While we were all looking the other way, enjoying our moment of a victorious election, your U.S. Treasury Department has been cooking up more schemes to spend your tax dollars on bailing out banks. Today’s New York Times top story, misleadingly titled “U.S. Shifts Focus in Credit Bailout to the Consumer,” reveals Paulson’s strategy to continue funneling money into banks, and refusing to provide any relief for homeowners. He categorically rejects any use of the TARP funds for mortgage relief, and apparently has cut off talks with Sheila Bair, head of the FDIC, to provide homeowners with some real options.
But that’s not all. Now, Paulson says, in addition to propping up mortgage lenders, we are going to need to prop up credit card issuers. Paulson’s brilliant plan to help consumers is to “invest about $50 billion from the bailout fund into the new loan facility, with the aim of helping companies that issue credit cards, make student loans and finance car purchases.” In other words, your government intends to create additional capacity for credit cards companies to increase the “liquidity” they have available to extend more credit to us consumers. And then to guarantee the debt to the banks using our tax dollars.
Haven’t they been paying any attention? Is there anyone who still believes, honestly, that spending more money is the best way to get us through this economic downturn? On credit cards? Really? What are they putting in the water over there? This is the Secretary of the Treasury proposing this! It really would be funny if it weren’t so thoroughly despicable.
The only people who stand to gain from this proposal are the very bankers and Wall Street investors who created this whole mess. It seems as if the Bush administration is intent on pumping as many dollars into the coffers of their buddies before they leave office as they can possibly manage, leaving all of us to pay the consequences. This is truly an absurd idea, that we should make additional credit card dollars available, but we should absolutely refuse to provide any relief for people who are behind on their mortgage payments. I wish I could tell you how many of the people I meet with are having to decide whether to pay a credit card or pay their mortgage each and every month — more credit card debt is not the answer.
At least credit card debt is generally something I can help with in a bankruptcy case!