Resolved: Federal government bailouts of 3
BAILOUT FUNDS SHOULD GO TO PUBLIC WELFARE
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- THE GOVERNMENT HAS AN OBLIGATION TO TAXPAYERS
- THE GOVERNMENT SHOULD PRESS FOR REFORM, NOT BAILOUTS
- DEMOCRACY IS ESSENTIAL FOR PEACE AND STABILITY
- SECTION 5: ESSAY NOTES
BAILOUT FUNDS SHOULD GO TO PUBLIC WELFARE1. THE BAILOUT WAS THE GOVERNMENT TURNING ITS BACK ON FORECLOSURES William John Cox is a retired supervising prosecutor for the State Bar of California, October 3, 2008. “Betrayed by the Bailout: The Death of Democracy,” Global Research, Accessed 12-10-2008, The legislation could have required the government to directly purchase the defaulting mortgages and to adjust them to the reduced value of the property, as was done in the Great Depression. Instead, Paulson is authorized to purchase the complex derivatives (Wall Street’s gambling debts) piled on top of the original mortgages. The difference is whether homeowners or Wall Street receives the benefit of the bailout.
Ralph Nader, JD from Harvard Law, 2000. “Cutting Corporate Welfare,” THIRD WORLD TRAVELER, Accessed 12-10-2008, At a time when even growing federal budget surpluses do not persuade our nation's political leaders to devote public resources to repairing and enhancing the built elements of our commonwealth--such as the nation's schools, bridges, clinics, roads, drinking water systems, courthouses, public transportation systems, and water treatment facilities--one might expect to see calls to divert taxpayer monies from flowing into private corporate hands and instead direct them to crying public needs. But somehow the cramped federal budget--as well as similarly situated state and local budgets--always has room for another corporate welfare program. 3. CORPORATE WELFARISM TRADES-OFF WITH TACKLING POVERTY Ralph Nader, JD from Harvard Law, 2000. “Cutting Corporate Welfare,” THIRD WORLD TRAVELER, Accessed 12-10-2008, At a time when the national GDP is soaring, one in five children lives in deep poverty, one might expect that a public effort to curtail welfare would focus on cutting big handouts to rich corporations, not small supports for poor individuals. But somehow the invocations of the need for stand-on-your-own-two-feet responsibility do not apply to large corporations. 4. EMPIRICALLY, CORPORATE WELFARE TRADES OFF WITH PUBLIC WELFARE PROGRAMS Donald L. Barlett and James B. Steele, Editors, November 09, 1998. “Corporate Welfare,” TIME (online), These taxpayers are called corporations, and their deals are usually trumpeted as "economic development" or "public-private partnerships." But a better name is corporate welfare. It's a game in which governments large and small subsidize corporations large and small, usually at the expense of another state or town and almost always at the expense of individual and other corporate taxpayers. Two years after Congress reduced welfare for individuals and families, this other kind of welfare continues to expand, penetrating every corner of the American economy. It has turned politicians into bribery specialists, and smart business people into con artists. And most surprising of all, it has rarely created any new jobs. 5. CONGRESS SHOULD HAVE USED THE BAILOUT PACKAGE TO STOCK FOOD BANKS William John Cox is a retired supervising prosecutor for the State Bar of California, October 3, 2008. “Betrayed by the Bailout: The Death of Democracy,” Global Research, Accessed 12-10-2008, Food banks who serve as the last resort for the hungry are running out of food. They are having to reduce rations and to dip into emergency supplies of staple items. There are reports of a 40 percent increase in requests for food assistance and a 30 percent drop in supplies. These hungry Americans were betrayed by their elected representatives! The bailout could have increased the amount of federal assistance for food banks in the Emergency Food Assistance Program, but it didn’t. THE GOVERNMENT HAS AN OBLIGATION TO TAXPAYERS1. CORPORATE WELFARE DIVERTS POLITICAL POWER FROM THE PEOPLE TO CORPORATIONS Ralph Nader, JD from Harvard Law, 2000. “Cutting Corporate Welfare,” THIRD WORLD TRAVELER, Accessed 12-10-2008, It is raw political power that creates and perpetuates most corporate welfare programs. There is no serious public policy argument for why television broadcasters should be given control of the digital television spectrum-a $70 billion asset-for free. The endless tax loopholes that riddle the tax code-such as an accelerated depreciation schedule that's worth billions to oil companies-cannot be explained by any exotic theory of fair taxation. Local taxpayers rather than billionaire team owners pay for the new sports stadiums and arenas that dot the American landscape because of the political leverage sports teams and their allies gain through corporate cash and the threat to move elsewhere.
