A new bailout with added failed tax laws

[Lurker]

Congress failed to agree on tax break extenders (AMT, business credits for research and targeted employment) last week.  Basically because the Senate lumped all the breaks together in one bill and told the House pass this or else.  And the House refused WITH DEMOCRATS CALLING FOR SOME REVENUE RAISERS as offsets.  Or in other words the Democrats are trying to be fiscally responsible (leads to a whole other discussion about whether Republican = Conservative).  Now the Senate wants to tack these tax breaks onto the bailout package.

LONDON (MarketWatch) -- Lost in all the political drama over the $700 billion financial rescue package is the fact that whether or not it passes, there's still going to be a very nasty recession.  U.S spending is flat. Car sales are anemic. The housing market is shot. Unemployment is rising. And, of course, the entire financial sector is in disarray.

In addition, the U.S. government is $10 trillion in debt, and that doesn't even count the Fannie and Freddie bailouts and debt guarantees to make problem-bank mergers happen.

It gets even worse.

Because the U.S. is clearly headed into a downturn, costs for unemployment insurance payments will be going up and additional costly stimulus programs will undoubtedly be demanded and approved. This will happen even as tax receipts will be going down. And interest payments on the ever-growing U.S. debt will eat up greater and greater chunks of the budget.

Basically, if you're a congressman and you think a $400 billion budget deficit is bad, you probably haven't seen anything yet.

Of course Congress could finally let the dreaded alternative minimum tax apply to the 25 million middle class taxpayers it threatens every year. But that's probably a political non-starter. And eliminating the mortgage interest rate deduction, while a fiscally responsible move, can't happen if you're trying to stimulate housing sales.

So faced with all that, there's a credible and defensible argument against a bailout bill that will cost yet another $700 billion. The entire notion of a "Wall Street bailout" is hugely unpopular with American voters on principle. And voters will wind up thinking the bill is a failure because they're going to be in a recession anyway.

- Tom Bemis, assistant managing editor 

[Reality]

Would you rather owe money to the mafia or the IRS?  (Whether they fabricate the amount you owe them, if you truly owe them anything, or not.)

[Reality]

http://abcnews.go.com/Blotter/Story?id=5973452&page=1
After Bailout, AIG Execs Head to California Resort
Rescued by Taxpayers, $440,000 for Retreat Including "Pedicures, Manicures"

In part:
Rooms at this resort can cost over $1,000 a night," Congressman Henry Waxman (D-CA) said this morning as his committee continued its investigation of Wall Street and its CEOs.

AIG documents obtained by Waxman's investigators show the company paid more than $440,000 for the retreat, including nearly $200,000 for rooms, $150,000 for meals and $23,000 in spa charges.

[jemagee]

You know, in about 15 years, the lament will be 'where have all the great minds gone' in terms of business...there is a right way and a wrong way to work with CEO compensation, and while most companies screw it up in the wrong direction one way, putting the government in charge will just screw it up in the other direction so that just like poiltics, the best and brightest will find somewhere else to.

Congress, per usual, over reacts, with a sledgehammer, and doesn't think it through or come up with reasonable well thought solutions for the CORE problems...again, toilet paper on a severed artery.

You can't excise a tumor with a butchers knife.