An ancient letter to my congressman (11 days ago)

Eleven days ago, I faxed the letter below to my congressman. What's really a weird feeling is that it seems like ancient history now.

This was a few days after the House idiotically rejected the first version of the $700 billion rescue package intended to help unfreeze the credit markets. I had been hoping there was still time to prevent a deep recession. Time may or may not tell whether that first mistake did in fact blow it for our economy.

By the way, this letter didn't do any good. He voted against it again.

Here it is, for what it's worth:
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Congressman:

I noticed that you were one of the members who voted against the inaccurately-named "bailout" bill yesterday.

The American people were misinformed by the administration’s leaders; they botched the explanation of the package. Taxpayers will NOT have to come up with $700 billion; in fact, it might not require one dime of taxpayer funds, and might not end up increasing the national debt by even one dime. Please read an article at my blog that explains why, and diagrams the money flows in simple-to-understand pictures. Here is a link to it:

“It's not funded by taxpayers"
http://tinyurl.com/4m2pyj

To verify the accuracy of what I've depicted, feel free to call someone at the Treasury (or the Fed) who is up to speed on the package as it was proposed.

Now I'll tell you my reaction to your vote: I am highly disappointed. You may, in effect, have voted in favor of the next Great Depression. The credit freeze could trigger it, if something isn't done quickly. (The credit freeze can be identified by a skyrocketing difference between the LIBOR rate and short-term Treasuries; that's what it has been doing in recent days.)

I sincerely hope it will make you and your colleagues feel better to know that preventing a depression might not cost the taxpayers a single dime. Whoever is responsible for permitting the general public to think the taxpayers needed to come up with $700 billion, on short notice, deserves to be fired or turned out of office.

Please vote in favor of the package when it comes up again. It might not be too late to prevent widespread bankruptcies and joblessness.

Thank you,
Steve Conover
Sept. 30, 2008
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Comments

[Jarrod Myrick]

i emailed my rep right after the vote--he too voted against it--voted against it again too. i told him he was in smoot hawley territory. i guess we'll have to see what happens next.

[clive999]

Excellent stuff, fairly put, but you are using history to provide substance for your case,
unfortunately i believe we are in new teritory for the following reasons :-
1. debt as a ratio of GDP, shows the USA recovering from a figure greater than 120% so we can do it again.....the circumstances after the second world war were exceptional....the manufacturing base of the rest of the world was decimated by war, the USA had no real damage and essily converted the war machine to productive plants for cars etc, there was no real competition.
2. Borrowing on projected future growth was reasonable, hence the GDP to debt ratio equation, now there are no reasonable equations of extended growth, as world resources are declining while the population is growing.
demand will increase but the possiblilty of increasing supply is diminishing too.........
3.The supply of money far exceeds world GDP eg world GDP is approx 60 TRILLION dollars while dollars traded in derivatives etc total 12 times that......this is not sustainable
The answer if there is one is twofold
1. pay down debt to release funding for problem solving and not just to pay interest on debt accumulated
2. invest heavily in nuclear fusion to provide cheap energy for the future (in the past cheap energy has provided a way out of recessions, this is not a possibility this time but may be for future generation)
The above is my humble opinion, comments are welcome............