Economist Martin Weiss appeared on C-Span Mar. 18, and his advice to US citizens was blunt. When you have a global collapse, there’s always a day of reckoning. “Better to face the music now,” he said.
Weiss echoed the opinion of many of us when he implied the bailouts were a bad idea. Only Weiss held that opinion before bailouts became a daily household word. In September, 2008, the Florida based expert submitted a white paper to the Senate Banking Committee and to the House Financial Services Committee. The title: “Proposed $700 Billion Bailout Is Too Little, Too Late to End the Debt Crisis; Too Much, Too Soon for the U.S. Bond Market.” But alarm bells sounded long before that--by the government no less.
Weiss said other warnings came out long before the economic meltdown, but mainstream media didn’t pick up on them and most of us didn’t hear them otherwise. “The General Accounting Office issued a warning in 1994 regarding financial derivatives,” he said. He also noted his warnings were ignored for “so many years.”
Another white paper published at his website Money and Markets confirms his claim. That paper was titled, “How Federal Regulators, Lenders, and Wall Street Created America’s Housing Crisis — Nine Proposals for a Long-Term Recovery.” Written by Weiss Research’s Michael D. Larson, the paper was published in July, 2007.
In his Sept., 2008 white paper, Weiss warned about the sharp impact debt will have on the economy. “The Office of Management and Budget (OMB) projects the 2009 federal deficit will rise to $482 billion. But adding the cost of announced and proposed bailouts, now approximately $1 trillion, it is undeniable that the federal deficit could double or triple in a short period of time, driving interest rates sharply higher and aggravating the very debt crisis that the bailout plan seeks to alleviate.”
He also said, “Congress should clearly disclose to the public that there are significant risks in the financial system that the government is not able to address.”
In my opinion, Rep. Louie Gohmert (R-Tex.) and award-winning actor Russell Crowe offered better ideas for the bailout than we’ve seen from the Bush ‘43 or Obama administration. At least their ideas would have benefited us Main Streeters.
Rewarding lenders and financial institutions who created this quagmire is not a good idea. “Government is trying to short circuit a depression,” Weiss said.
Asked by a caller to the C-SPAN program about the validity of the U.S. taxpayer actually seeing a benefit from the bailed out companies, Weiss said, “We’re supposed to get paid back eventually, but there are two problems with that. Supposed. And eventually.”