Two members of Congress have proposed sound bailout alternatives.

First, regarding the Wall Street bailout already approved by Congress: Representative Louis Gohmert of Texas has proposed returning all 2008 income taxes to American taxpayers as a solution to boost the ailing economy, as he believes taxpayers, rather than the government, should be using their hard-earned money to choose the economy’s winners and losers. Gohmert is preparing a bill to declare the tax holiday for January and February of 2009. According to Gohmert, “We can save more home mortgages, increase employment, and boost economic growth for a lower price tag with this plan than with any centralized bureaucratic program, all by giving the power back to the taxpayers. I am demanding that not another penny goes to executive bailouts, but these billions of taxpayer dollars should go to the taxpayers who earned them.”

According to American Solutions, citizens pay $101.6 billion per month in personal income tax and $65.6 billion per month in FICA tax. Under Gohmert’s proposed plan, all of these taxes would not be paid during January and February of 2009, and the money would stay in the hands of American taxpayers. There is a petition you can sign in support of the Gohmert plan at https://redstate.kimbia.com/taxholiday.

Additionally, Colorado Congressman Doug Lamborn has proposed an alternative to the soon to be approved Big Three automakers bailout. The bill, HR 7928, would provide incentives for people to buy cars and reduce the inventory. Lamborn’s plan would give up to a $10,000 tax deduction to each American who buys a new automobile manufactured in the United States — including Ford, Chrysler, GM and foreign auto companies that build cars in this country. The plan would also help small businesses by increasing expense limits from $250,000 to $500,000 with a phase-out cap of $1 million.

In short, there are sound alternatives to Bailout politics, but few Congressional members are willing to look toward alternatives that provide long-term solutions rather than short-term quick fixes.

Mark Knoller of CBS News writes, “With no fanfare and little notice, the national debt has grown by more than $4 trillion during George W. Bush’s presidency.”

“On the day President Bush took office, the national debt stood at $5.727 trillion. The latest number from the Treasury Department shows the national debt now stands at more than $9.849 trillion. That’s a 71.9 percent increase on Mr. Bush’s watch.”

“The bailout plan now pending in Congress could add hundreds of billions of dollars to the national debt -– though President Bush said this morning he expects that over time, “much if not all” of the bailout money “will be paid back.””

“But the government is taking no chances. Buried deep in the hundred pages of bailout legislation is a provision that would raise the statutory ceiling on the national debt to $11.315 trillion. It’ll be the 7th time the debt limit has been raised during this administration. In fact it was just two months ago, on July 30, that President Bush signed the Housing and Economic Recovery Act, which contained a provision raising the debt ceiling to $10.615 trillion.”

“A couple of weeks after he took office, President Bush addressed the Republican Congressional Retreat in Williamsburg and declared that his budget ‘pays down the national debt’. In recent years, President Bush almost never mentions the national debt.”

The Republican Liberty Caucus has issued a strong press release AGAINST the bailout.

Inflation and insolvency are hacking away at the markets. The federal government keeps throwing taxpayers’ cash at the banks, flooding the banking system with as much ‘free money’ as they can, so long as it keeps the financial system in some semblance of order.

The whole system is a giant mess.  We’ve got:

· Negative inflation—adjusted interest rates;
· Soaring global inflation;
· A weak U.S. dollar;
· A fractured financial system screaming for more government assistance;
· Soaring food and energy prices;
· The contraction of bank credit;
· A deepening economic recession in quarter 3; and
· A housing catastrophe
· And finally — a big global bear market in financial assets or stock and bonds.

We all know the government’s “rescue strategy” isn’t working. All the Fed and the Treasury are doing is deflecting another larger and more unstoppable crisis down the road.

Our government is spending your tax dollars to bail out greedy fat cats and reckless speculative institutions—simply because they’re so big. As Eric Roseman, a member of the Oxford Club’s Investment Advisery Panel says, “[The U.S.] will have to finance these and future bailouts with enormous amounts of credit, mostly from taxpayers. It’s inevitable that all this credit will eventually drain on the economy.”

Despite the Fed’s efforts, eight financial institutions have still failed—and many more are teetering on the edge. It would be naïve to think that more banks won’t fail.

There is tremendous amount of energy and oil consumption, far outweighing production.

According to RLC Adviser and U.S. Congressman Ron Paul, “History has shown that fiat money, or ‘faith-based currency’ always fails, because when governments claim this power, they always behave irresponsibly.” History shows that when one major currency goes bad, it can drag everything else down with it. For example:

· Latin America literally saw its currency crumble in the inflation—wrought 1970s and 1980s;
· Asia experienced a total wipeout of currency values in the late 1990s; and
· Russia devalued and crashed in 1998 while many other units plunged in value over the last 35 years, including Turkey, South Africa, Iceland, Scandinavia, India, Pakistan, Sri Lanka, the British pound, the Italian lira, the Balkan currencies;

Many are mistakenly pointing their fingers at the free market as the culprit behind our current economic plight. Make no mistake: Status quo U.S. economic policies are not market-based policies.

Those in charge believe in monetary inflation, which Dr. Paul refers to as “the technique used to pay for the regulatory-state and the costs of policing the world.”

The bottom line is that the free-market is not to blame for our current economic woes. We need a return to market principles if the government is going to get itself out of this mess.