Obscure Tax Modification

In recent articles I have advocated recapitalization of the financial sector from the bottom up, pluralizing the marketplace to keep everybody honest, accountable, at competitive prices like a free-market economics verifiably does.

The opposite is being done.

Last week, for example, the IRS made a significant change to bank accounting rules that allows a bank that acquires another bank with bad debt to immediately write down the debt and write it off its current tax liability.

A front-loaded tax credit is being used to encourage consolidation of the financial industry to "recapitalize" it. This little-known modification will encourage the problem--consolidation of the capital--by selling it as part of the solution to remove the toxic-debt from the "system."

Not only will it encourage the problem, but it will put the burden, the cost, of the problem on the taxpayer--The People. It fits the Hamiltonian model, the "system," perfectly.

The taxpayer, by definition, will not be the consolidated capital. It is being "credited" for causing the problem. So the benefit trickles up, the cost trickles down, and The People are dependant on a financial system that is increasingly too big to fail, which results in high-risk leveraging that causes the problem.

Just as obscure is a provision in the Stabilization Act that makes any agreements that restrict merger and acquisitions unenforceable, making the probability for consolidation of the financial sector--just the opposite of what we need--all but certain.

Being made to pay the perpetrators of what ails us to peprpetrate some more is completely perverse, and that it is with the force and legitimacy of public authority is an absolute outrage! This is government for plundering The People!

Fixing the problem with more of the problem does not instill confidence!