In the midst of bailout talks to "rescue" America's over-exuberant lending and financial institutions with $700 billion, the House has passed a second, more reasonable plan to help the actual citizens of America deal with rising inflation, lost health-insurance coverage and unemployment.
It's a mere $61 billion to fund the plan. Meanwhile the White House, gets this, says it will veto the plan because it "would cost too much."
Indeed, past bailouts for big business cost the US no more than $125 billion in the case of the 1989 S&L debacle and no more than $250 million in loan guarantees in the case of Lockheed Aircraft Corp.'s 1971 bankruptcy bailout.
Do I think that the government should bail out Wall Street and the financial services sector? Absolutely not! How many more industries will feel that now is the time to get free money by claiming insolvency if money, without checks and balances, is indiscriminately distributed to every institution with open hands? It is the free market that got us here. Let the free market decide who's going to take the hit and who's going to scoop in and take any profits that remain. [Note: I've just posted a video of AARP's top executive, and what he says about the matter at "AARP's CEO Addresses the Economic Crisis."]
Meanwhile, it's the prudent investors -- average consumers relying on their property values and managed mutual funds to get them to and through their golden years -- that will and are being hit the hardest. Let's hope Congress, as it nails down its solution to the problem either tomorrow or Monday, makes sure the White House keeps this in mind.
rate
email
print
link to this page
Comments: 25
The year 2006 was the biggest year on record for privately-owned bank, financial institution and credit union loans. 2006 was also the year that Alt A loans -- the most-likely loans to default -- hit their highest peak. Looking at these new numbers, it's not surprising that we're where we're at right now....
We could have had a mortgage. But we are living in a rented place. At least WE ARE NOT IN THE STREET NOR ABOUT TO BE. I could have had more credit cards. I don't even have one. I am a reasonable person who refuses to participate in these kinds of games.
It would appear that Bush and Co are trying to make sure all the big corps get their last goodies before he exits. Meanwhile, for the poor and middle class, it's the shaft again.
I use only debit/check cards to buy anything - if the money is not in my account, I can't afford it.
Maybe I'm being naive, but what is so hard for so many people to grasp about this concept?
People with 29 maxed out credit cards?
People borrowing from Peter to pay Paul?
People paying their expensive mortgages with high interest credit cards?
People buying designer clothing and flashy cars just to keep up with other people who are also overspending?
It just doesn't make sense.
Even without the inclusion of auto-maker-bailouts, this is the most active ANY administration has been on bailing out the private sector, and the dollar amounts just so far this year are astronomical. So, hear, hear to you Christine for calling this to our attention.
My point exactly. Thank you Richard for summing it up so nicely.
Maybe I just wish that I could borrow money at near zero percent interest.
In any event, thank you Ms. Meacham.
Great history on the Black-Scholes modeling of derivatives pricing. Definitely worth checking out.
Also, re: your comment ["I don't spend what I don't have" to a more effective "I don't spend what I won't have when payment is due."], I agree! Your long-term views are indeed what's needed to help every American come out on top as the credit markets collide.
Chrysler should have showed us that. Look how long it took them to pay off their debt, not until the head idiots were replaced.
We'll have to rely on the free market to pull us out. It would be nice if congress would instead of bailing out the businesses, use that same money to kick start the economy through the people.
There are a lot of ways the government could benefit this situation, and throwing good money after bad is not it.