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What do you think about the government's debt?
The $700 billion govt. bailout of the financial industry will raise the national deficit to $11.3 trillion.
This increase means that even more will be going towards the interest and less towards other programs. Both McCain and Obama are making promises for new programs in their campaigns, but with the debt rising as it is, neither candidate will be able to make changes this year or next.
On one hand, it's scary to think what will happen if financial institutions collapse without intervention. On the other, we're still in trouble if our country goes deeper and deeper into debt.
How are consumers supposed to reduce debt if the government can't even do it?
The stock market plunged both times that Congress has come close to passing the Wall Street Bailout Bill. Wall Street knows this bill is a *steaming turd* even though Congress sprinkled some raisins on top of it this time around. And this from the people who will be receiving this unearned income!
With the tax incentives and other pork on the bill, it is still an unfunded 750B gift to banks. And that is if you live in fantasy land and assume this cash bonanza won't encourage others to come forward with their hands out. I predict this balloons to $1.25T within a year.
There are three issues here: wall street bankers losing their shirts, homeowners losing their houses, and the regulations that created the environment that let this happen.
So how about we split this up into three bills:
1. Bail out those greedy corrupt institutions which let (nay, encouraged) this happen. To this I would allocate -zero- dollars. They deserve nothing. Instead I would sooner discuss ways of protecting the people who invested in good faith in these companies who've been wiped out.
2. Bail out those irresponsible people who can't afford the homes they bought. I'd let them walk away owning nothing. The property would be auctioned with the proceeds going into a pool to help our with #1 above.
3. Repeal the inane laws and regulations that encouraged this crisis. Add some oversight while we're at it. The dream of everyone having a home is a good one. The only-government-could-think-of-it (non-)solution of regulating this dream into reality borders on childish. Too bad congress couldn't work hard and creatively enough to find a way to allow people to earn enough money to buy the homes at fair market value. Easier (and of course more headline-grabbing) is to coerce quick-fix regulations onto producers, forcing prices downward artificially. You can't fool the free market system forever.
The Bailout is the worst possible solution to a terrible problem. It makes no sense to me to bankrupt the American people in order to prop up the institution that caused the problem. It also makes no sense to me that we should allow the government to manage any bailout given that our Congressmen and last 2 presidents are complicit in this event.
I'm scared to bits about this. I just have this feeling that all of latin america, along with China and Russia, are laughing at all of this and just waiting for the dollar to crash and establish a new world order.
That's my paranoia talking. The more likely problems are that (1) taxes are going to go up for everyone no matter what political party holds the white house, (2) more people are going to lose their jobs and homes, and be completely unable to pay off their debt, potentially leading to unprecedented poverty and crime, and (3) cost of living will skyrocket, making day to day living pretty difficult...something this country hasn't really seen in 80 years.
I am hoping our government can be smart about this and fix things correctly. Though I keep going back to that book, "The Shock Doctrine," that claims that this administration in particular is just waiting for disaster as an opportunity to push through sweeping legislation that screws ordinary citizens and makes the rich richer. Naomi Klein is a scary prophet.
This issue is fascinating to me. I'm trying hard to understand the balancing act going on right now... bail out the companies and risk this... don't bail out the companies and risk that ...
Our economy is so closely tied to global markets. I heard one talking head explain it this way -- if wall street goes south then less money is made and put into the economy, people lose jobs, they lose their homes, the property taxes don't get paid, so schools don't get funding. You can see how something seemingly so far removed from us can have very local impacts.
For me it comes down to an old saying about money being the root of all evil, which sounds very ignorant, I know, but my sense is that when greed takes over people don't think about what's best for everyone.
What worries me is how I'm beginning to see what's been predicted in NYC at least -- it's becoming a place only the wealthy can truly afford and enjoy. And if you don't fall into that class you're probably poor ... for everyone else it's paycheck to paycheck without a safety net.
I think it is a very complicated situation. Government, wall street and the everyday people who bought homes they couldn't afford are all to blame. I think government involvement is unfortunately necessary now since the collapse of financial institutions is (badly) hurting everyone who has money in the market.