As the talk continues of the federal government bailing out $700 billion for bad loans, we should also step back and ask ourselves what is the long-term cost of this, both publicly and privately. The federal government is currently racking up impressive deficits and therefore borrowing heavily from the private sector capital markets. Where will the $700 billion come from? The capital markets. Capital which could go to productive businesses will instead go to poorly managed ones. Even as someone who believes in some reasonable governmental interventions into the private sector, this one doesn't make any sense at all for our country. It makes alot of sense for the executives of failing or floundering financial institutions who gambled with everyone's money and guessed wrong.
$700 billion is alot of money, money that could rebuild our infrastructure, reinvest in newer more productive manufacturing equipment, could provide feed money to green industries, and dare I say it, be used for off-shore oil platforms. The opportunity cost of 5% of our country's GDP being spent cleaning up the work of incompetents is like repainting the Titanic even as the lower decks are flooding. And the cynical, fear-monguering Republican hierarchy does what they do best, tell the American people "if Congress doesn't give us unprecedented power, lack of oversight, and the freedom to do what we want, the economy will unravel." So let me get this straight, Republican advocates for deregulation who helped create this mess, tell us "we now need more power, even less oversight, or we'll blame our bad decisions on Democrats."
I'm hopeful that the American people aren't so stupid as to fall for this. However, I've had my hopes dashed quite regularly before.
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If this legislation is addressed within a week I wonder if "the American people" will even have a say in the issue.
(I'm contacting each of my representatives daily until this deal is done - opposing the current plan of course.)
The Bush administration was probably hoping that they could continue to ignore this crisis until after the election.
Plan B is fear mongering, which contradicts all previous official statements that all is well. This kind of fear doesn't help Republicans, because 2/3 of Americans blame them for wrecking the economy.
Cogent insights.
I was with you until: " So let me get this straight, Republican advocates for deregulation who helped create this mess."
Let me repeat, this was not created by a lack of goverment regulation. It was created by decades of government intervention in the form of the Fed, Freddie, Fannie, FHA, CRA, FDIC, etc etc etc.
Don't think for a minute what we had before was a market and now the government is going to save us.
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