Specifics of the government plan to bail out the economy are difficult to assess. Unless you work in the financial industry or study economics daily, it’s hard to grasp the scope and intricacies of a plan that could ultimately spend 500 billion to 1.3 trillion dollars warding off what one expert termed, “a category 5 financial storm that really threatened the entire global financial architecture.”
One thing becomes clear watching the latest comings, goings and speechifying of the the Treasury secretary, Federal Reserve chairman, president and top congressional leaders: Something needs to be done.
Treasury Secretary Henry Paulson noted the massive influx of government cash into the banking system is a far better and more cost effective behavior than doing nothing while the economy stumbles into what is being called a “crisis.”––maybe a euphemism for The Great Depression: Part II.
Yes, we’ve seen the usual government wrangling on specifics of the plan. But it appears the White House and both parties feel direct government intervention to prop up banks is necessary now to avoid ultimate meltdown of our national economy.
It takes a depth of knowledge outside of what most Americans understand to grasp all the inter-connected ties linking the credit crisis, the mortgage disaster, our stock market collapse, failure of key investment banks, and dire warnings that retailers are to be left with lumps of coal this holiday season.
As average Americans, we’re left to hope what we’re being told is the truth: a huge expenditure from our collective tax dollars must be spent, or we could be boarding up windows and standing in soup lines. Even if we feel cause for concern watching our national government expand its reach into private companies, most all of us lack the knowledge to effectively dispute government claims that, barring such intervention, disaster looms.
We hear other skeptics ask if this is truly a Main Street problem and not a Wall Street one and whether the bailout package benefits middle class Americans or just those happy few who ran large investment banks (and our retirement accounts) straight into the ground. A second government rescue plan already in the works is designed for us, the masses, further fostering notions that the first save was primarily to unsling some privileged fannies.
Right now with much doubt among Americans that our national government could or would do the right or fair thing, here’s a chance for elected officials to re-earn some trust.
With economics more an art than a science, even if statesmen do the right things, the economy could continue to slide. They can’t magically create new wealth or force it to be spent. Nationally and personally, bad money decisions bring consequences somewhere down the line.
But a failed try in Washington is one thing. Favoritism is something else. If politicians are unfair, doling bailout funds selectively, adding layers of entitlements to investors or go-aheads to profit-taking, that’s another thing entirely.
So hey, big government, want to see average Americans ready to throw tea in the ocean again? Then let us discover our tax dollars did little more than bail out some companies that went right on paying fat-cat salaries to dumb-butt executives who made the calls that caused this mess in the first place.
We’d like fairness across the board, including where government’s general goal is “keeping people in their homes.” Folks who bought too much house or displayed little personal responsibility at that jump deserve a second chance, not a free house.
If government buys these at-risk mortgages (something under discussion),they’d best collect what they’re owed from these homeowners eventually.
What America needs, both for Wall Street and for many homeowners, is a bail out but not a handout. |
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