Thanks to Matt Taibbi’s wonderful article “The Great American Bubble Machine,” I was inspired to do some more bailout math.
It looks to me like Goldman Sachs won big on the bailout. They got a $13 billion windfall from the AIG bailout. They got a $10 billion bailout in TARP that they paid back when they were ready. They got to become a bank holding company so they can raise capital using the FDIC credit. Can you imagine how cheap your borrowing rates would be if you could offer your creditors a federal guarantee? So your credit card rate would be 2% instead of 36%.
OK, the Fed lent the big banks $8.7 trillion. However, it is secret where that went. So we will not even count how much Goldman got from that or how much they made lending that money back to the U.S. government to finance the deficits that are increasing daily, in no small part thanks to Goldman.
And we are not counting how much Goldman made on shorting the housing market or on the take down of Bear Stearns and Lehman. We bet it was a lot, though.
Now, it turns out relative to the 2008 period that Goldman paid out $4.7 billion of compensation, of which their CEO got $42.9 million. During the same period—are you ready—their total US tax bill was $14 million.
OK, so let’s compare this to a potential California bailout. California needs $24 billion to balance their budget. If the federal government gave California $13 billion and loan them $10 billion, like they did Goldman, California would have to make $1 billion in cuts. However, if California refinanced their debt with the federal credit, as Goldman has been authorized to do, that would sufficiently reduce California’s cost of borrowing, that they should then have no deficit at all.
California would not pay out $4.7 billion in bonuses. They would also not pay $14 million in taxes to the federal government. However, if California does experience a real shock doctrine budget balancing exercise, the result will be a spiral down in the economy, leading to significant cuts in tax revenues to both California and the federal government. So figure the savings for federal revenues could be substantial.
The advantage of letting California hit the wall, is that then Goldman, their partners and their syndicates can buy up lots of land and businesses for cheap. Meantime, Californians can be busy working to pay the taxes to fund the billions gifted to Goldman so they can buy California. Californians will also have to work harder to make up for their losses on their defaulted California municipal bonds.
Think of this as a neighborhood leveraged buyout — except this time it could be an entire state. Indeed, another year of this and it could be an entire country.
Ever wonder how much money could be made shorting the California municipal bond market? Surely, there is a derivatives play…
The scam is so enormous it is beyond belief. Why is no one talking about this? It is extremely simple to demonstrate the fraud.
1940’s Secret “Corporate” Tactic By Which Government Took All!
By Walter Burien
05/10/09
http://cafr1.com/Secret.html
Many people have asked for a simple explanation as to the intent behind the CAFR and what happened over the decades?
Well, in a nut shell here is the foundation block that allowed government to take it all over by investment.
It started in the mid 40’s and grew into what we have in government now seventy years latter come 2009.
Government started out as a “pay as you go” structure. By transforming into a corporate liability company over the decades, this gave them the ability to use “advance projections” to strip annual operating funds and create advance forward liability accounts whereby in doing so they were able to by stealth build numerous “wealth bases” of equity in many designated fund balances separate from the budget reports that were exclusively presented for public viewing.
When looking at the “whole picture” through the CAFR and sub investment fund reports noted per gross income, only 1/3rd is tax income whereas when you look at a budget report for the year it gives the impression per gross income that nearly 100% is tax income. Very deceptive when only one side of the coin is presented.
Budget reports are presented giving the false impression that it “is” the true financial picture and it is far from it. What is shown is primarily tax income for a “selective grouping” of accounts where tax income is collected and expended.
Review a few CAFR surplus reviews – http://cafr1.com/ShowMeTheMoney.html
The takeover by government was primarily orchestrated by attorneys, both private and acting from within the Judiciary on the city, county, and state level. Many private associations were created since the 40’s to push government along into becoming an administrative clearing house for revenue collection and control with many of these private associations calling the shots and firmly entrenched in the ever expanding cash flow from the trough. Laws were “created” as each and every push was moved forward to consolidate and expand the takeover by government as the public was masterfully entertained with distraction, misdirection, and misinformation due to the money involved.
Where has all this brought us today? I strongly recommend that all look at their local “County” CAFR. I have noticed a disturbing trend being forcefully implemented by the attorney complex in control today. (65% of Governors, Senators, and Congressmen are now attorneys) The place to look in your County CAFR is the Statistical Section at the end of the report. Currently most counties will give a ten year or a six year showing of the growth.
Many County CAFRs that I have looked at from the eastern side of the country show that over the last six to ten years:
1. There was a 100% increase in property taxes collected.
2. There was a 100% to 135% increase in the money pouring into the judiciary.
3. There was a 100% to 115% increase in the money pouring in to the prisons run by the county.
One thing I found particularly interesting was that even though their was over a 100% increase in cash flowing into the prisons, the prison average daily population had decreased in many a cases. Also I took note that the personnel working for the prisons was the largest employee base working for the county.
