There is an interesting article from Bloomberg today on the Fed’s refusal to identify the recipients of nearly $2 trillion dollars worth of emergency loans. This is why we need to measure the “need for a bailout” with the potential for corruption and waste that such a centralization of power and money creates (beyond the moral hazard of believing the government has the right to take the fruits of one person’s labor to save an institutions and other person’s from their own failures). We need to start thinking critically about better solutions, rather than allowing our emotions and fears lead us to place great authority into the hands of a select few that claim they know better how to use our money than we do.
In 2008, the IRS will collect about 1.2 trillion in personal income taxes, less than the total cost of government bailouts this year, and less than the amount Bloomberg claims the Federal Reserve is hiding.
Why wouldn’t it have been a better decision to suspend the federal income tax for an entire year instead of bailing out the big boys? It would have been cheaper. Some may call this proposal crazy, I call it logical. What I call crazy is to trust the same people that encouraged the housing bubble to fix the financial crises the bubble-burst created. This would surely make your mortgage a little easier to pay, or a buying a new car more enticing. And, you would know where all your money went (or rather, stayed); in your pocket. Instead, we are left with a stock market still in turmoil, inflation knocking at our door, and a rat race to find out where all our money has gone.
For further reading, here’s an excellent site on the history of the federal income tax and what your dollars are actually used for.