On Wednesday, 12 November, Treasury Secretary Henry Paulson announced that the Executive is officially abandoning its plan to use the $700 Billion set aside for the buying of bad mortgages from lending institutions as it was originally given permission to by Congress. This doesn't come as a complete shock as, only days after the Bailout Bill was passed, the Bush Administration dropped its original talk and started to buy ownership in these major financial institutions. What is surprising in all of this is what Paulson said he, as current king of the roost, is going to do instead.
Is he going to help the American people out who cannot afford to make their loan payments by encouraging banks to renegotiate the terms of these loans which would turn these "bad" mortgages into viable mortgages again, thus easing this "squeeze" on the economy? No. Paulson claims that is beyond the original scope of the powers given him by Congress, and therefore he will not be pursuing that option.
Is he going to use this money to guarantee these troubled loans, which would mean, again, that there is no “hole” in our economic system, and completely dodge the whole problem? No. That isn't what Secretary Paulson is going to do with your money at all.
Treasury Secretary Henry Paulson said Wednesday the $700 billion government rescue program will not be used to purchase troubled assets as originally planned. ... He announced a new goal for the program to support financial markets, which supply consumer credit in such areas as credit card debt, auto loans and student loans.
- AP news article
Yes. We are bailing out even more of the credit industry now - including the most predatory sector of the lending industry, credit card debt. Mr Paulson is going to take our money and use it to ensure that the American people are pushed further into personal consumer debt than we already are. Paulson – giving no details on the means by which he will accomplish this except saying it will take weeks to come up with a plan, and even longer before the plan can be begun, putting the beginning of this coming fiasco some time at the beginning of the Obama Administration – says these industries are in need of help because they are "grinding to a halt." That is to say, the credit industry in the United States has basically completely destroyed itself by over-indebting the American people, and now it needs your and my money to finance its survival.
I don't know about you, but I was not aware that it was the job of our government, supposedly set up to do our will, to use our money to finance a scheme to load more consumer debt upon the American people. What is even more staggering about the incredible irresponsibility, and possible outright evilness, of such a plan is that a very good portion of these home mortgages, which people cannot afford to pay off now, were originally taken out in order to pay off strangling credit card and other consumer debt. Secretary Paulson is basically suggesting as the solution to the problem, one of the original causes of the problem. On top of that, we are taking a problem created by people taking on debt given to them through predatory lending practices, and the proposed solution to this problem is to increase and revitalize the only other more predatory lending industry in our economy – the credit card industry?
Student loans, which Paulson wants to help expand as well, aren't much better these days. In the past student loans have been given with low interest rates and a pay-off schedule reasonable to someone pursuing a degree. Today, however, student loans are increasingly of the sub-prime type – the same type of loans, with ballooning interest rates and payments as the loan ages, that have gotten us in all this trouble in the first place.
Debt, especially consumer debt, has been a growing problem for Americans and American families for some time now. This debt, purposefully or not, becomes a form of control and an enforcement of the status quo. Student loans often force graduates away from their original goals in life into jobs that pay well enough to pay back their loans from school. Credit card debt becomes a weight on people's shoulders, one more stress to deal with in today's increasingly stressful world.
The incredibly insidious thing about debt is its inherent ability to enslave people. As personal debt is taken on, people become more and more dependent on their jobs as their only means of keeping from losing everything they have and one day, hopefully, becoming free from their debt. However, as people become more and more dependent on their jobs they are less free to take the risks required to get better jobs in order to make enough money to pay off their debts. People must take whatever they can get, unable to be picky about their jobs with such a heavy weight on their shoulders, forcing them into working longer hours and for less pay, often having to take on second jobs, working even more hours, and forcing people into a “wage” slavery – that is, workers unable to demand rights, decent pay, reasonable working hours or safe conditions because they are dependent on their jobs for survival to the point where they cannot risk doing the slightest thing that might cost them these jobs.
If you are thinking to yourself right now that this wage slavery concept is a bit of a stretch, just find a friend of yours that is being strangled by debt and ask them about their lives. You can also look around the world or to our own history – the wage enslavement of former slaves in the South after the end of slavery being a rather good demonstration – for other examples to bring the reality of all this home to you.
This is what Secretary Paulson wants to finance with our money. Instead of pursing reasonable and rational solutions to this economic problem, the Bush Administration has taken on the task of furthering and worsening the conditions that lay at the root of the problem. This makes one question why they would take actions that anybody with a rational thought in their head can plainly see are not only going to fail to solve the problem, but will make the problem worse - just one more demonstration of how our government, under any administration, has ceased to be a tool of the people and has become a tool to carry out the will of large corporations. It is bad enough that we Americans have to watch our backs to ensure we are not being preyed on by these corporations without having to hand over our own money – meant to be used for public goods such as building roads, etc. – to finance them.
So what can we, the people, do about this? Legally, pretty much nothing. All of those “oversights” that Congress demanded before passing this Bailout Bill, giving Treasury Secretary Paulson $700 Billion to do with as he pleases, pretty much only work if the money was used as it was originally intended to be used. We, nor our representatives in Congress, do not have any say since the money is not being used in this way. (Never let it be said the Bush Administration does not have some massively brilliant legal minds behind it.)
That is not to say, however, that we have to stand idly by and take this abuse and exploitation. We have a voice, we can speak up and demand that our will be heard. Our country was founded on the idea that a government is meant to do the will of the people it represents, and if that government ever stops doing the will of its people, we should replace it with one that will. This is one of the most American of ideals. We have the right to demand our government not only hear our voices, but that they act in accordance with what we want.
I encourage you to gather support among your friends and in your community. Decide what you can do about this problem. Brainstorm on what you can do to have your voices heard. If this means writing your congressperson and firing them, that's great. If you and your community are capable of so much more, of raises your voices high above the level of the white noise of our society, please do this. Stand up for your right to determine your own future, to not have it determined for you by corporate America.
"What man can make, man can unmake."
-- Frederick Douglass
A mere 12 hours after I originally read this news story I can no longer find any news articles making reference to this revelation by Secretary Paulson. Because of this, I have updated this article to include a quote from the original AP article that described this plan.