Robert Morpheal, Staff Writer, December 10, 2008. “Constitutional Challenge to Corporate Bailouts,” Democratic Underground, Accessed 12-11-2008, Thus the government’s funds must be spend differently and not given to corporate entities, when the class of legal entities categorized as individuals, the “we the people” of the constitution, have needs that can be readily legally argued to necessarily take precedence. In that case of argument the needs of the people would have to be met before any surplus to those needs could be granted by government to other classes of entities. Whether it is the need for individuals to have transportation, or whether it is other needs that take precedence is less of a point and might in fact be a mute point, in comparison to the more basic problem of whether government can legitimately and legally provide government bailout funding, from government revenues, to corporations, as anything other than surplus to all matters of funding that can be argued to be for the “common welfare” of the legal class of entities known as “individuals”. 3. CORPORATE SUBSIDIES ARE ROOTED IN SPECIAL INTERESTS AGAINST TAXPAYERS Stephen Slivinski, Director of Budget Studies at the Cato Institute, May 14, 2007. “The Corporate Welfare State: How the Federal Government Subsidizes U.S. Businesses,” CATO POLICY ANALYSIS No. 592, Subsidies are usually given to a few recipients at the expense of many taxpayers. Because there are such a large number of taxpayers—and each corporate subsidy may cost each taxpayer only a few cents or a few dollars—most individual citizens don’t have an interest in lobbying against subsidies since the cost of doing so far outweighs simply paying the taxes. However, the recipients of those subsidies have a substantial interest in making sure they protect the flow of money to them. That leads to a great deal of lobbying by special interests but very little lobbying on behalf of taxpayers. 4. GOVERNMENT SHOULD SERVE THE PEOPLE, NOT BAIL OUT CORPORATIONS Robert Morpheal, Staff Writer, December 10, 2008. “Constitutional Challenge to Corporate Bailouts,” Democratic Underground, Accessed 12-11-2008, We must consider that the constitution was never written, nor was it meant to be interpreted, as a document that serves “we the corporations”, but instead that it was based on the assertion that it is written to serve the needs of “we the people”. It is that fundamental distinction, at the very roots of the constitutional documents themselves, and at their very origin, that makes all of the difference in the argument. It should, we argue, define the precedence of various classes of legal entities, more clearly and hierarchically, so that government must, necessarily, serve the people, not large corporations. THE GOVERNMENT SHOULD PRESS FOR REFORM, NOT BAILOUTS1. THE GOVERNMENT SHOULD REFORM REGULATIONS, NOT BAILOUT CORPORATIONS Steven Greenhut, Sr. Editorial Writer, September 27, 2008. “Big Government meets corporate welfare,” ORANGE COUNTY REGISTER, Accessed 12-10-2008,
Fortunately, there are still a few sane voices out there. Somehow, congressional Republicans have regained some of their backbone. Some are opposed to the bailout plan. Here is Sen. Jim DeMint, R-S.C., speaking about the fundamental problem with the Bush bailout: "There are much better ways of dealing with this problem than forcing American taxpayers to pay for every asset some investor doesn't want anymore. We should start by reforming government policies and programs that created this mess, including the Federal Reserve's easy-money policy, the congressional charters of Fannie Mae and Freddie Mac, and the Community Reinvestment Act. Then Congress should pass a number of permanent and proven pro-growth reforms to encourage capital formation and boost asset values." 2. THE GOVERNMENT HAS AN OBLIGATION TO ACCOUNT FOR TAX PAYER FUNDS, NOT BAILOUTS Ron Paul, U.S. Representative-Texas, November 24, 2008. “Texas Straight Talk: The Bailout Surge,” Accessed 12-10-2008, All,Item%20not%20found,ID=081124_2545,TEMPLATE=postingdetail.shtml>.
