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Dustin LindenSmith

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on the fed bailout

I'm having a hard time swallowing this $700 billion bailout package that's being proposed to avoid the supposed collective financial ruin in the US. I'm not convinced that criminal malfeasance hasn't been conducted somewhere along the line here that has caused these major financial institutions to fail. In no small part because of that, I'm also far from convinced that the US taxpayer at large should shoulder the responsibility for saving these bad debts. Isn't there a way to bolster financial support for these banks while simultaneously penalizing their managers etc. financially and restructuring the system in general?

I'd also have a lot less objection to this package if, instead of bailing out the banks, it went towards the people who are losing their homes due to foreclosure, etc. I know that many of these folks were sold mortgages for which they never should have been approved, but why are they less deserving for federal financial aid than these enormous banks which are run by extremely wealthy people who, no matter how much they've lost on paper in the past week, are sure to weather these financial storms just fine themselves?

Furthermore, I'm not really all that averse to bad things happening to the banks, anyway. Despite how painful it might be in the short term, I'd support in principle anything that would catalyze a paradigm shift in the way our economy is structured worldwide; in other words, anything that would topple systems that unfairly benefit the small groups of rich and powerful people over the larger groups of poor and powerless people. In some ways, the banking sector might as well be as good a place to start those kinds of reforms than anywhere.

On a seemingly unrelated note, I heard something about how Obama wants to increase taxes for families whose income exceeds $250K per year, and decrease taxes for middle-class Americans. Despite McCain's insistent whining that this would bring about the worst recession in history by supposedly choking off economic growth, I really can't see any huge downside to this plan. I've always thought in principle that there must be a way to realign the tax burden in the West, such that families with significantly higher incomes than the norm (ironically, I also used the $250K income level as my cutoff) could take on a higher portion of the taxes. Honestly, once you start making that much money (and forget about people making more and significantly more than $1 million each year), it's not a huge deal to carve off larger portions of it for tax purposes. I know it's against a lot of people's core values, but the Canadian in me finds the concept admirable.

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savia September 22nd, 2008
Amen.

The banks should be punished for predatory lending, not the taxpayer.

jdquintette September 22nd, 2008
I've always thought in principle that there must be a way to realign the tax burden in the West, such that families with significantly higher incomes than the norm (ironically, I also used the $250K income level as my cutoff) could take on a higher portion of the taxes. Honestly, once you start making that much money (and forget about people making more and significantly more than $1 million each year), it's not a huge deal to carve off larger portions of it for tax purposes. I know it's against a lot of people's core values, but the Canadian in me finds the concept admirable.

I'm not sure if you're being disingenious here. Are you not aware that income tax, when it was originally introduced during WWI was a "progressive" system, in which larger incomes were to be taxed at a higher percentage rate?

The logic was exactly as you say; it was thought that those with more should shoulder a proportionatley larger share. It's a lot easier to give up 10% of your income when you make a million a year than when you make 15,000.

Theoretically, all western nation still tax income progressively, but since we've had several decades of neoconservative pressure groups advocating the deconstruction of this system it's sometimes easy to lose sight of that.

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mimesis September 22nd, 2008
i agree.

to quote someone, somewhere... "privatizing huge financial gains and socializing huge losses" -- when did this become the best the US can do?

as if i can afford to help out these huge corporations? wtf?

iamom September 22nd, 2008
That is the BIGGEST problem with this, I think -- he profits are privatized and the losses are socialized. Unconscionable!!! There should be a citizen's general tax revolt, really. People should be in the streets!

(I'm only half-kidding. It's truly reprehensible, this whole thing.)

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