Bailout Petition - Thank You
- Hi, All,
Just a little bit of the behind-the-scenes events which we didn't hear
much about, and which unfortunately suggests there is a lie to the idea that
this is to help the ordinary taxpayer. This below could have put the repay
burden on those who are running off with most of the money. What do we all
think this has really done to help any of us?
Issue October 03, 2008 - http://sanders.senate.gov
Thank you for co-signing a letter to Treasury Secretary Henry Paulson urging that any bailout be fiscally responsible, include a major recovery package, re-establish obviously needed regulation of financial institutions, and end the dangers posed by companies that are too big to fail.
I was amazed, and greatly heartened, by the tremendous number of people who signed the letter. When we delivered it to the secretarys office Wednesday, it had more than 48,000 signatures, including yours.
Unfortunately, Wednesday was also the day that the Senate passed a bailout package. Because it did not have the strong provisions we called for in our letter to Secretary Paulson, I voted against the bailout.
Before the Senate passed the bill, there was a vote on what was probably the key provision in our letter: a five-year, 10 percent surtax on income over $1 million a year for couples and over $500,000 for individuals. That would raise more than $300 billion in revenue over five years, but wouldnt cost 99.7 percent of taxpayers a single penny. On the Senate floor, I talked about our letter. (To read about it or watch excerpts, click here or here.) I talked about how the bailout of Wall Street banks and financial firms should be paid for by those who benefitted from the greed and excess of Wall Street, not by middle-class Americans. I am sorry to report that the amendment did not pass.
This is not the end of our fight, but the beginning. I look forward to working with you again as we move forward in asserting that the needs of our nations middle class, its working families, should come ahead of the needs of the financial services industry and those who profited off Wall Street excesses.
I would like to stay in touch. I hope you will be interesting in receiving occasional updates on what the federal government is doing and what it should be doing to address the serious economic and financial concerns ahead of us. If you prefer not to receive more of my e-mails (they will be modest in number), click the unsubscribe link at the bottom of this page.
Thanks again for co-signing the letter. You helped raise 48,000 voices of reason in an important national debate.
Nothing in all the world is more dangerous than sincere ignorance and conscientious stupidity. -- Martin Luther King, Jr.
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- --- In email@example.com, Julienne <julienne@...> wrote:
> Just a little bit of the behind-the-scenes events which we didn't hearAs is so often true in analyzing social problems, one of the main contributing causes of the subprime mortgage crisis is something to which the least attention has been paid. First, it is simplistic to believe that banks and other lenders have not recognized the risks of subprime mortgages; rather, they have always been very much aware of it. They have handled it by increasing the interest rates on those risky mortgages by several percentage points above the norm. So, if the usual bank rate is, say, 7%, a person with poor credit, a small down payment, and not-too-steady income can still get a mortgage, but will have to pay something like 9% or 10%. At first glance that seems about what you could expect, even though the increase in interest rate for the poor borrower is actually more than is needed to offset the risk.
> much about, and which unfortunately suggests there is a lie to the idea that
> this is to help the ordinary taxpayer. This below could have put the repay
> burden on those who are running off with most of the money. What do we all
> think this has really done to help any of us?
The real problem is what comes next. Instead of that extra money accumulating in a reserve fund to cover possible default (as is the case for premiums paid to insurance companies), the extra money has gone directly to investors in the form of dividends on their investment in mortgages and various mortgage-backed securities, as well as to the sellers of those products. So when default came en masse, there were no funds available anywhere to mitigate the loss facing the financial institutions. You can find much more detail about the problem in this web site:
Donald W. Zimmerman
Vancouver, BC, Canada