With the economic times of today, it is becoming more and more clear that we are no where near the bottom of the fall. First we have the collapse of Bear Sterns, then Fanny Maye and Freddy Mack. Now AIG has been bailed out.
Does our government not realize this is not the way a free market is supposed to operate? Do they not see the spiraling hole they are digging for our country?
It is normal for free economies of the world to have times of prosperity, then times of slight decline. It is normal, and necessary. But in this day and age, we have tried to manufacture a constant climate of prosperity in our economy. The only problem is... the longer you delay a decline, the harder that decline is. The correction MUST come, there is no way around it.
This correction should have occurred years ago.... but Alan Greenspan decided to lower interest rates so low, and pump so much extra cash into our markets... that well... we had plenty of cash to spend. Top this off with the way they re indexed the way we viewed inflation in the US, and BAM... it looked like we were continuing our economic prosperity.
Now we have reached a climax where we no longer have the capital to spend... we have so much debt, that we cannot repay it, and no assets to show for it. There was one way to let our economy fall without destroying the whole thing... and that was to let the weakest of the economic institutions to fold. Let Bear Sterns fail... Let Freddy and Fanny fail... let AIG fail.
Would it hurt? Yes. But we can recover from it. But instead, the government took on the responsibility. Took over the debt. How are we going to pay for this? Higher taxes? Taxes will destroy what is left of our economy. Without more of our own money in the system, there isn't much left to build back up the system. What the government takes, it doesn't do well at pumping it back into the private sector.
The only road it seems we are going down now... is the road of a complete Socialization of our country. Where the government takes over all major industry and banking. Where the government continues to rape the rich, and feed itself... all while claiming to care for the poor, elderly, and the children.
Where will it stop? We shall see... but I fear it will not be good.
4 comments:
I actually think the bailouts were necessary-while not desirable-we simply could not have the entire system collapse.
How it got here, whether it should ever have been permitted to get here are important and different questions. Fact is-its a mess, you cant walk away from it.
Kinda like the War. Whether we should have gone is an important question-fact is where are there-gotta fix/finish it.
Ideology is important-but pragmatic solutions to real and potentially devestating problems is what is required in the real world
Problem is... the more we go down this road, the more Socalist or Facist the country becomes. Where do you draw the line?
Sure... a collapse of the banking system would be bad... but which is worse? A depression or a permenant end to our free market system?
The bailout wasnt just about banks. You had insurance companies teetering on the brink as well as tens of thousands of other companies that do business with banks/insurance companies/the bond traders etc.
Had AIG bellied up it would have triggered a global crisis-not just the failure of an American Insurance company.
It is certainly not a desirable solution to bailout private industry-but when the entire house of cards is built on it you dont have much choice. Unlike prior bailouts there is a heavy price to be paid here-AIG has essentially been taken over by the government, CEO fired, stock price all but erased. It will have to earn its way out of this mess or disappear over time.
The bailout was about TIME! All markets need TIME to self correct-the run that we were seeing removed time from the equation.
It still comes down to what you believe should happen. If you truely believe that a free market system should work, then you HAVE to keep the government out of it.
The problem is that the government has been getting involved for years in the banking and financial sector.
Whenever the government begins taking over private industry, for whatever reason... you begin a pathway down towards a facist government.... But... I guess we have been heading that way for quite awhile... where corporations and the government are in bed with each other.
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