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While everybody wonders whether the federal government will have to bail out insolvent states, the process has already begun. Writing in the Wall Street Journal Nov. 3, Meredith Whitney, the top bank analyst on Wall Street, pointed out that "state bailouts have already begun. Over 20% of California's debt issuance during 2009 and 30% of its debt issuance in 2010 to date has been subsidized by the federal government in a program known as Build America Bonds." Under this program, the U.S. Treasury covers 35% of the interest paid by the bonds. Without this program, bond interest costs for some states could have already reached prohibitive levels, according to Whitney. "California is not alone," she pointed out. More than 30% of Illinois's debt and more than 40% of Nevada's debt issued since 2009 have been subsidized through this program.

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Comments

Don Bauder Nov. 5, 2010 @ 6:32 p.m.

Response to post #1: More information is always enlightening. Best, Don Bauder

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Anon92107 Nov. 6, 2010 @ 8:24 a.m.

QUESTION:

When is the government going to start bailing out people instead of the thieves who stole our money in the first place?

Crooks like federal/state/local politicians, bankers, corporations, chamber of commerce, etc. who were supposed to protect America from recession and depressions in the first place, which was what capitalism was supposed to be all about, have continued to rob the federal, state and local treasuries with impunity while citizens are increasingly abandoned to drown with no life boat is sight.

Good riddance to the dems who lost their jobs, now it is the GOP's turn to be kicked out again until they learn what Democracy is supposed to be all about again, like protecting We The People instead of robbing us into poverty.

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Don Bauder Nov. 6, 2010 @ 8:39 a.m.

Response to post #3: Your opening paragraph poses a question that millions of Americans want answered. Best, Don Bauder

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Anon92107 Nov. 7, 2010 @ 3:04 a.m.

Response to post #4:

OK, QUESTION #2:

Are all of our federal, state and local governments so corrupt that Democracy in America representing We The People, instead of special interests and larceny of taxpayer funds, no longer exists?

We appear to have come full circle and returned to the Age of Athens before Archon Solon created Rule of Law and Democracy to prevent what is happening to us today.

The only question now is which of the ongoing failure modes will destroy our civilization first, government corruption, capitalist communism, terrorism or the consequences of global warming?

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Don Bauder Nov. 7, 2010 @ 6:59 a.m.

Response to post #5: The lemmings are in a footrace. Best, Don Bauder

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historymatters Nov. 11, 2010 @ 12:04 a.m.

yep, I was calling my senators like crazy to get them to oppose the original bailouts and the stimulus.

the interesting thing is that regardless of whether its a Repub or Dem the agenda is the same. With the Republicans its blatant Corporate Welfare w/ tax cuts or tax credits or retroactive refunds, w/ dems its indirect Corporate Welfare packaged as social welfare.....we have to give billions to companies to "keep" employees or to "create" jobs.

The stimulus Bill which was its own giant bail-out was a HUGE bailout for housing developers. The BIA got everything they lobbied for it. The giant tax cuts to buys houses benefit who??? the developers sitting on the glut. the 250 billion in retroactive tax refunds aka hard cold cash benefit the companies that made HUGE profits prior to recession and now are losing $....hmmm who benefits from that? The developers. I was writing about it in the Reader. A few days later a story came out about a HUGE housing developer in Florida under Federal Investigation that was applying for the "retroactive" cash.

Anyway, my point is ALL these "bailouts" are ALL corporate bailouts that benefit the developers and the banks and reward all the "bad" behavior and punish all the "good" behavior. they are creating a country of criminals. its just bad parenting really.

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historymatters Nov. 11, 2010 @ 12:13 a.m.

the problem is the people in charge...the Fed also known as Goldman Sachs has a HUGE conflict of interest....that is....they WANT to print money!!!!! We are like a 22 year old fresh out of college and they are the predatory bank trying to give us a $20,000 line of credit. Every dollar they print is pure profit so of course the Feds will swoop in to rescue the states. They have a license to print money and we dont. Thats the only diff. Most people dont know the federal reserve gets 4 cents for every dollar they print right off the bat. that doesnt even count the interest.

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SurfPuppy619 Nov. 11, 2010 @ 7:12 a.m.

the problem is the people in charge...the Fed also known as Goldman Sachs has a HUGE conflict of interest

We're no longer a demorcacy. We are a coprorateocrocy-thanks to the SCOTUS and the amount of money corps have to shape elections.

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SurfPuppy619 Nov. 11, 2010 @ 7:14 a.m.

When is the government going to start bailing out people instead of the thieves who stole our money in the first place?

================ Well, if the response of our gov to AIG and Goldman Sachs treatment in the 09/01/10 meltdown doesn't answer that question, then the treatment of homebuyers who need mortgages adjusted-and cannot get it- should.

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SurfPuppy619 Nov. 11, 2010 @ 7:44 a.m.

Not one Too Big to Fail CEO who sold toxic securitized subprime investments to unsuspecting buyers went to jail either. Not only did they knowingly sell those poisoned investment to others – they shorted them as they exited out back door so as to make a profit off their losses. The former Chief Financial Officer of one of the TBTF stated under oath that he and other exec managers knew that 80% of the loans sold to buyers were defective. Not one indictment. But try to write a bad check to a local business and watch how fast the DA gets involved-assuming you are the run of the mill, everyday little fish and not one of the connected few. From what I’ve seen this is a scam intended to protect the elite from both the public and private sectors

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Don Bauder Nov. 11, 2010 @ 7:56 a.m.

Response to post #7: Given my druthers, I will take social welfare to corporate welfare. I will also take tax cuts for the poor and middle class over tax cuts for the rich. In fact, the higher incomer/wealth people should have tax increases. Best, Don Bauder

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Don Bauder Nov. 11, 2010 @ 7:58 a.m.

Response to post #8: You can't look at TARP or the stimulus alone. You must also look at the hyper-easy monetary policy, which will one day prove disastrous, that the TARP/stimulus gave birth to. Best, Don Bauder

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Don Bauder Nov. 11, 2010 @ 8:03 a.m.

Response to post #9: Well said. Another problem is that the Fed has announced that it will continue giving banks money for essentially nothing as long as unemployment remains at 10%. Do you think Wall Street wants unemployment to drop? And do you realize that Wall Street has much more political influence than any institution? That is why I believe that 10% unemployment has become the new normal. We are on our way to a plutonomy, in which the economy is run for the benefit of a handful of the extremely rich. Best, Don Bauder

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Don Bauder Nov. 11, 2010 @ 8:06 a.m.

Response to post #10: But even before that horrible SCOTUS decision we were a corpocracy. In fact, the reason for that decision may have been BECAUSE we are a corpocracy. The court -- particularly this court -- is completely beholden to business. Best, Don Bauder

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Don Bauder Nov. 11, 2010 @ 8:07 a.m.

Response to post #11: Right on. The government will prop up Wall Street and corporations but it will do little for people. Best, Don Bauder

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Don Bauder Nov. 11, 2010 @ 8:22 a.m.

Response to posts #s 12 and 13: There have been some government moves -- Countrywide's CEO, e.g. -- but the general thrust of your argument is correct. Best, Don Bauder

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