patrick.net

Yea, but don't stop at income taxes. Don't pay property taxes, or sales taxes, or school taxes... Don't pay anything. And the IRS is illegal because the amendment that allowed for taxes was never ratified.

Just curious - where will the money to run the system come from? Donations?

At what point did I, or any voter, or tax payer for that matter, agree to let our President “appoint” someone, who hasn’t been elected by anyone, and decides to take our money in shovel-fulls and load them into the pockets of a select few?

If you're referring to Timmy, he wasn't appointed, he was confirmed by congress.

Anyway, this is all pretty silly, because it's not like the government took your tax dollars and spent them on the bailouts anyway. Hell, even with an inflated bay area software engineer's salary, you're just barely paying more than you and your family cost society (no, really, do the math -- you might be surprised). They borrowed the money mostly from people who are able to print it.

It's surprising that even on this forum, people can't seem to see beyond 6 months. Eventually this money is going to come from your taxes. That's the implicit guarantee that the central govt is running on. The only thing that gives them the confidence to run up their tab recklessly? Is your future tax dollars. Their source of guaranteed revenue. The unending supply of money from the tax payer. At ever increasing rates. If only you had the wherewithal to look out beyond 6 months.

Alas, I suppose not.

Also, I have no issues against local taxes. The "system" need not be a gigantic behemoth where someone in Washington decides that the tax dollars of someone in rural Montana pay to bail out the actions of someone in Urban California or Florida whose actions were irresponsible at best and fraudulent at worst. It's also sad that people have forgotten what the guiding spirit of the formation of the Republic was. So no, not "donations" (again clearly demonstrating the lack of understanding of the fundamental assumptions underlying the creation of the republic) But local taxes. So I pay for exactly what I get.

So yes, try and look out beyond 6 months, and you'll see what I'm saying. At some point the printing press stops lest the currency die (again, look beyond 6 months) At that point, there's no option but to cut spending and raise taxes. And these taxes will be no jokes after the 11 trillion that will have been spent or committed to the bailouts. And that's still a rubbing tab, btw.

I intend to pay for exactly what I cost society. No one else should have to. Not a penny less. But not a penny more either. I surely don't intend on bailing your ass out if you buy the first bazillion dollar mansion that a bank is willing to lend you money for when you realize you can't afford it.

It really cracks me up that people get so disturbed about the TARP money--would it surprise you to know that we've spent ~$700 Billion in the Iraq war? Compared to ~$300 Billion for TARP. And TARP is a loan--we will get some percentage of that money back. We won't get any of the $700 Billion back from Iraq--that is guaranteed. So which is the real cause of the US deficit?

Hell--our government has been giving gifts to the rich for the last 8 years. You're just now waking up? The rich have been getting richer for a long time and leaving the middle class behind. Thanks W.

Go ahead and stop paying. Noone will shoot you, but they may throw you in jail.

Or move to a different country--maybe you'll have better luck...

While I hate tax, I hate tax-evaders more.

Please play by the rule and pay all taxes!

Please DO NOT CONDONE any illegal behavior.

The debt will not be repaid by meaningfully higher taxes. It will be repaid by:

1. Defaulting on intergovernmental debt (except that owned by government pensions)
2. Inflation

There will definitely be some tax increases, but at worst I'd expect Reagan-era rates, not Eisenhower.

What cracks me up even more is that people think it's just 700 billion that we've spent. Just today the official figures show 4.3 trillion spent and back-stopped, with a total commitment of 11 trillion. This figure dwarfs anything hithertofore. And it's not even going where they claim it's going. It's unequivocally the largest transfer of wealth in the history of this country. My wealth. Your wealth. The F.R.A.U.D. of "Forcing Renters to Assume Unlimited Debt" goes on, unopposed, condoned and justified by people of this board, no less. The punchline? You don't even seem to realize you're condoning it.

"Please Do not condone illegal behavior"? So just because Washington decides to hand over your money to Dimon and Blankfein it's legal? Bear Stern, handed over to JP Morgan using 29 billion of "Govt money" and that's legal? Bank of America given Merrill with 20 Billion dollars of your money and that's legal? The Fed's swapping pieces of paper backed by "crap-in-a-bag" for Treasuries, ie, money guaranteed by you, and that's legal? Grow up, turn off MSNBC and think this one out for yourself.

The worst damage though, is probably done by those who claim to be in the know of things, and think things like "Defaulting on National Debt" and "inflation" aren't problems that will hit the regular guy. They will. Inflation is a tax. Defaulting on Govt debt will tank our currency, increase borrowing rates, and yes, cause more inflation. All taxes. And this on top of Reagan-era tax rates. Much worse than anything we've ever really faced before. But yes, please only concentrate on what they charge you on your 1040 and stay happy with the low tax rates. Kinda like being happy with an inflation rate that excludes food and energy.

Yes, condone the transfer of wealth like responsible Americans. In fact, the White House had a press release today that might help you. It went something like this:

"In order to expedite the healing of the financial system, the next time you see someone from Goldman Sachs, hand him your wallet".

That's not really true. The article you refer to states that the US was potentially on the hook for much more than originally thought(because of the guarantees), but that luckily that money wasn't ever needed or spent. It also says that we are actually going to make a slight profit on the bank bailout and that the general consensus among economists is that TARP was necessary and successful.