We must remember that governments do not produce anything. Their only resources come from producers in the economy through such means as inflation and taxation. The government has an obligation to be good stewards of these resources. In bailing out failing companies, they are confiscating money from productive members of the economy and giving it to failing ones. Steven Greenhut, Sr. Editorial Writer, September 27, 2008. “Big Government meets corporate welfare,” ORANGE COUNTY REGISTER, Accessed 12-10-2008,
Government central planning and welfare schemes do not work, whether we're talking about uplifting inner cities or bailing out ill-performing companies on Wall Street. These plans always have unforeseen consequences. The new problem was caused by the old government "fix." The best approach is to let the market – that invisible hand that is the reflection of billions of decisions made by millions of people – sort things out. One can buy homes in parts of Southern California, such as Desert Hot Springs, now for 50 bucks a square foot. The market, through its pricing mechanism, is sorting out the real estate situation with lightning speed. If government props up those who hold the mortgages, it will only delay and distort this effective, but sometimes painful, process. Steven Greenhut, Sr. Editorial Writer, September 27, 2008. “Big Government meets corporate welfare,” ORANGE COUNTY REGISTER, Accessed 12-10-2008,
It's hard to know what the new federal meddling and bailouts will lead to in coming years, but it can't be anything good. The government needs to let the market sort itself out. But the Bush administration and its successor – whether it's Barack Obama or John McCain – still believe in the power of government, the importance of massive regulation, the evils of the true free marketplace, the great knowledge of government bureaucrats and the ameliorative effects of taxpayer dollars. Looks like a tough road ahead. 5. IF THERE WERE NO EXPECTATIONS OF BAILOUTS, BUSINESSES WOULDN’T ASK
Stephen Slivinski, Director of Budget Studies at the Cato Institute, May 14, 2007. “The Corporate Welfare State: How the Federal Government Subsidizes U.S. Businesses,” CATO POLICY ANALYSIS No. 592, In Washington, industry trade associations and lobbying firms continually pressure lawmakers to give out new business subsidies or to protect long-standing handouts. That is a natural byproduct of a government that uses its power to give taxpayer money to favored interests. If there were no possibility that subsidies might be offered, demands for them would diminish if not disappear. 1. DEMOCRATIC BACKSLIDING NOW WOULD CAUSE A GLOBAL ECONOMIC DEPRESSION Larry Diamond, Senior Fellow at the Hoover Institution and Co-Editor of the Journal of Democracy, March-April 2008.
“The democratic rollback: the resurgence of the predatory state,” FOREIGN AFFAIRS, vol. 87, no. 2, p. 36. Now, as democratic setbacks multiply, is the moment for a new strategy. Without a clear understanding of the fundamental problem--bad governance--and the necessary institutional responses, more democratic breakdowns are likely. Without a resolute and relentless international campaign to rein in corruption and improve the quality of governance in at-risk democracies, the current democratic recession could lead to a global democratic depression. Such a development would be enormously costly to human freedom and dangerous for U.S. national security. Public opinion surveys continue to show that majorities in every region of the world believe democracy is the best form of government. The urgent imperative is to demonstrate, through the effective functioning of democracies worldwide, that it really is.
Robert Kagan, Contributing Editor, August 25, 2008. “History's Back; Ambitious autocracies, hesitant democracies,” THE WEEKLY STANDARD, Vol. 13 No. 46, p. np.
The world may not be about to embark on a new ideological struggle of the kind that dominated the Cold War. But the new era, rather than being a time of "universal values," will be one of growing tensions and sometimes confrontation between the forces of liberal democracy and the forces of autocracy. In fact, a global competition is under way. According to Russia's foreign minister, "For the first time in many years, a real competitive environment has emerged on the market of ideas" between different "value systems and development models." And the good news, from the Russian point of view, is that "the West is losing its monopoly on the globalization process." Today when Russians speak of a multipolar world, they are not only talking about the redistribution of power. It is also the competition of value systems and ideas that will provide "the foundation for a multipolar world order." Susan B. Epstein, Nina M. Serafino, and Francis T. Miko, Specialists in Foreign Policy, Foreign Affairs, Defense, and Trade Division at Congressional Reseach Service, December 26, 2007. “Democracy Promotion: Cornerstone of U.S. Foreign Policy?,” CRS REPORT FOR CONGRESS, Accessed 12-15-2008, When U.S. administrations have encouraged democratic reform, they have claimed that benefits for the country, its neighbors, the United States, and the world will result. Many experts believe that extending democracy can reduce terrorism while encouraging global political stability and economic prosperity. In its 2006 National Strategy for Combating Terrorism, the George W. Bush Administration cites democracy promotion as a long-term solution for winning the War on Terror. Representative David Price (D-NC) represents the Raleigh-Durham-Chapel Hill area of North Carolina, January 2009. “Global Democracy Promotion: Seven Lessons for the New Administration,” THE WASHINGTON QUARTERLY, vol. 32, no. 1, p. 169.
Supporting the development of democratic systems around the world is critical to America’s moral leadership even as it enhances U.S. national security. Democracy is an antidote to terrorism and violent conflict because it facilitates economic opportunity and channels societal grievances into peaceful and predictable processes for addressing them. If U.S. officials are serious about the spread of democracy as a foreign policy goal, they must become far more serious about deploying the right means to achieve it. In addition to the other pressing challenges on the international agenda, the new president should undertake a major and comprehensive reform of the foreign aid architecture guided by a more coherent and sophisticated view of the democracy agenda. http://europac.net/externalframeset.asp?from=home&id=14206 www.wcdebate.com |