All I've been hearing lately is the credit crunch. People, small businesses aren't able to borrow money. Yada, yada. The economy is squeezing...heading for massive recession...worst since the great depression...and so on. And it's understood that the federal government is about the only institution around with enough loot to do something about it.
I'm not an economist and this is by no means any sort of an economic study, but me and my chick have received more mailer ads from credit card companies, mortgage companies, quick loan checks, etc. over the last two weeks than ever before. Our mail box has been stuffed with the shit. And furthermore they're all offering 0% for the next year, blah, blah. All the offerings that anyone with half a brain knows is all too good to be true. And I don't have time to get down and read about the upcoming balloon payments.
But the crash looms, and the bailout awaits. The bailout that promises 800 gozillion dollars to lenders, so that they can lend more is on the table. And that helps out the people who are losing their homes how? This helps the small-businessman how? By probably weakening the dollar and increasing inflation? Hardly. Remember, this is all shortly after the administration passed legislation making it harder to file bankruptcy, (wiki link) which wil make it harder for longer for financially strapped individuals...not the banks though.
Maybe I’ve just lost a little too much trust with the system…I feel like I’m being duped here. That I’m supposed to want to help out these companies who made bad investments. Where was the government when I lost a group of money, from my own poor investing decisions in the early 2000s? This whole thing just seems to me like another fear tactic by politicians, with the news media toting the line. I’m just waiting to hear that there may be WMDs hidden under the NY Stock Exchange, because capitalists hate freedom or some load of the like.
I know we’re in tough financial times, but is this bailout really the only answer? Is there no help for the individual who’s in default on their mortgage? Maybe a gov’t sponsored low interest loan to help make ends meet and catch up on their mortgages? Maybe a bankruptcy judge to renegotiate some of the ballooning ARMS? Maybe massive public works projects getting people back to work, like they did to get us out of the great depression? How about some sort of bottom up approach instead of the tried and failed trickle down method that seems to only grow the divide between the haves and the have-nots. What help is it, to the average person in financial trouble, if Goldman Sachs' balance sheet looks a whole lot greener? Our debt, yours, mine, financial institutions', the government’s…it’s all shaky debt and there’s too much of it out there. Is adding to our national debt by buying the financial firms' bad debt, so they can lend more, the only answer? Really? I don’t know, but I think Spock would say it doesn’t sound logical.
2 comments:
ummmm well for starters if we go into a depression bread will be $100 bucks....if the bailout works bread will remain $3 bucks.....
so THAT is how it helps you and I...
uhm...you seem to be confusing the terms "depression" with "inflation" which causes prices to increase, by say, injecting 700 billion of new capital into the monitary system. (I.E. the Paulson bailout bill). With a depression, it's about opposite(high unemployment usually goes along with low inflation)... that is unless you're talking about "Stagflation" a deep recession combined with high inflation. In that case you may be correct. I remember that much from econ101.
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