North West Florida Republican

This is still a big story. It probably will be for quite some time. Especially since Paulson has switched from helping troubled financial institutions that have bad home loans to other troubled areas such as credit card companies like American Express. Read the post by Allahpundit over at Hot Air for more on the Bailout.

It seems that everyone who is in trouble financially is asking for a hand out and is getting it. This isn’t what Congress had in mind when they initially authorized the $700 billion dollar bailout. Something that is going completely against free markets.

We also have unions asking the government for money and getting it. That’s right. Taxpayer money is going to the UAW to pay for their pension plan to the tune of $25 billion dollars. The big three are asking for an additional $25 Billion to help with this.

The UAW plans to seek an additional $25 billion in public funds to cover the first payments to a union-run trust that will take over retiree pensions and health benefits from the car companies. Alan Reuther, the union’s legislative director, said this aid could help free up additional lending to the automakers. Washington Post

This is the same money that the three big auto makers said they needed to retool and create more fuel efficient cars in a competitive market. Something that they should have been doing for years already.

This is all on top of pouring money into black holes such as AIG to the tune of $150 Billion with another $150 Billion asked for by AIG.

Now everyone who has any problem with finances is lobbying their Congressmen to gain a portion of the pork pie. Where will it stop?

As long as the government continues to allow money to flow freely the Bailout will continue to grow. This is akin to throwing money into a big hole.

In The Know: Should The Government Stop Dumping Money Into A Giant Hole?

A couple of things will probably happen while we are working to “bailout” the economy. Inflation will increase due to the massive amounts of money being injected into it by the Government. Taxation will increase to help pay for dumping money into these failing institutions and keep inflation as low as they can. Unemployment will probably rise as these institutions fail even after they have been bailed out.

In addition to all of this. The Bailout that Congress approved also amounted to a massive tax break by repealing a law meant to close a loophole used to avoid taxes. The Treasury Department slipped this in at the last minute and was completely missed in the rush to get something passed.

In the midst of this late-September drama, the Treasury Department issued a five-sentence notice that attracted almost no public attention.

But corporate tax lawyers quickly realized the enormous implications of the document: Administration officials had just given American banks a windfall of as much as $140 billion.

The sweeping change to two decades of tax policy escaped the notice of lawmakers for several days, as they remained consumed with the controversial bailout bill. When they found out, some legislators were furious. Some congressional staff members have privately concluded that the notice was illegal. But they have worried that saying so publicly could unravel several recent bank mergers made possible by the change and send the economy into an even deeper tailspin.

“Did the Treasury Department have the authority to do this? I think almost every tax expert would agree that the answer is no,” said George K. Yin, the former chief of staff of the Joint Committee on Taxation, the nonpartisan congressional authority on taxes. “They basically repealed a 22-year-old law that Congress passed as a backdoor way of providing aid to banks.” Washington Post

Where are the blue dog democrats now that there seems to be a blank check for Paulson that they voted for. What would Congressman Allen Boyd say about his vote for this bailout now?

Filed under: National Politics