How Wall Street Can Bail Itself Out Without Destroying the Dollar

[Maineman]

Excerpts from commondreams.org

http://www.commondreams.org/view/2008/09/26

by Thom Hartmann

For Grover "Drown Government In The Bathtub" Norquist, this bailout deal will work out very well. At a proposed cost of $4,780 per taxpayer, it'll further the David Stockman strategy of so indebting us that the next president won't have the luxury of even thinking of new social spending (expanding health care, social security, education, infrastructure, etc.); taxes will even have to be raised just to pay for the bailout. It'll debase our currency, driving up commodity prices and interest rates, which will benefit the Investor Class while further impoverishing the pesky Middle Class, rendering them less prone to protest (because they're so busy working trying to pay off their debt). It'll create stagflation for at least the next half decade, which can be blamed on Democrats who currently control Congress and, should Obama be elected, be blamed on him.

But there's another way: Create an agency to fund the bailout, loan that agency the money from the treasury, and then have that agency tax Wall Street to pay us (the treasury) back.

It's been done before, and has several benefits.

In the United Kingdom, for example, whenever you buy or sell a share of stock (or a credit swap or a derivative, or any other activity of that sort) you pay a small tax on the transaction. We did the same thing here in the US from 1914 to 1966 (and, before that, we did it to finance the Spanish American War and the Civil War).

For us, this Securities Turnover Excise Tax (STET) was a revenue source. For example, if we were to instate a .25 percent STET (tax) on every stock, swap, derivitive, or other trade today, it would produce - in its first year - around $150 billion in revenue. Wall Street would be generating the money to fund its own bailout. (For comparison, as best I can determine, the UK's STET is .25 percent, and Taiwan just dropped theirs from .60 to .30 percent.)

But there are other benefits.

(more)

http://www.commondreams.org/view/2008/09/26

[nykym]

1. Forward this

to Paulson et al although I doubt they will buy into it.

[whistle]

2. Exactly what I've been saying, but use a surtax of 1.5% to 3.0% of the value

...of every stock traded to build up the fund quickly and put a stop to gambling. Then clear out the toxic paper and use the fund to police and enforce regulations to prevent future abuses. When the system is again stable and clean reduce the surtax but never eliminate it.

K&R

[2Design]

3. my suggestion on how paulson should fix this without OUR money

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=389&topic_id=4052381

they need to use their own money staring with paulson