Stacks Image 55538

Why should Tax-Payers
Bail Out the Banks?

Politicians seem to think that keeping large companies afloat is crucial. No matter how much of the tax-payer's money - your money - it takes, they mistakenly believe that the alternative of letting a bank go under is worse.

The Effectiveness of Bankruptcy

Header Underline
Yet any company that gets into severe financial trouble is bankrupt when it can't pay its debts. Then bankruptcy experts determine how best to salvage the situation. They restructure the entire company, let the dead wood die a natural death, keep the viable parts going, and save as many jobs as possible while ensuring the resultant company is healthy.

Wealthy bond holders, share-holders, and the unions don't like such failure, the bond holders and other rich debtors lose money while the unions lose member benefits, members, and power. So there are powerful forces at work with significant incentive to corrupt politicians into following deceitful policies.

Politicians pretend to do what's best for the country, yet instead listen to the loud screams from the bond holders and unions and bail them out using tax-payers' money.

Politicians may Sound Sincere and Convincing, But...

Header Underline
Many if not most politicians are experts at sounding sincere and convincing. To get your vote, they need to master this key to getting elected. Yet as the epigram says:

Honesty and integrity are crucial for success in today's world.
If you can fake these, you've got it made!

Sounding sincere and convincing does not mean they have any experience in wealth-creation. Nor in improving the economy. Nor as protection experts. It does not mean they are willing to bite the bullet and carry out unpopular policies which benefit all rather than just the few chosen ones. Their enormous efforts to be re-elected simply show how much they like power. And are prepared to do almost anything to keep it.

They just Want Your Vote

Header Underline
As Dr. Dan Mitchell of the Cato institute sagely notes in an article for the Wall Street Journal (subscription required):

"Politicians don't want any type of constraint on their ability to buy votes with other people's money."

So they pretend their policies will benefit you, even as they know the truth is the complete opposite. Today the National Debt share of every man, woman and child in the USA is north of $50,000. Yet you have nothing to show for it, while politicians of all persuasions keep the reckless spending going.

They pretend they want tax increases to pay down the debt, but instead keep spending. The more people dependent on government handouts, the more people they think will vote for them. Even some Nobel prize winning economists are part of the scam.

Are the Banks Too Big to Fail

Header Underline
Being skeptical about the path most politicians recommend is essential. They're either economically illiterate, or worse.

Many politicians maintain it's essential that the taxpayers - that's you - should bail out banks and companies in trouble (think Goldman Sachs, AIG, Fannie Mae, TARP, Chrysler, etc. ... ). You'll change your life when you understand this is just one egregious example of the economically illiterate misinformation most of them feed to their tax-paying voters.

When a company gets it wrong, the secret of success is to ask why should the taxpayer - YOU - have to pay for their mistakes? Iceland's voters refused to bail out their troubled banks which, of course, did cause some short-term problems.

Yet just three years later, the unemployment rate has fallen and Iceland's economy is growing. Other countries (Portugal, Ireland, Italy, Greece, Spain) have followed the bail-out path recommended by their politicians, and their problems simply continue. Julie Kozack, IMF mission chief for Iceland, admits:

"For a country whose entire financial system collapsed, Iceland is doing remarkably well."

And Iceland's voters are not saddled with enormous debts while the owners of the banks and their bond-holders, laugh all the way to, er, the bank.
For a more recent article on Iceland's success: Iceland Let Banks Fail, Jailed Criminal Bankers and Now Has Only 4% Unemployment, see

www.alternews.co.uk/2014/01/iceland-let-banks-fail-jailed-criminal.html


See this Cato report for Dan Mitchell Wall Street Journal article:

http://www.cato.org/publications/commentary/how-swiss-debt-brake-tamed-government


See this www.nlpc.org report for the IMF story on Iceland:

http://nlpc.org/stories/2012/05/22/iceland-recovers-bank-meltdown-without-european-bailout/


See here for the IMF mission chief for Iceland comment:

http://www.thestarshollowgazette.com/diary/4904/go-vikings

Food for Thought

Header Underline

"Mystical references to society and its programs to help may warm the hearts of the gullible but what it really means is putting more power in the hands of bureaucrats."

- Dr. Thomas Sowell, African-American economist, University Professor, syndicated columnist, prolific academic author

We fully guarantee everything. These time-tested secrets of success are delivered electronically - no waiting for delivery. Discover the truth about overcoming your self sabotage, stop reacting and arguing, find out why resistance doesn't work, and change your life.

     |        |