Betty Lou sent me an e-mail she received from Jim Babka, President, DownsizeDC.org, Inc., on October 1, 2008. This is an excerpt from that e-mail:
The bailout fight is not over, and the time for action is right now! Since the bankers lost by just a 12 vote swing in the House on Monday, the Congressional leadership has regrouped. In their desperation they’ve decided to violate both the Constitution and ALL the principles of the current Downsize DC Agenda.
The Senate is set to begin debate and VOTE TONIGHT, after the Jewish holiday Rosh Hashanah is over. Rosh Hashanah is the Hebrew New Year, but, as the quotes above indicate, there’s nothing “new” about the games being played on Capitol Hill.
Author G. Edward Griffin wrote about our central banking system,
The name of the game is bailout…. Although national monetary events may appear mysterious and chaotic, they are governed by well-established rules which bankers and politicians rigidly follow. The central fact to understanding these events is that all the money in the banking system has been created out of nothing through the process of making loans. A defaulted loan, therefore, costs the bank little of tangible value, but it shows up on the ledger as a reduction in assets without a corresponding reduction in liabilities. If the bad loans exceed the assets, the bank becomes technically insolvent and must close its doors.
The first rule of survival is therefore to avoid writing off large, bad loans and if possible to at least continue receiving interest payments on them. To accomplish that, the endangered loans are rolled over and increased in size. This provides the borrower with money to continue paying interest plus fresh funds for new spending. The basic problem is not solved, it is postponed for a while and made worse.
The final solution on behalf of the banking cartel is to have the federal government guarantee payment of the loan should the borrower default in the future. This is accomplished by convincing Congress that not to do so would result in great damage to the economy and hardship for the people. From that point forward, the burden of the loan is removed from the banks ledger and transferred to the taxpayer.
Does that sound familiar? Griffin wrote it back in 1994.
A lawless Congress isn’t new either. Since the bill didn’t pass the House on Monday, the Senate is going to violate the Constitution, and pass their own version of the bailout first. What’s the big deal?
According to Article I, Section 7 of the Constitution, the Founding Fathers wanted the people’s House to originate all spending bills. This was the branch that was closest to the citizenry. Members of House were to be, in the fullest sense of the word, “representatives.”
The Senate was to be a check on the excesses of the House. The President was given a veto to check them still further. And finally the Courts could put a stop to un-Constitutional spending not specifically enumerated or authorized by the Constitution.
But now, with the bailout, the Senate is getting things backwards. They have no bill from the House.
But it gets worse.
New Hampshire Senator Judd Gregg, appearing on TV last night, suggested that they had a way around the Constitution. He said it’s done all the time. The Senate will simply attach its bailout bill to a current “CR” — a Continuing Resolution. In other words, they’ll attach it to another, unrelated bill — and send it back over to the House.
Not only is this un-Constitutional — a violation of Article I, Section 7 — but this Judd Gregg approach also breaks the principle of the One Subject at a Time Act.
And the rush to get this done printed and voted on in a hurry violates the transpartisan principles of the Read the Bills Act.
Now as if that’s not all bad enough, Judd Gregg wasn’t done being reckless. When asked about potentially suspending the “mark-to-market” rules, he said that the Congress didn’t have the specialization necessary to address that issue. Instead, what to do about mark-to-market needed to be left in the hands of the (unelected) “experts” at the Securities and Exchange Commission.
Trace the dangerous logic here: Congress is expert enough to authorize, in one bill, the single largest increase in federal government spending ever, but not qualified to address a little accounting rule!
By the way, that too is a violation of Article I. Only Congress has the legislative power. That authority cannot be delegated to unelected bureaucrats, or anyone else for that matter. But such illegal delegation happens routinely, and it’s why we wrote the Write the Laws Act.
Of course, Congress has no authority to save the markets or give such vast, discretionary authority to one man or one agency of the government. So it violates the principles underlying the Enumerated Powers Act as well – said act would compel Congress to cite, chapter and verse, from where, in the Constitution, the bill they’re voting on is authorized.
And for the ballooning of deficit and debt, this bill is unmatched, but don’t expect Congress to tighten its belt, as we propose with the Fiscal Responsibility Act. This bill, also known as H.R. 500, if passed into law, would trigger a cut in Congressional pay for each year in which the federal government runs a deficit.
Maybe they’d be more interested in changing arbitrary rules like mark-to-market, than expending $700 billion, if they had to take a pay cut. But since you and your offspring are going to get the bill, why
should they be concerned about the expense?
So this bailout violates the Constitution and the entire Downsize DC Agenda. ON THESE MORAL PRINCIPLES ALONE, YOU, THE DOWNSIZE DC ARMY, HAVE SUFFICIENT REASON TO OPPOSE THE BAILOUT.
And since the vote is going to happen in the Senate tonight, and probably in the House on Thursday, we cannot let up on the pressure — even though it appears it will pass the Senate. We encourage you to use our proprietary Educate the Powerful System to get your voice heard, because we must still defeat this in the House.
But the information we’re getting about the bailout gets even worse. On the very same program on which Judd Gregg appeared, one of the Congressmen opposing it, Rep. Brad Sherman (D-CA) also appeared. Hang on to your hats, because this may be the very reason even $700 billion won’t be enough to do the job it’s proposed to do. It provides bailouts to foreign investors too. Sherman said,
…you have to read the bill. It’s very clear. The Bank of Shanghai can transfer all of its toxic assets to the Bank of Shanghai of Los Angeles which can then sell them the next day to the Treasury. I had a provision to say if it wasn’t owned by an American entity even a subsidiary, but at least an entity in the US, the Treasury can’t buy it. It was rejected.
The bill is very clear. Assets now held in China and London can be sold to US entities on Monday and then sold to the Treasury on Tuesday. Paulson has made it clear he will recommend a veto of any
bill that contained a clear provision that said if Americans did not own the asset on September 20th that it can’t be sold to the Treasury.
Hundreds of billions of dollars are going to bail out foreign investors. They know it, they demanded it and the bill has been carefully written to make sure that can happen.