Is GM a Prelude to America's Future?

Mr. Obama, Pelosi and Reid have already outspent the federal government’s ability to fund itself and the national debt without massive tax increases. And this fiscal depravity doesn’t include their pending national healthcare, amnesty and green energy schemes.

The bad news is just beginning. Be prepared for a barrage of defaults in the commercial real estate sector. Naturally Obama will guarantee that the taxpayers backstop the hemorrhaging, which will put the government’s head under the commercial property tent.

Equal Lending Opportunity legislation and the creation of Freddie Mac and Fannie Mae sure worked well for home mortgages. So expect the taxpayers to soon be paying the rent for companies whose aspirations were greater than their business plans.

To that, add the new government guarantees for loans approved by bureaucrats in the Small Business Administration. The borrowers and banks no longer have any skin in the game. This scheme has all the merit of putting the leftwing scoundrels running ACORN (or Barney Frank) in charge of the Internal Revenue Service.

Now consider the additional 77 million people who will be enrolled in Medicare and Social Security in the next few years. These programs will collapse under their own weight without an enormous infusion of tax dollars.

The United States is on the edge of an economic cliff and Obama tells us to trust him, things are improving. This is true if the goal of the nation is to reinvent itself as a mediocre socialist state. The overt acts of Obama, Pelosi and Reid have undermined the sovereignty and security of the nation they inherited.

No amount of happy talk is going to delay the fiscal reckoning. These three miscreants have deliberately and with malice toward capitalism deeded the nation’s future to the government monopoly of wealth.

This is exactly where Obama, Pelosi and Reid are driving the country. The government now controls the financial institutions. Obama and friends just announced they will soon issue directives detailing the pay of employees in financial institutions.

They have the power to define credit worthiness and decide loan eligibility. Loans will be based on how they affect the government’s master plan and on the borrowers’ political allegiance. Earmarks pale by comparison to this pork barrel. Corruption Central, here we come.

Their plan even includes banks that required no government bailout. Why? To avoid the mass migration of management from government controlled banks to the private sector.

The liberals see this plan generating the same slobbering support of big government as is found in the rank and file of government bureaucrats. Is there any doubt that pay raises will be determined by political obedience?

If the federal government remains on this current track, private enterprise will be extinguished. Personal initiative and freedom of speech will be outlawed as anti-social. It was once stated that what is good for General Motors is good for the nation. That’s was never true, but now that GM is owned by the government, it’s a prelude to America’s bleak future.

Can Congress be Stopped?

Rarely, only rarely, do politicians bare their souls. Senator Biden had one of these moments when he related patriotism to the duty of Americans to pay higher taxes. His candor defined the politics of national decline.

Biden’s solution: Pad all government accounts to compensate for its reckless abandonment of fiscal sanity. It’s not a solution; it’s an endorsement of the status quo. He believes that buying oats for a dead horse will miraculously turn it into a thoroughbred.

Senator McCain was correct when he said the fundamentals of the American economy are sound. America has the infrastructure, the intelligence, the capital, the willingness and a tradition of solving problems.

There is only one question that needs answering. Can Congress be stopped from interfering with our economic success?

Long term recovery and sustainable economic growth is dependent on government staying out of the pockets of business, and business staying out of the government’s pocket. The margins between these entities have been blurred by decades of legislation which has created an unhealthy dependency.

Now add social engineering to the mix. The Department of Housing and Urban Development (HUD) was created by the Democrats to encourage banks to approve the mortgages of unaccredited borrowers. Freddie Mac and Fannie Mae were created to buy the worthless mortgages that the banks would have otherwise refused to approve.

In effect, the government licensed mortgage brokers to pillage over a trillion dollars from the US Treasury to promote housing welfare. Don’t blame the regulators. Send your heart felt thanks to the Democrats for your generosity. Now watch them scramble to control the distribution of the funds.

The bailout will soon become history’s greatest political slush fund. Of course, the Democrats will blame the bankers and paint the need for a bailout as a shared responsibility. That’s code for sticking every single American with a $2300 bill for yet another failed income redistribution scheme.

