Proviso Probe: WARNING: bailout bill could deprive schools and local gov't of property tax revenue

[marmar]

Monday, September 29, 2008
WARNING: bailout bill could deprive schools and local gov't of property tax revenue

This weekend Congress and the Bush administration announced agreement on a bill to bailout financial sector companies that invested in mortgage-backed securities. The program is called the Troubled Asset Recovery Program (TARP). The current legislation is called the Emergency Economic Stabilization Act of 2008. See Washington Post (Lori Montgomery and Paul Kane). The cost of the initial legislation is $700 billion.

Seven hundred billion dollars is approximately $2,300 for every person in the country, including newborn babies, Alzheimer's patients and undocumented workers. If you divide the current national debt by the number of citizens, each person in the United States is already carrying approximately$32,300. See U.S. National Debt Clock. So, if this legislation passes your share of the national debt will be approximately $34,600.

The United States financial institutions have been troubled. So far this year the federal government has bailed out Bear Stearns ($30 billion), Fannie Mae and Freddie Mac ($200 billion) and AIG ($85 billion). See ProPublica.

The Emergency Economic Stabilization Act of 2008 could be catastrophic for school districts and other local government that relies on property taxes.

Mortgage-backed securities were assumed to be secure investments because they were backed by property. This has proven to be false for at least a few reasons.

1.Properties decreased in value, so the mortgage was worth more than the property in some cases.
2.Financial institutions are simply unable to sell all the properties upon which they foreclosed.
3.Some of the loans were fraudulent. The government and financial sector created a system whereby it was profitable to mortgage properties for amounts much higher than the true value of the properties. .......(more)

The complete piece is at: http://provisoprobe.blogspot.com/2008/09/warning-bailout-bill-could-deprive.html

[RUMMYisFROSTED]

1. Adding a trillion(s) to the debt necessarily effects all programs.

It would cost $30B+ yearly just to service that debt. That's almost double the amount of McCrackpot's earmarks.

[GetTheRightVote]

2. This is bad and I am sure there are other holes in this Bailout as well.

:grr: