securities unless the US Federal government purchases from Chinese financial institutions those US mortgage-backed and related securities that are currently depressed in prices-so-called troubled assets.
In other words the US Treasury needs to bail out Chinese financial institutions that have purchased securities from US financial institutions, such as investment banks.
Why?
How much mortgage backed securities do Chinese financial institutions hold in their investment portfolios?
How much have these Chinese financial institutions lost on holding this type of securities?
A lot of questions, but not many answers from the American elites.
Just hurry up and pass the bailout bill or else the US economy goes into a severe recession if not depression?
The American elites are not leveling with the American people.
Charlie Rose – Economist Milton Friedman
What is going on?
First read the following from the Emergency Economic Stabilization Act of 2008 that the Senate passed:
Sec. 112. Coordination with foreign authorities and central banks.
The Secretary shall coordinate, as appropriate, with foreign financial authorities and central banks to work toward the establishment of similar programs by such authorities and central banks. To the extent that such foreign financial authorities or banks hold troubled assets as a result of extending financing to financial institutions that have failed or defaulted on such financing, such troubled assets qualify for purchase under section 101.
The Secretary shall coordinate, as appropriate, with foreign financial authorities and central banks to work toward the establishment of similar programs by such authorities and central banks. To the extent that such foreign financial authorities or banks hold troubled assets as a result of extending financing to financial institutions that have failed or defaulted on such financing, such troubled assets qualify for purchase under section 101.
The Secretary shall coordinate, as appropriate, with foreign financial authorities and central banks to work toward the establishment of similar programs by such authorities and central banks. To the extent that such foreign financial authorities or banks hold troubled assets as a result of extending financing to financial institutions that have failed or defaulted on such financing, such troubled assets qualify for purchase under section 101.
Note that the definition of what is a “troubled asset” under section 101 is quite broad:
TROUBLED ASSETS
—The term ‘‘troubled assets’’ means—
(A) residential or commercial mortgages and any securities, obligations, or other instruments that are based on or related to such mortgages, that in each case was originated or issued on or before March 14, 2008, the purchase of which the Secretary determines promotes financial market stability; and
(B) any other financial instrument that the Secretary, after consultation with the Chairman of the Board of Governors of the Federal Reserve System, determines the purchase of which is necessary to promote financial market stability, but only upon transmittal of such determination, in writing, to the appropriate committees of Congress.
http://banking.senate.gov/public/_files/latestversionAYO08C32_xml.pdf
Looks like the United States will be buying billions of dollars of troubled assets from foreign banks, including China.
The failure of Congress and specifically the Democratic Party to allow appropriate regulation and oversight of Fannie Mae and Freddie Mac will result in the bailout of China who bought upwards of $400 billion of mortgaged backed securities or agencies.
Now what is the source of all those campaign contributions to certain Presidential candidates coming from abroad in 2008?
Secret, Foreign Money Floods Into Obama Campaign
By: Kenneth R. Timmerman
“…And then there are the overseas donations — at least, the ones that we know about.
The FEC has compiled a separate database of potentially questionable overseas donations that contains more than 11,500 contributions totaling $33.8 million. More than 520 listed their “state” as “IR,” often an abbreviation for Iran. Another 63 listed it as “UK,” the United Kingdom.
More than 1,400 of the overseas entries clearly were U.S. diplomats or military personnel, who gave an APO address overseas. Their total contributions came to just $201,680.
But others came from places as far afield as Abu Dhabi, Addis Ababa, Beijing, Fallujah, Florence, Italy, and a wide selection of towns and cities in France.
Until recently, the Obama Web site allowed a contributor to select the country where he resided from the entire membership of the United Nations, including such friendly places as North Korea and the Islamic Republic of Iran.
Unlike McCain’s or Sen. Hillary Clinton’s online donation pages, the Obama site did not ask for proof of citizenship until just recently. Clinton’s presidential campaign required U.S. citizens living abroad to actually fax a copy of their passport before a donation would be accepted.
