The only game in town

What if there were only one casino in your town… what if they gave special deals on odds, credit (loans), and other financial transactions to “special friends” and high rollers… would you still play there? What if you decided not to play “the only game in town” with the odds stacked against you because you weren’t a friend or high roller, but then you discovered that the casino was stealing milk money from your kids on the school playground in order to offer those special odds? Where did you think all that money would end up coming from? In other words, the casino wanted you to know that not only were they the only game in town, but you had no choice but to play, despite the fact that you didn’t like the odds?

What would you do? Move to another town, perhaps? Ah, but guess what, this casino is a chain. It’s called Wall Street/ international finance…

Awhile back, I mentioned a series of articles which John Sacowicz has been writing.

Here’s a bit of what John had to say in part five of that series:

Talk about bragging rights! The Bohemian may be small, but we called it. And we scooped most of the national press. Even the New York Times. Even the Wall Street Journal.

Yup. In our last article on the Fannie Mae-Freddie Mac bailout (”To America with Shame,” Aug. 6), we highlighted a little-noticed paragraph in the 694-page housing bill passed this summer that authorized an increase in the national debt ceiling to $10.615 trillion. It was the first time in U.S. history that the limit on government spending grew to a mind-boggling 14 digits. One paragraph. Nothing sexy about it at all. Called Section 3083, “Increase in Statutory Limit on the Public Debt.”

But what separated us was that we did the math and saw what it implied. Increasing the national debt ceiling to $10.615 trillion meant that the new debt ceiling was being increased by $800 billion from the old debt ceiling. And what did $800 billion really mean, buried as one paragraph in a 694-page housing bill, of all places?

It meant that, despite what we were being told by Congress, the president, the treasury secretary, the Federal Reserve Bank, the national press and everyone else, nobody really knew what the housing bill would cost taxpayers. This week, of course, all of us now know.Back in August. estimates were in the $25 billion range. The Congressional Budget Office actually went on record with this number. Many thought that number was too high. The Cato Institute’s Gerald O’Discroll Jr. said the $25 billion estimate was “on steroids.”

Now, don’t everybody try running for the door at once. That could cause martial law to be imposed. And Lord knows what would happen if FEMA got put in charge… yes, Lord knows.

Looking for the silver lining- if you bought precious metals a couple of days ago, they are now worth a fair bit more today than they were a few days ago. Did you happen to have a few million lying around looking for a place to park and exquisite timing? No? Neither did I. I figure someone probably did, though.

As long as you believe it’s the only game in town, it will be. And you’ll be playing it whether you want to or not. House rules.