Having said that, the moral hazard issue is serious and needs to be addressed. Breaking up the mega-banks so that they are not too big to fail would be a good first step...

Bloomberg sued the Fed to release the already swapped, yes, "already" swapped 2.3 trillion dollars. Who were the beneficiaries, and what were the swapped assets? You know their response right? The finger.
This isn't accounted for "as money spent" since mark to market doesn't apply anymore, and the ratings they're using are the same ratings that landed up in this mess. But from an unwinding of Merrill's deals last year, these notes sold at 9 cents on the dollar. That's a 91% loss. Doing away with mark to market will never force the fed to realize that loss, but that's your money, that's just gone.

And the fed window is open 24/7. That's what you read about when you read headlines like "Banks increase/decrease Emergency borrowing from Fed Window" That's them parking their worst assets onto your balance sheets and walking off with crisp, warm off the press tax payer backed Treasuries.

This is where the transfer of wealth is really happening. Screw TARP. That was an eye wash. Screw the 5 or 10% we'll make off-a TARP. That's meant to keep a few people who eat up the printed news, happy. The real focus, is what's happening at the Fed. That's where the game's really at. Washington's the stage. Fed's the arena. Don't watch their report of the game. Watch the game.

angrish said: "At the end of the day, it’s a gun that’s taking my money from me. Not my sense of patriotism, not my sense of communal responsibility or altruism. My fear. The money’s being taken from me at gunpoint. It’s either the money, or my freedom. That’s when the choice becomes a no-brainer. You can have my money. But then let’s call it what it is. Protection money. Don’t make me hand it over to you like I owe it to you. I don’t. Come grab it out of my pockets. Don’t worry, my hands are up in the air. I don’t want to give it to you, but I don’t have a choice."

This is the most honest truth I have heard anyone say today, perhaps all year! Bravo for your courage and honesty! Wish more people had the guts to say so.

angrish says

And the fed window is open 24/7. That’s what you read about when you read headlines like “Banks increase/decrease Emergency borrowing from Fed Window” That’s them parking their worst assets onto your balance sheets and walking off with crisp, warm off the press tax payer backed Treasuries.

Again--that's only partially true. Those are loans. The Fed doesn't own all the bad assets, but it did allow them to be used as collateral on the loans. So, if Citigroup or Goldman goes bankrupt then the Fed will be on the hook. Which is why we don't want them to fail...

It's so unfortunate, again, that the informed are only selectively, if naively, so. Those are loans as much as the following is a loan: You come to me and ask me for a 1000 dollars giving me tulips as collateral. You ask when you need to come and pay me back, and I tell you it's ok, you can hold onto the money till people are willing to give their first-borns in exchange for tulips. You're right though, it is technically a loan.

The fed isn't on the hook if the BANK goes under. Where is your faculty of reason? The collateral isn't backed by equity in the BANK, it's backed by Mortgages which, considering you're on this board, you already KNOW to have failed. Wake up. Those pieces of paper are ALREADY worhtless. They aren't things waiting to go worthless if these banks go under. But you've already bought their line. Their line of "The right thing for you is to pour your heart and soul into industry so we can channel your earnings and work into the pockets of the bankers". In fact, and you can google this, Blankfein just claimed that banks do the work of God! Blah! Seldom was the Name ever spoken more in Vain!

Why do the seemingly intelligent buy all the nonsense they are sold? Please, for the sake of those not as informed around you, Tatupu70, cut through the mire and see the plain and simple truth. Don't fight it. What do you fear? Losing faith in an all forgiving and all-honest governing entity? Are you scared you might realize that you were being played all along and would rather stay played and ignorant?

@Angrish--

I'm not sure what you are saying. I'm not buying any nonsense. I guess I don't see things as black and white as you do--I can see many areas of gray. The world isn't made up of right and wrong choices--sometimes all you've got is a choice of crappy, really crappy, or really, really, really crappy. Which is where we were when the shit hit the fan.

I said the Fed isn't on the hook is the bank DOESN'T go under. ie. it pays back the loan. The thinking is that AIG and Goldman, etc. will be able to pay back the loans out of future earnings. Maybe they will, maybe they won't, but I actually think it was a reasonable decision. Because the alternative of letting the US economy collapse is pretty scary.

Breaking up the mega-banks so that they are not too big to fail would be a good first step…
tatupu70, I appreciate your comments. If we don't get some reform out of this, people will be ready to man the barricades... In theory, FDIC limits take care of this problem. Thing is, it's inefficient for individuals and businesses to spread their money around, and then look what happened during the crisis -- the govt raised the limits to $250k to prevent runs.
The real focus, is what’s happening at the Fed.
I'll agree with angrish on that point. In the beginning, the Fed sold off Treasuries to support the various temporary facilities (TAF, TSLF, etc. -- which are actually being shut down), then they borrowed from the Treasury (Treasury Supplemental), and finally had to resort to printing, and so far, have taken on $774.8Billion of MBSes onto their balance sheet. It remains to be seen how Fannie, Freddie and FHA will be propped up (through the Treasury, or if the Fed has some roll).