With such lax vetting of foreign contributions, the Obama campaign may have indirectly contributed to questionable fundraising by foreigners. …”
Also consider that in the 1996 Presidential election significant campaign contributions were given to President Clinton from Chinese sources:
1996 United States campaign finance controversy
“The 1996 United States campaign finance controversy was an alleged effort by the People’s Republic of China to influence domestic American politics during the 1996 federal elections.
The issue first received public attention in early 1997, with news that a Justice Department investigation had uncovered evidence that agents of China sought to direct contributions to the Democratic National Committee (DNC) in violation of U.S. laws regarding foreign political contributions.[1] While the Chinese government denied all accusations, twenty-two people were eventually convicted for fraud or for funneling Asian funds into the United States elections. …”
“…According to the United States Senate report Investigation of Illegal or Improper Activities in Connection with 1996 Federal Election Campaigns, prior to 1995 China’s approach to promoting its interests in the United States was focused almost exclusively on diplomacy, including summits and meetings with high-level White House officials. In these meetings, Chinese officials often negotiated with the United States government by using the appeal of their huge commercial market.[2]
Around 1995, according to the Senate report, Chinese officials developed a new approach to promote their interests with the United States government and to improve China’s image with the American people. The proposals, dubbed the “China Plan”, were prompted by the United States Congress’s successful lobbying of the president to grant a visa to Taiwan President Lee Teng-Hui. United States Secretary of State Warren Christopher had previously assured his Chinese counterpart Qian Qichen that granting a visa would be “inconsistent with [the United States’] unofficial relationship [with Taiwan]”[3] and the Clinton Administration’s acquiescence to the Congressional resolutions led China to conclude that the influence of Congress over foreign policy was more significant than it had previously determined. When formulating the so-called plan, Chinese officials acknowledged that, compared to other countries, it had little knowledge of, or influence over, policy decisions made in Congress, which had a sizeable pro-Taiwan faction under the influence of a more established “China Lobby” run by the Kuomintang.[2]
The plan, according the Senate report, instructed Chinese officials in the U.S. to improve their knowledge about members of Congress and increase contacts with its members, the public, and the media. The plan also suggested ways to lobby United States officials.[2]
Over the years, China has repeatedly denied these lobbying efforts involved financial contributions of any kind:
[S]ome people and media in the United States speculated… about so-called participation by Chinese individuals in political donations during the U.S. elections. It is sheer fabrication and is intended to slander China. [China] has never, nor will we ever, use money to influence American politics — China’s Foreign Ministry spokesman, May 1998.[4] …”
[S]ome people and media in the United States speculated… about so-called participation by Chinese individuals in political donations during the U.S. elections. It is sheer fabrication and is intended to slander China. [China] has never, nor will we ever, use money to influence American politics — China’s Foreign Ministry spokesman, May 1998.[4] …”
http://en.wikipedia.org/wiki/1996_United_States_campaign_finance_controversy
Why all the rush now to bail out foreign countries whose financial institutions bought “troubled assets”?
Who is pulling the trigger on the financial crisis?
Why was the trigger pulled now?
Defeat the cram down bailout bill.
Only you can prevent socialism in America.
“We are only beginning to understand on how subtle a communication system the functioning of an advanced industrial society is based–a communications system which we call the market and which turns out to be a more efficient mechanism for digesting dispersed information than any that man has deliberately designed.”
~Friedrick A. Hayek, ‘The Pretense of Knowledge’, New Studies, page 34.
“The effective limitation of power is the most important problem of social order.”
~Friedrick A. Hayek, The Political Order of a Free People, page 128.
What is going on?
~Marvin Gaye “What’s Going On / What’s Happening Brother
Background Articles and Videos
Sovereign wealth funds explained – Newsnight video
Corporate Advisory Insight: Sovereign Wealth Funds
http://www.youtube.com/watch?v=qFIyqhUejqc&feature=related
Lee Kuan Yew on Singapore sovereign wealth fund
Davos Annual Meeting 2008 – Sovereign Wealth Funds
LOL
Bird & Fortune: George Parr, Conservative MP
Sovereign wealth fund
“A sovereign wealth fund (SWF) is a state-owned investment fund composed of financial assets such as stocks, bonds, property, precious metals or other financial instruments. Sovereign wealth funds have gained world-wide exposure by investing in several Wall Street financial firms including Citigroup, Morgan Stanley, and Merrill Lynch. These firms needed a cash infusion due to losses resulting from the subprime mortgage crisis.
