A group of Democrats are introducing a new piece of legislation of totally different from the one that’s been worked on for that last week and a half.
Based on spotty information I’ve heard on MSNBC they wish to re-introduce a ‘transaction fee’ to every securities transaction. Apparently, according to what Congressman Pete DeFazio said, the Congress doubled this small fee during the Great Depression and it was only removed in 1966. They are proposing somewhere around a 1% fee, (I think I got that right), on each transaction. They say this simple action will raise around $150 billion a year
Those Democrats emphasized that they believed this is a ‘credit’ crisis not a ‘liquidity’ crisis. Many would disagree. Many would agree. Much of the worldwide financial reality leads me to believe there is a liquidity crisis. The Asian Markets were definitely a major indicator.
There have been 5 European money center banks that have been literally saved by their central banks. Today many European leaders called directly for the US to reach some sort of stability. The US Dollar is still the foundation of international commerce. Questions about USA’s economic stability has huge ripple effects around the world. The US Congress may or may not be taking this fact into consideration. With 5 major European banks needing cash infusions I don’t think we can legitimately say their isn’t a worldwide liquidity crisis.
We will hear more about this proposal and worldwide financial realities later today or tomorrow.