Trash Dispatch: Reuters is reporting;
"Majority Leader Harry Reid of Nevada said on Friday he "plans to press forward" with emergency aid to automakers..." "Leaders in the House of Representatives have been working to craft legislation that would allow the Treasury Department to extend emergency assistance to Detroit under its ongoing corporate rescue initiative.
In return, the government likely would take an equity stake in the companies and impose conditions, including limits on executive compensation."
Essentially what this means is that the United States Federal Government is about to Take-Over the US Auto Industry just as it did the American Banking system with the now infamous $750 Billion dollar Bail-Out package. Which, was "suppose to" purchase the bad loans banks had made, but instead was used to Buy the banks themselves through stock purchasing.
Why was it decided to "Buy the Bank" instead of the bank's bad loans/paper? Because in the larger scheme of things, "if you own the bank, you own the paper". And by taking over the bank, not only does the US Gov. now own the bank, but the mortgage on Your House as well!
So is this something we should worry about?
Take a look at the last statement in the quote above...
"In return, the government likely would take an equity stake in the companies and impose conditions, including limits on executive compensation."now let's take that statement and do a little word substitution taking into account that some poor unfortunate homeowner got behind on their mortgage, and also needed a bail out...
"In return, the government likely would take an equity stake in the Home and impose conditions, including limits on homeowners rights."Now THAT'S SCARY!!!
Except for one thing. Since, at this point, the gov. will Already own an equity share in your mortgage as it already owns the bank. The above "revised" statement, really doesn't mean that much should you fall behind on your payments and need help. So now let's take it one step further and say...
"In return, the government likely would take an equity stake in the HomeOwner, and impose conditions including limits on the homeowner's freedom."Ok Laugh! But before you do, you should know that this is Exactly how the USSR controlled it's economy, and it's people. There is one other factor that has yet to be established in the "complete" communist conversion of the United States. And that is the taking over of religion. However, as the "Unitarian Universalism" religion has already been established and adopted by both the United Nations and the World Court. The only thing left is it's implementation.
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1 comments:
It looks like the folks in DC are hell-bent to give the stimulus package another try seeing as the first one didn't have any real effect.
This time it's the car industry.
While the sanity of blowing cash around and running the national debt up even further is questionable; it seems inevitable - so this time let's target unemployment, create AMERICAN jobs and pump up the economy all at one time.
Consider the following:
Manufacturing costs of motor vehicles are 65% labor (ie: W-2 income), that's not all direct but due to suppliers. GM alone has over 1300 suppliers. (That's a lot of jobs!)
1 in 10 Americans makes all or part of their income due to the automobile industry.
Money turns over 5 times in a year.
Thus a vehicle with a manufacturing cost of 20K produces 13,500 in W-2 income which in turn becomes a total of 65K in 12 months due to the 5 turnovers.
(This isn't magic, it's simply how the economy works.)
Our domestic car makers are saddled with legacy costs, most of which will reduce dramatically in 2010 due to contract changes. They need to survive to get there.
Here's the solution
Instead of either shipping cases of cash off to car makers; or sending us all another check:
Send out a voucher for say $1,000 good on a motor vehicle for the percentage of the vehicle that's domestic. (Civic = 70% Ford Explorer=80%)
Let those not interested in a new car sell or give away their vouchers (Ebay would be loaded with them in no time flat) and those that are so inclined can use as many as they can get their hands on up to the full MSRP of the vehicle.
This would bail out the car industry without giving them a dime directly
Further it would reduce the overall age of the nations cars which would in turn;
increase overall fuel economy & decrease pollution.
Strengthen the dollar!
Since vehicles with a higher domestic content would be moving better this would reduce our imports, strengthening our dollar which would in turn further reduce what we pay for anything imported ...like gas!
Jobs
Instead of simply bailing out a few big companies, this would cause such a run that it would create employment throughout the industry affecting over 1300 suppliers and their workers.
That would give the economy good swift kick right where it needs one!
Pays for itself!
Since money turns over 5 times, and the vouchers are only good for the domestic content of the vehicle, every dime would be spent in the United States creating taxable income.
What is the income tax on 65,000 anyway?
(Remember? 20K manufacturing cost = $13,500 W-2 income x 5 = $65,000)
Another Stimulus Package?
I'm sure you'll agree that this makes more sense than simply sending out checks; many of which will be used to buy new flat screen TV's usually made in Malaysia or some such place.
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