Some sovereign wealth funds are held solely by central banks, who accumulate the funds in the course of their fiscal management of a nation’s banking system; this type of fund is usually of major economic and fiscal importance. Other sovereign wealth funds are simply the state savings which are invested by various entities for the purposes of investment return, and which may not have significant role in fiscal management.
The accumulated funds may have their origin in, or may represent foreign currency deposits, gold, SDRs and IMF reserve positions held by central banks and monetary authorities, along with other national assets such as pension investments, oil funds, or other industrial and financial holdings. These are assets of the sovereign nations which are typically held in domestic and different reserve currencies such as the dollar, euro and yen. Such investment management entities may be set up as official investment companies, state pension funds, or sovereign oil funds, among others.
There have been attempts to distinguish funds held by sovereign entities from foreign exchange reserves held by central banks. The former can be characterized as maximizing long term return, with the latter serving short term currency stabilization and liquidity management. Many central banks in recent years possess reserves massively in excess of needs for liquidity or foreign exchange management. Moreover it is widely believed most have diversified hugely into assets other than short term, highly liquid monetary ones, though almost no data is available to back up this assertion. Some central banks have even begun buying equities, or derivatives of differing ilk (even if fairly safe ones, like Overnight Interest rate swaps).[citation needed] …”
http://en.wikipedia.org/wiki/Sovereign_wealth_fund
Sovereign Wealth Funds Threat to United States Economy
China Investment Corporation
“The China Investment Corporation (CIC) is responsible for managing part of the People’s Republic of China’s foreign exchange reserves with $200 billion United States dollars of assets under management, which makes it the fourth largest Sovereign Wealth Fund.[1][2] This sovereign wealth fund officially began operations on Saturday, September 29, 2007. It bought a US $3 billion stake of Blackstone Group in June[3] and a 9.9% stake of Morgan Stanley worth US$ 5 billion on December 19, 2007.[4][5][6]
The People’s Republic of China has US $1.7 trillion in currency reserves. The China Investment Corporation was established with the intent of utilizing these reserves for the benefit of the state, modeled according to Singapore’s Temasek Holdings. The state-owned Central Huijin Investment Corporation was merged into the new company as a wholly-owned subsidiary company.[5]
“…The Corporation aims to invest in around fifty large-sized enterprises across the world. Special treasury bonds were issued to create the capital that the CIC needed. 1,550.35 billion yuan ($207.91 billion) was issued in this bond sale. The bond process was completed in December 2007.[7] According to Lou Jiwei, the CIC needs to make a profit of 300 million Yuan every day just to pay the interest on the bonds and operation costs. The CIC paid its first interest on the bonds in February 2008 where it paid 12.9 billion yuan.[8] …”
http://en.wikipedia.org/wiki/China_Investment_Corporation
Sovereign Wealth Funds and U.S. National Security
by Daniella Markheim
“…In the 1990 decade, and early 2000 decade, hedge funds flexed their muscles, demonstrated their power, and earned both respect and animosity. Hedge funds have been blamed for several effects, like pushing up crude oil prices via speculation, even aiding and abetting the mortgage finance bubble. They grew in size to 9000 funds controlling $1.6 trillion in total. They stand first in line for carnage, having taken huge losses in the mortgage bond and Collateralized Debt Obligation (CDO) bond debacle. Most have suffered losses, while the great minority of smarter ones have profited on the opposite side of trades. In the process, hedge funds generally have lost a great deal of collective power, in a tarnished image. Meanwhile, the SWF funds have taken over as the prominent funds in the news, making their presence felt. In their arena, being entities connected and funded by major governments, they are huge in size. The SWF funds are the sharks operating in the ocean of liquidity, much fewer in number than the thousands of hedge fund minnows. Many hedge funds are over $1 billion in size though.
