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Senator Bernie Sanders, Vt

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September 24, 2008 – Comments (3)

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Financial Crisis

Dear Secretary Paulson:

As a representative of the Bush Administration, you have proposed a financial bailout program of $700 billion – over $2,000 for every man, woman, and child in the country. We are appalled that your proposal puts the cost of this bailout on average Americans; that it contains no provisions reversing failed deregulatory policies; that it allows executives at these failed institutions to continue to make exorbitant salaries and bonuses, and that your proposal contains no help for average Americans who themselves are facing severe economic hardships.

While the Administration has quickly rallied to help Wall Street, it has ignored the needs of the declining middle class. Since President Bush has been in office the wealthiest people in this country have made out like bandits and have not had it so good since the 1920s. The top one-tenth of one percent now earn more income than the bottom 50 percent of Americans and the top one percent own more wealth than the bottom 90 percent. Incredibly, the richest 400 people in our country saw their wealth increase by $670 billion during the Bush presidency.

Having mismanaged the economy for 8 years while continually insisting that, “The fundamentals of our economy are strong,” the Bush Administration, six weeks before an election, wants the middle class of this country to bail out Wall Street to the tune of one trillion dollars. Meanwhile the wealthiest people, those who have benefited most from Bush’s policies and are in the best position to pay, are being asked for no sacrifice at all. This is absurd.

Any plan to clean up the mess on Wall Street must:

Ensure that middle income and working families are not the ones who are paying for this bailout by Imposing a five-year, 10 percent surtax on income over $1 million a year for couples and over $500,000 for single taxpayers. That would raise more than $300 billion in revenue over five years; Ensuring that assets purchased from banks are realistically discounted so companies are not rewarded for their risky behavior and taxpayers can recover the amount they paid for them; and Requiring that taxpayers receive equity stakes in the bailed-out companies so that the taxpayers’ assumption of risk is rewarded when companies’ stock goes up.

Taken together these three provisions will substantially reduce the likelihood that this bailout will end up on the backs of average American taxpayers.

Include a major economic recovery package which puts Americans to work at decent wages. Among many other areas, we can create millions of jobs rebuilding our crumbling infrastructure and moving our country from fossil fuels to energy efficiency and sustainable energy. Further, we must protect our must vulnerable families from the very difficult times they are experiencing.

Repeal the disastrous de-regulatory legislation that facilitated this crisis. End the danger posed by companies that are “too big too fail,” that is, companies whose failure would cause systemic harm to the U.S. economy. If a company is too big to fail, it is too big to exist. We need to determine which companies fall in this category and then break them up.

In closing, we believe it is appropriate to act quickly to address any systemic danger to our economy. But that does not mean that we need to give a blank check to the financial sector.

Sincerely,

Senator Bernie Sanders

3 Comments – Post Your Own

#1) On September 24, 2008 at 4:26 PM, givmeabreak (29.06) wrote:

You have to be kidding me with: "Ensure that middle income and working families are not the ones who are paying for this bailout by Imposing a five-year, 10 percent surtax on income over $1 million a year for couples and over $500,000 for single taxpayers. "

Between the spelling errors and illogical proposals, this has to be a hoax.

I am a middle income American, and still find that proposal infuriating. It implies that anyone making over 1/2 a million or more is somehow guilty of something.

What does making a million dollars have to do with big banks and their bad debt?

Unreal. But then again, the guy is from Vermont...

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#2) On September 24, 2008 at 6:16 PM, jstegma (29.25) wrote:

I'm fine with the tax proposal, but let's beef it up to pay off the whole $700B.  While we're at it, let's just pay off the whole national debt by soaking these pigs.  Yup, that's right, I said pigs.  These people making more than a half a million a year squeal like no other when asked to accept a tax increase.  Pigs.  Big and fat and ready for slaughter.  I can just about smell that bacon cooking already, and if someone wants to get my vote, I expect them to bring it home for me and my middle class associates (we make less than half a million a year).  The compromise should be that we won't have any more deficit spending (so sorry, no universal health care).  If we have a deficit, then the tax increase on the pigs immediately expires.  It's actually a good deal for the rank and file Republicans who, believe it or not, make less than $500k per year, as well as Democrats who actually have jobs (yes, a good number of them actually do).

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#3) On September 24, 2008 at 7:11 PM, devoish (98.26) wrote:

Givmeabreak,

Where are you going to get money to pay the bill if not from where it is?

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