Perhaps you’ve heard the phrase, “There is no silver bullet for the national debt.”

How about a golden gun that fires logic?

Targets? The national debt and the derivatives market that led to the 2008 Wall Street bailouts.

Driven by commission, Wall Street was selling derivatives like crazy. Unfortunately, many derivatives are unsafe investments and yet were classified as safe.

When large numbers of the investments began to fail, the banksters didn’t have enough money to cover their responsibilities to their investors (the ones who bought the derivatives from the banksters). So, the losses got passed to us taxpayers. Hence the phrase, “Banks got bailed out, we got sold out!”

Of course, it would not be fair if I did not mention the government’s role. Government made it too easy to get a loan, thus setting the stage for many more risky derivatives to be created. In addition, the government did away with the Glass-Steagall act during the Clinton administration, if my memory serves. Glass-Steagall might have prevented Wall Street’s current antics.

To put things in perspective, refer to On this day in 2008, there was $558 trillion in derivatives. Today, it has shot up to $743 trillion. It should be noted that derivatives are growing faster that national debt.

I believe that allowing the derivatives to grow unabated is a major threat to the economy.

A sales tax is placed on many items that we buy. Gov. Paul Lepage and U.S. Rep. Chellie Pingree even teamed up to tax Internet sales.

Why not pull the trigger of the golden gun and place a tax on the sale of derivatives to pay down the national debt and slow the scary growth of the derivatives market? Bang.

Tobey McAfee


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