ONE COULD CONCLUDE THAT FOREIGN INSTITUTIONS HAVE BEGUN TO SHUN US$-BASED BONDS. CENTRAL BANKS ARE INCREASINGLY TURNING TO SOVEREIGN WEALTH FUNDS AS PROFITABLE INVESTMENT VEHICLES. SWF FUNDS ENABLE A CHANGE IN COURSE, ONE WHICH THREATENS US BANKERS TO THE EXTREME. UK BONDS ARE IN THE SAME SEWER PIPE AS THE US BONDS. AFTER SWF FUNDS BUY UP BIG SLICES OF US BANKS, THEY CAN PURCHASE GOLD FREELY AND PULL THE DOG CHOKER ON US BANKERS IF NEED BE, RESTRAINING THEM. …”
http://www.marketoracle.co.uk/Article3388.html
What to do about big, foreign funds that are buying up the West?
“…The biggest sovereign wealth funds “are owned by West Asian oil-producing countries, other oil producers such as Norway, and big Asian exporters such as China and Singapore….[O]il-rich West Asian nations and Russia as also large exporters such as China have been deploying part of their huge foreign-exchange reserves in sovereign [wealth] funds as investment vehicles that have grown significantly in size.” However, with all that cash moving around the global marketplace, some “rich nations, including Germany and the U.S., have…expressed uneasiness [since their governments believe that] these funds may be investing in their economies for political purposes.” Such governments are shocked – shocked! – by the notion that money might ever be used to influence the tone or direction of their policies. …”
“…We are starting to get wind of who the winners and losers are in the government seizure of Fannie Mae and Freddie Mac. It is not a pretty picture. Holders of mortgage-backed debt of the two companies, so called agency debt, and holder of subordinated debt are the big winners. Why? Government cash investments will be paid behind the payments to the mortgage-backed and even subordinated debt. Any threat of a default and the government will make the payments on the debt. Who holds this stuff. The largest holders of agency debt are 1) foreign countries through state owned banks and through sovereign wealth funds and 2) a worldwide network of private banks and 3) United States pension funds. The largest foreign holdings of agency debt are China ($400 billion) and Japan (($230 billion). We are bailing out China and Japan, the world’s investment banks, and our pension funds. Who is hurt?? Shareholders. The government gets paid back before any preferred shareholders and common shareholders get any dividends. Some shareholders are also holders of agency debt and do not mind; their gains on the debt side will swamp their loses on the stock side. Some American investment banks and many pension funds are in this category. But there are some banks that hold predominately preferred stock, most of them are regional banks or commercial banks, and they are big losers. Shares are held in the public markets and usually in diversified portfolios.
Shareholders should lose (they are the residual claimants and they elect the board) but so should the debt-holders, particularly the subordinated debt holders (they took a risk of buying an instrument very similar to preferred stock). Many debt holders have written down the value of their debt and now, suddenly, it is worth 100 cents on the dollar. Why bailout foreign governments and why now — both companies had reserves — thin ones — and could have run on their own for another year or so?
The answer is political, regrettably. Treasury did not want a blowup with China and Japan before the election and it wanted to create another method of subsidizing the economy (through Frannie and Freddie) that would take effect before the election. China threatened to sell not only agency debt but Treasuries and it would roil our debt markets; tight debt markets hurt GDP. This threat is one we need to stand up to (emergency tariffs on Chinese goods are WTO legal). …”
http://www.sfgate.com/cgi-bin/blogs/sfgate/detail?blogid=15&entry_id=30088
Chinese Government is Top Foreign Holder of Fannie Mae, Freddie Mac Bonds
$376 Billion in Chinese Agency Bond Holdings Subject to Taxpayer Bailout Proposals According to FreedomWorks Analysts
“…The top five foreign holders of Freddie and Fannie long-term debt are China, Japan, the Cayman Islands, Luxembourg, and Belgium. In total foreign investors hold over $1.3 trillion in these agency bonds, according to the U.S. Treasury’s most recent “Report on Foreign Portfolio Holdings of U.S. Securities.”
