House Republican Plan A Political Stunt

House Republicans say they want Wall Street to pay for its mistakes by giving them a new capital gains tax cut, more deregulation and believe it or not.....they want to offer them a government-run insurance policy to guarantee their risky investments from losses.

Excerpt:
Under the House Republican plan, the government would provide insurance for mortgage-backed securities for a fee. The plan also would aim to remove "regulatory and tax barriers" they say are "currently blocking private capital formation."

Rep. Paul Ryan and his Republican ideologues in the House are pushing a plan that amounts to government-sponsored social security for Wall Street capital market brokerage houses. They want to insure investment risk with the full support and backing of the U.S. Treasury – for a fee. Ironically however, Ryan has spent nearly half of his career trying to convince Main Street that a treasury-backed participant-funded retirement safety net isn't good enough, but suddenly it is just the ticket to prevent Wall Street from financial ruin.

This scheme to insure risky investments is at the heart of their “bail out” plan to restore the credit markets. Never mind that their plan for Wall Street adds insult to injury by including more deregulation and new tax cuts for capital gains. These are the very same economic stimulus policies that created this mess in the first place. They want to expand it.

Excerpt:
The RSC's plan is set to include a two-year suspension of the capitol gains tax, provisions to transform mortgage giants Fannie Mae and Freddie Mac into private entities...

And I’d look over that list of renegade republicans in the house and would be willing to bet that most them are card-carrying Bush rubber stampers who suddenly want to distance themselves from the unpopular president. They know rebelling against the administration's plan would clearly help their re-election campaigns. They could say "who wants to hand Wall Street $700 billion dollars? The Democrats do. We want to charge Wall Street for the crisis." It's a bunch of malarkey.

The two congressmen at the core of the insurance plan stunt are Rep. Eric Cantor of Virginia and Rep. Paul Ryan of Wisconsin. Cantor has voted with a majority of his Republican colleagues 92.6% of the time during the current Congress. While Paul Ryan has voted 92% of the time.

Excerpt:
This proposal would have the government provide insurance to companies that agree to hold frozen assets, rather than have the government purchase the assets. Rep Eric Cantor, R-Va., said the idea would be to remove the burden of the bailout from taxpayers and place it, over time, on Wall Street instead.

Exactly the opposite is probably true. While Wall Street firms will keep the "good" mortgage notes for the profits they provide, they will have an outlet in which to dump all the "toxic" notes. The treasury backed insurance plan will make good on their value, that's what insurance does. What they are trying to do is write a plan of deregulation and even more tax cuts for Wall street operatives under the false impression of saving the country $700 billion dollars.

The other thing is, our country has been in severe economic pain for a much longer period then just the last two weeks the administration would like to have us believe. The do-or-die consequences painted around the Bush/Paulson fix implies that the problem was hidden for many years, that there is a lot more here than what meets the eye. The plan offered by the House Republicans isn't even a plan to fix a crisis. It's corporate written legislation to keep the fuel tanks filled on their yachts, their cigar boxes loaded and wine cellars stocked.

The main problem I see with both plans is that neither one of them is designed to open up new jobs or savings plans. They both attempt to tinker around the edges of a broken monetary system built on debt. The Bush/Paulson Plan and the House Republican Insurance Plan are designed to keep the credit/debt markets open. That's all. One with $700 billion, the other one without. Both plans are meant to keep the American delusion alive, that our every want and need is just a loan away. Either plan just prolongs the agony for another day.

Read: Warren Buffet is willing to gamble $5 billion that Wall Street will be awash in $700 billion very, very soon.

Before country has a chance to pull out of financial crisis, Federal Reserve wasting no time laying foundation for the next one.