Now there were modest increases in social services programs for the youth, adults, and elderly, but nothing in comparison to the take being facilitated by the attorney complex for Judiciary and Prisons. It appears the trend is gearing up to “process” more people through the courts and prisons based on the money being applied.
Has the increase in processing the people started yet? By the numbers as of 2007 it appears not yet. I have a feeling though by 2010, they will be in full swing and who knows, the reader of this post may just be the lucky recipient of this expanding government service..
The middle class natives are getting restless with massive increases in forced taxation, home confiscations, job loss, and a weakened economy from the last and massive wealth transfer of trillions taken from one hand and transferred to the other hand through international market derivative manipulation. I still would like to know how many trillions of dollars ended up in those off-shore government accounts for a clear showing of profit held in “the other hand”.
I will give you an example County CAFR to look at here from 2007. It is from York, PA. – http://cafr1.com/STATES/PA/COUNTY/York2007CAFR.pdf
I am not picking on York but the showing in their statistical section is a clear example of what is brought forward in this article. Look at theirs and then look at your own county CAFR to see if the same findings are evident in your own.
We all are the end target of our government’s intent. Where they apply the money and the showing of their own growth establishes their intent.
Look and comprehend. It is your asses that are on the line in the end. Either by paying the bill or as a forced beneficiary of the structure created, or in some cases both.
When the people realize the true end result of allowing attorneys to takeover and run the show and when the people take true action to stop it, then maybe the tide will change. Until then, the stench of death will grow nearer and in most probability ever present in the air as the ever-expanding made “legal” plunder and theft out of opportunity continues unabated..
TREASON: “Treason doth never prosper; what’s the reason? For if it prosper, none dare call it treason.” Sir John Harrington, 1561-1612
Sent FYI from and truly yours,
Walter J. Burien, Jr.
P. O. Box 2112
Saint Johns, AZ 85936
email: WalterBurien@CAFR1.com
Tel.(928) 445-3532
O here’s something that might be of interest also…
King Alfred 901 “If any man is found taking usury, his lands wlll be confiscated, and he will be banished from England.”
1215 King John and King James 1566… “If a man is found taking usury, his lands will be confiscated. It is like taking a mans life, and it must not be tolerated.” pg. 32 Cantelon
Edward another interesting parallel can be found in Nehemiah 5:3-13 with the exacting of usury and the mortgaging of lands and even borrowing money to pay ones tax. It’s amazing how nothing ever changes. From Egypt to Babylon, to Palestine to Rome, Britain, and now America. Unbelievable!!!!
I love the bible!!!!
Cheers
Jerry
This is an extremely interesting video.
“The Biggest Game InTown” about the Government CAFR wealth shell game
http://video.google.com/videoplay?docid=6703413885850200097
Found this on Counterpunch:
http://counterpunch.com/brown07022009.html
Another answer to solving California’s economic crisis…..now will/would the central bankers allow such an action if attempted??that is the $24.3 billion question…or are IOU’s the solution and the downgrading of it’s bonds by Fitch to follow???
The Jun, 30 2008 balance sheet for California was release recently and can be downloaded at:
http://www.sco.ca.gov/ard_state_cafr.html
Page 28 of the Controller’s report shows:
current assets = approx $50B
total assets = $143B
Net assets $25B
Note from report:
“Changes in Net Assets
The expenses of the primary government totaled $209.4 billion for the year ended June 30, 2008. Of this amount, $87.4 billion (41.7%) was funded with program revenues (charges for services or program-specific grants and contributions), leaving $122.0 billion to be funded with general revenues (mainly taxes). The primary government’s general revenues of $110.1 billion were less than the unfunded expenses. As a result, the total net assets decreased by $11.9 billion, or 25.3%.”
Doesn’t sound like there is any emergency in California. So Net Assets decreased by $11B last year, what’s the emergency?
Catherine, would you care to comment because I cannot reconcile the media hype with the basic financial statements.
Here’s an interesting parallel from 3-4 thousand years ago. Genesis XLVII 15-22
15. So when money failed in the land of Egypt, and in the land of Canaan, then all the Egyptians came unto Joseph, and said, Give us bread: for why should we die before thee? for our money is spent.
19. Why should we perish in thy sight, both we and our land? buy us and our land for bread, and we and our land will be bond to Pharaoh: therefore give us seed, that we may live and not die, and that the land go not to waste.
20. So Joseph bought all the land of Egypt for Pharaoh: for the Egyptians solde every man his ground, because the famine was sore upon them: So the land became Pharaoh’s
21. And he removed the people unto the cities, from one side of Egypt even unto the other.
22. Onely the land of the priests bought he not: for the priests had an ordinarie of Pharaoh and they did eate their ordinarie which Pharaoh gave them: wherefore they sold not their ground.
First leveraged buyout??