FreedomWorks President Matt Kibbe commented, “The prospectus for every GSE bond clearly states that it is not backed by the United States government. That’s why investors holding agency bonds already receive a significant risk premium over Treasuries.”
“A bailout at this stage would be the worst possible outcome for American taxpayers and mortgage holders, who have been paying a risk premium to these foreign investors. It would change the rules of the game retroactively and would directly subsidize the risks taken by sophisticated foreign investors.”
“A bailout of GSE bondholders would be perhaps the greatest taxpayer rip-off in American history. It is bad economics and you can be sure it is terrible politics.”
Mike Pence Opposes Bailout 9/29/08
We Are Under Martial Law! As Declared By The Speaker Last Night! Rep Burgess
Michael Savage Argues About Financial Bail Outs Crooks on Wall Street – (9/29/08)
The Senate votes: Crap Sandwich 2.0 with sugar on top passes 74-25
By Michelle Malkin
http://michellemalkin.com/2008/10/01/the-senate-votes-crap-sandwich-20/
Who’s afraid of sovereign wealth funds?
By Tim Weber
“…Sovereign wealth funds – government-controlled investment funds – are one of the hottest topics at the World Economic Forum in Davos. But are they really dangerous?
Richard Fuld says the funds could soon control up to $20 trillion |
Picture this: You are finance minister and several very large banks in your country are in trouble. An investment fund steps into the breach and provides the much-needed cash – say $10bn (£5bn) or thereabouts. It helps to avoid a financial meltdown.
So far so good. But what if this fund is controlled by a foreign government with unclear intentions? What if such a fund also wants to buy your nation’s most important ports?
And what if the fund takes a large stake in a business that is a rival to its country’s national champion?
Across the Western world, politicians are grumbling, and economists and business leaders are pricking their ears. …”
Economists on the Bailout
By Justin Wolfers
US Economy: Even Hank Paulson’s bail-out plan cannot detox global banking
The world’s central banks, led by the U.S. Federal Reserve, announced a $330 billion expansion of currency swap arrangements, which allows them to increase the amount of money they can provide in their home markets, effectively throwing more money at the crisis.
Earlier, the governments of Belgium, the Netherlands and Luxembourg moved to partly nationalize Belgian-Dutch group Fortis NV with an injection of more than $16 billion, and German lender Hypo Real Estate Holding AG secured a credit line from the German government and banks of up to 35 billion euros.
British mortgage lender Bradford & Bingley Plc was brought under the government’s wing, shares of French bank Dexia tumbled on a report that it might need emergency capital, and bank rescue deals also emerged in Iceland, Russia and Denmark.
“The contagion is spreading to mainland Europe and everyone’s asking, ‘Who’s next?'” said Mark Sartori, head of European sales trading at Fox-Pitt, Kelton in London.
The Wachovia deal is the latest in a series of events that has transformed the American financial landscape and wiped out hundreds of billions of dollars of shareholder wealth.
The changes include the government takeover of mortgage finance companies Fannie Mae and Freddie Mac, the bankruptcy of Lehman Brothers Holdings Inc, the failure of giant savings and loan Washington Mutual, and Bank of America Corp’s purchase of Merrill Lynch & Co Inc. …”
Largest sovereign wealth funds
Defeat the Cram Down Bullshit Bailout Bill: Emergency Economic Stabilization Act of 2008
Bailout Bill vs. Rescue Economy American People (REAP) Law
The American People Want A Full Meal Buffett Deal–Not A Bailout!
Stop The Bailout: The American Elites’ Bum Rush of The American People–No Sale!
Obama Bombs Bailout Meeting–Whitehouse Still Standing–McCain Saved By House Republicans
Obama–ACORN–CRA–Congress–Democratic Party–Fannie Mae–Freddie Mac–Bailout–Socialism– Just Say No!
ACORN–Association of Community Organizations for Reform Now–Obama’s Red Shirts
Pronk Palisades 