This fits the Standard Operating Procedure of the Democratic Party: Throw good money after bad. And for the record, President Bush will sign their legislation because he doesn’t have a backbone and his advisors all live on Wall Street.

To keep America’s credit lines healthy, temporary funding should be used to bolster the reserves of the thousands of financial institutions that remained faithful to the public trust.

The nation is in jeopardy because liberals believe government is the source of prosperity. Democrats believe that taxation creates opportunity. Follow this arrogance to its logical conclusion, and taxes can never be high enough. Senator Biden confessed his belief that if government is revenue rich then everyone will live happily ever after.

The current US tax code is a precursor to the nation’s obituary because it is used to grant special treatment. It’s the official log of business buying favors from a Congress that trades its influence for our affluence.

Senator Biden’s moment of honesty pinpoints the cause of our nation’s economic stagnation. Whether the Democrats are debating healthcare, education or energy their goal is the same. They want to expand and retain the power of government. And that is what’s rotting America’s economic fabric.

Overpaid Criminals

When the only criterion for getting a home loan is having a pulse, no one should be surprised that the financial market is in chaos. Who would have guessed that lending money to non-credit worthy borrowers would result in delinquent loans?

The Equal Lending Opportunity legislation defied common sense. It broke the cardinal rule of banking by demanding lending institutions ignore the collateral, credit and employment history of the borrowers. Nor could the geographic location of the property be taken into consideration.

The financial community obliged these federal mandates with gusto. With quasi-government corporations like Freddie Mac and Fannie Mae buying up the new mortgages, the original lenders had no downside to approving loans. Better yet, selling the worthless paper freed their credit lines to issue more mortgages.

Sub-prime and interest only loans were introduced and promoted to broaden the field of potential home owners (read new mortgages). This fueled the construction industry’s surge. The demand for housing inflated property values, which in turn inflated the stock value of the companies buying the mortgages.

The merry-go-round stopped. Thousands and thousands of credit-worthy buyers are sitting on properties whose values have since plummeted. Their mortgages are greater than the property value. This depreciated the reserves of lenders which underpin their ability to lend, to survive. The depth of this problem has yet to unfold, but expect more bankruptcies.

To add insult to injury the homes of most Americans have been devalued by the number of anxious sellers. The market is flooded with inventory. Experts don’t see this problem solved in less than four years.

The executives at Fannie Mae, Freddie Mac, AIG, etc. knew it was a Ponzi scheme. The early stockholders were paid off with money put up by the later ones. The system collapsed when they ran out of people willing to plunge into the inflated market. They ran out of stupid buyers.

Now the public is told that there is no criminal liability. No one in government, in financial institutions or in the SEC can be held accountable. The taxpayers are expected to believe that this fiasco came as a surprise to the government and the financial community. In a pig’s eye!

Greed is criminal when the participants, with full knowledge of the harmful consequences, pursue deceptive strategies to entice investors. Does anyone with an IQ higher than a cup of mud believe the past and present executives of these companies aren’t bandits?

The US Attorney General should rip the covers off these companies. If they don’t find proof of criminal intent it means one thing. Some important people in government colluded and benefited personally. It’s a cover-up. And if there is no serious investigation, be assured that members of Congress and the Executive branch are in this up to their necks.

The failure of Lehman Brothers, AIG, Freddie Mac, Fannie Mae and many more to come substantiate that when stupid is given what stupid wants the nation always pays the price.

Equal Opportunity Lending is welfare masquerading as monetary fairness. It’s not equal because it penalizes every citizen who makes responsible decisions. These folks will face tighter credit, reduced home values and higher taxes for a decade to compensate for the trillion dollars the government squandered in the name of fairness.

The Democratic solution offered by Rep. Barney Frank: Use more tax dollars to bail out every investor and every home buyer whose poor decisions got them into trouble. The liberal definition of shared responsibility: Protect the criminally stupid and the criminals.