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Old 09-25-2008, 05:48 PM
 
Location: Idaho Falls
5,029 posts, read 5,416,023 times
Reputation: 1479

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Everyone's pointed out what a disaster it would have been if the McCain/Bush SS privatization plan had been put in place back in 2005. Near-term retirees who never saw this market meltdown coming would have been devistated. Of course, not everyone was taken by surprise:

Quote:
"Fratto insisted that the plan was not slapped together and had been drawn up as a contingency over previous months and weeks by administration officials. He acknowledged lawmakers were getting only days to peruse it, but he said this should be enough." (Source)
So. The Bush Administration has had this plan in the works for months. They've known about the crisis, but didn't want us to know - most likely hoping that the markets wouldn't crash until after the election. But that's the way they've always operated. Remember how, for years, Bush told us we were winning in Iraq - right up until he unvailed a new plan for victory? SOP.

But that's a subject for another time. I wonder about something else. Put on your conspiratorial tin-foil hats.

Wall Street is not stupid. Those firms have departments that analyze, study, forecast, and audit. They understand their portfolios better than anybody. And they've known for years that they were pushing an unsustainable business model. several years ago it became obvious to all of them - the investment houses, the financial insurers, the integrated banks - that their growth and profits couldn't be sustained on the housing bubble and the associated derivative products ("credit default swaps"). They realized that those bundled subprime loans were over-valued and over-rated (since they had done the ratings themselves). They also knew that the credit default swaps were trading way higher than anyone could justify, in a completely unregulated market (thanks, in part, to Clinton). They also knew that there were no reserves to cover losses - also thanks to changes made in the late 90s.

In short, they knew that the true value of those assets and derivatives were more like Dutch tulips than sound investments. They all knew that it was just a matter of time until a slight housing downturn would uncover the incredible weaknesses in the house of cards that they had built. So what could they do? They looked around and saw a huge pile of money, untouched by their hands: Social Security. A brand new source of income that could sustain their growth, increase their profit margins, float their golden parachutes, and hide their exposure to the overvalued housing bubble.

Lo and behold, following the 2004 election, George Bush announced that the "Social Security Crisis" was the number one domestic threat to America's future. A problem that had to be solved immediately, if not sooner, because it was that important. Bush was going to use the strength of his "mandate" to solve the SS problem forcefully. Remember how all his arguments were shot down as totally baseless? (And remember how every time Bush went on prime time to push the idea, it's popularity dropped?) Nobody fell for it, because it wasn't really a problem.

So just why was Bush saying the problems was so dire? Why did he fabricate an emergency where none existed? Did the GOP's wealthy backers push the Bush Administration to put this minor issue on the front burner as some sort of major personal threat to the American public? Was Bush shilling for Wall Street in 2005? Would that be criminal behavior, if true?
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Old 09-25-2008, 05:54 PM
 
13,180 posts, read 12,730,901 times
Reputation: 4531
I'm for doing nothing but putting in regulations to make sure it doesn't happen again.

Let the chips fall were they may. I pay my mortgage as do the vast majority of homeowners.

Let those who can't or will not pay their mortgages and the banks that lent them money suffer the consequences.

If the economy goes to crap so be it. At least the market is punishing the culprits first and foremost.
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Old 09-25-2008, 05:57 PM
 
Location: Wantagh NY
690 posts, read 894,763 times
Reputation: 142
Quote:
Originally Posted by padcrasher View Post
I'm for doing nothing but putting in regulations to make sure it doesn't happen again.

Let the chips fall were they may. I pay my mortgage as do the vast majority of homeowners.

Let those who can't or will not pay their mortgages and the banks that lent them money suffer the consequences.

If the economy goes to crap so be it. At least the market is punishing the culprits first and foremost.
I agree with you 100%!
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Old 09-25-2008, 06:09 PM
 
13,180 posts, read 12,730,901 times
Reputation: 4531
The Bush SS plan of privatization is/was an absolute sham.


With the "market gains" retirees would still get 20% less money than if they went with the current plan.

It involves the Government taking on huge amounts to new debt to pay current retirees workers are now paying in their "private" account not towards present day retirees.

The current system is a very good program. It has little overhead and it's small long term deficit that could be corrected by applying the same amount of money Bush spent on

this senior citizen prescription plan.


SS was never meant to be a "retirement plan". It's only a minimum safety net so you don't have destitute senior citizens all around you.


And to your point. What kind of fool would want their most critical money invested in a market where the GOP will not regulate their greed and corruption.
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Old 09-25-2008, 08:22 PM
 
Location: Idaho Falls
5,029 posts, read 5,416,023 times
Reputation: 1479
Quote:
Originally Posted by padcrasher View Post
At least the market is punishing the culprits first and foremost.
But this isn't quite true. Lots of people will be hurt. Many of the homeowners were defrauded by the mortgage lenders. And many of the principles will get away with million-dollar golden parachutes.


I don't want another Depression (which might not occur if we do nothing - but then again, it might). I'm not going to oppose a potential solution just because it's taxpayer funded. I'll oppose it because it won't do what it needs to do (like Bush's first proposal).

But back to the point. Was Bush motivated by Wall Street to push for SS privatization?
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