Hartmann: How Wall Street Can Bail Itself Out

[Phred42]

Thom Hartmann:

How Wall Street Can Bail Itself Out Without Destroying The Dollar
http://www.commondreams.org/view/2008/09/26

For Grover "Drown Government In The Bathtub" Norquist, this bailout deal will work out very well. At a proposed cost of $4,780 per taxpayer, it'll further the David Stockman strategy of so indebting us that the next president won't have the luxury of even thinking of new social spending (expanding health care, social security, education, infrastructure, etc.); taxes will even have to be raised just to pay for the bailout. It'll debase our currency, driving up commodity prices and interest rates, which will benefit the Investor Class while further impoverishing the pesky Middle Class, rendering them less prone to protest (because they're so busy working trying to pay off their debt). It'll create stagflation for at least the next half decade, which can be blamed on Democrats who currently control Congress and, should Obama be elected, be blamed on him.

But there's another way: Create an agency to fund the bailout, loan that agency the money from the treasury, and then have that agency tax Wall Street to pay us (the treasury) back.

It's been done before, and has several benefits.

In the United Kingdom, for example, whenever you buy or sell a share of stock (or a credit swap or a derivative, or any other activity of that sort) you pay a small tax on the transaction. We did the same thing here in the US from 1914 to 1966 (and, before that, we did it to finance the Spanish American War and the Civil War).

For us, this Securities Turnover Excise Tax (STET) was a revenue source. For example, if we were to instate a .25 percent STET (tax) on every stock, swap, derivitive, or other trade today, it would produce - in its first year - around $150 billion in revenue. Wall Street would be generating the money to fund its own bailout. (For comparison, as best I can determine, the UK's STET is .25 percent, and Taiwan just dropped theirs from .60 to .30 percent.)

But there are other benefits.....

[dkofos]

1. We don't need to give away the treasury to save the rich from themselves!!

[Trillo]

2. But making joe and jane citizen pay for corporates' bad debts

appears the plan under discussion. It's not an ownership society if the little guy doesn't lose.

[Trillo]

3. Just as an aside,

this also, I believe, provides a disincentive for what traders call "churn", or for those not familiar with the term, the round-turn buying and selling with the sole intention of spiking volume and creating technical-analysis illusion.

[Christian30]

4. Thom Hartmann for president!

[Greyhound]

5. Always a K&R for sanity. n/t

:kick: & R

[Greyhound]

6. kick

[yurbud]

7. kick