As most of you have realized, I have generally given up on "preemptive postapocalyptist" posts here at the Technodojo, mostly because I was only sounding crazy to my family and friends and not really giving any answers to anything (as well as just depressing myself). Those of you unlucky enough to read Scantabulous back when it was an actual website (before it got 90% if its content lost inexplicably by the hosting provider -- causing me to turn to blogspot) and not a blog will know what I'm talking about most of all. But since then I've been focusing on posting only things I like about light-hearted, nerdy stuff, like Star Wars and D&D, mostly to distract myself from the coming economic crash (and because my personal preparations were mostly ready).
But then I was watching Meet the Press with Dr. Girlfriend today, and Tom Brokaw mentioned that the "Bail-out" proposal was only three pages long when talking to Bernake. Surprisingly, he didn't read a word of it or ask Bernake about it other than saying "700 billion" a couple of times, but instead they focused on why America needs it so much and went about selling it to the viewers at home. No one really gets concerned when ridiculously large numbers are thrown around by the government, I think because we just kind of consider everything on the government scale is big. So if "700 billion" is the worst thing about the "bail-out," then who cares (note I keep saying bail-out only because that's whats used on TV all the time, and so folks reading will know what I'm talking about, thus the "quotes". Plus its shorter than constantly referring to the "Legislative Proposal for Treasury Authority to Purchase Mortgage-Related Assets," which is its real name.)
Since it was evidentally written in the four days after AIG took a dump and sent to Congress Friday (Sept. 19), and Congress is expected to approve it by this upcoming Friday (Sept. 26), I figured it was worth a look (and its only three pages, which is about all my video-game/television-burned out brain can handle reading in one sitting).
Anyways, sitting in my undies and drinking some coffee, I went to the ol' PC and looked 'er up. I figured that while I'm no lawyer, I've been reading complicated scientific documents and FDA-legalese regularly for almost a year now, I should be able to spot some of the more obvious loopholes or double-talk that accompany such a hastily-written document, and it should be good for a laugh.
What I found was clearly-stated, blatant, and completely unbelievable.
First, here's a link to what Congress is expected to pass in five days (note that I'm linking to CNN Money and not linking to the .gov site because I'm still that paranoid little blogger). If you want, print that sucker out (its only 3 pages, in big font!) , grab a highlighter or pen, and mark sentences that seem a little ominous. You'll be really amazed by how much ink you use by the end. But for the rest of you, I'll point out the really, really juicy stuff:
Sec. 2. Purchases of Mortgage-Related Assets.
(b) Necessary Actions.--The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation:
(2) entering into contracts, including contracts for services authorized by section 3109 of title 5, United States Code, without regard to any other provision of law regarding public contracts;
(3) designating financial institutions as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them;
Wait....what?! Read #3 again. Any banks, credit unions, or "finanacial institutions" can become property of the government. Err...uh, that means that the money in your savings account can be spent by the government as it sees fit. You think you complain about taxes now? How about if after you pay your taxes your savings account can be withdrawn from to pay for "bridges to nowhere" and child welfare benefits for someone's eleventh kid.Hey, and how about #2. Super no-bid contracts baby! Those have really worked for us in the past, right? So they can pay those overpaid contractor entities with money from your personal bank account now! Genius!
Oh, but don't worry. They recognize the severe powers of Section 2, so they added Section 3 to prevent the appearance of overstepping their bounds:
Sec. 3. Considerations.
In exercising the authorities granted in this Act, the Secretary shall take into consideration means for--
(1) providing stability or preventing disruption to the financial markets or banking system; and
(2) protecting the taxpayer.
That's it. That's the entirety of Section 3. The Secretary shall "take into consideration means for protecting the taxpayer"... and its not even #1! (1) is protecting the banking system! So if banks are in trouble, they'll protect the banks (by not allowing you to withdraw your money, or more likely, putting a cap on the amount you can withdraw/spend out of it each month). And this isn't "A Wonderful Life" bank style protection, where your money is in your neighbor's farm (reference pointed out by Brando), its the bad kind of protection, where your money doesn't really exist anymore because it was lent out to someone who could never, ever pay it back so the bank manager could increase his stock price and create intangible "money."
Oh, here's the part about the 700 billion clams:
Sec. 6. Maximum Amount of Authorized Purchases.
The Secretary's authority to purchase mortgage-related assets under this Act shall be limited to $700,000,000,000 outstanding at any one time.
At any one time. What does that mean? It means this thing is open-ended in its financial spending capability. The Treasury Secretary (who's looking more and more like some sort of financial Emperor) can only spend in chunks of $700,000,000, before he has to...what, exactly? Who makes sure he can't spend anymore than that a second time? Oh, wait, here we go, Section 8: Review. Now we'll see who has oversight on this joker:
Sec. 8. Review.
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.
Ah, good. So that clears that up. Any decisions the Treasury Secretary makes are completely unfettered by oversight. Well, you know, if you're going to spend taxpayer money, well, and non-taxpayer money, and money that isn't taxed -- basically all money (see Section 2.b.3) -- you don't need to be constrained by "approval" and "laws." Just spend away and NEVER EVER be questioned about it, or ever make your decisions known (publically or non-publically -- not even to Congressional "task forces" or the Justice Department).
But wait, there is one limit to the spending, the maximum public debt cap! Ah, thank goodness, Congress decided to cap total public debt in the 80s and, while they've increased that amount occasionally, its limited to about 9 trillion bucks. Wait, what's this...
Sec. 10. Increase in Statutory Limit on the Public Debt.
Subsection (b) of section 3101 of title 31, United States Code, is amended by striking out the dollar limitation contained in such subsection and inserting in lieu thereof $11,315,000,000,000.
Oh. An extra two-and-a-half trillion (then they'll be able to start spending whats in your savings account)? So it should be called the "2.5+ trillion-dollar bail-out" I guess. But that goes back to huge numbers that don't mean anything to people anyway. Seven-hundred billion probably sounds like more money anyways.
That's all I can take for now. In one weeks' time Congress is going to fast-track this sucker to approval and all your savings accounts, checking accounts, mutual funds, and whatever else will be fully open to government spending. I can't wait for the inflation rate to soar out of control after so much government-spendable dollars are "created."
Enjoy your new completely broken financial system, America! Wheeeee!
Anybody got a different take on this?