How to blow $700 billion

I don’t know where to start….  Let me get this out of the way – I think the $700 billion bailout of Wall Street banks is a bad idea.  A very bad idea.  A very bad idea for many reasons.   I’ll try to explain some of them.

For starters, here’s what the Telegraph in the UK thinks of the bailout.  The headline reads: Bail-out enslaves US taxpayers Here is how the story starts:

“To preserve their [the people’s] independence, we must not let our rulers load us with perpetual debt. We must make our selection between economy and liberty, or profusion and servitude” – Thomas Jefferson

There was a time, early in America’s history, when its leaders believed in financial discipline. No more. Perpetual debt, which Jefferson feared would enslave future generations, is clamped on Uncle Sam’s undercarriage like a ball and chain. US public borrowing is $9.8 trillion – and rising.

Jefferson, America’s third president (1801-09), is widely regarded as the White House’s most intellectually gifted occupant. He believed that “banking institutions are more dangerous to our liberties than standing armies“, and that “the principle of spending money to be paid by posterity … is but swindling futurity on a large scale.”

I couldn’t agree more.  But my opposition to the bailout goes deeper than simply agreeing with a long dead President about the dangers of debt.  It’s a philosophical disagreement that goes to the roots of the principals that our country was founded on.

I don’t think the Federal government should be involved in bailing out private companies – or homeowners.  We have not granted the Federal government the right to regulate executive pay, decide which companies get preferential treatment regarding loan rates and terms, or decide which group of citizens (or companies) receive direct government buyouts – or indirect preferential write offs of bad debt.

In other words, it’s unconstitutional.  I hope someone has the guts to file a suit and get the case heard in court.

So if this is such a bad idea, why do stocks rise whenever it looks like a deal is close?  That’s easy.  Stocks (especially financial stocks) stand to gain if the US taxpayer takes away their bad debt.  But we (the US taxpayer) are stuck bailing out companies (and people) who made stupid decisions.

Here’s my plan – let them go broke.  Let the companies that made (and sold) these stupid investments go broke and disappear.  Let the people (and companies) who bought these toxic investments go broke.  Kick their stupid, bought-more-house-than-they-could-afford-asses out of those houses.  Let the banks go broke and disappear.

Others – who have managed their money responsibly – will be here to buy up the houses and the toxic debt.  Yes, they will buy the houses and the debt at pennies on the dollar – so what?  Broke companies and people can’t buy stuff anymore – that’s a good thing!

We’ve been collectively living beyond our means for way too long. It’s time to get our budgets balanced – personal and government so we can pay off old debt and get moving forward again.

One other thing – the government doesn’t have $700 billion to use to bail out these stupid assholes.  We will have to borrow it.  That will increase the debt buy trillions by the time it’s paid off – and we already owe over $10 trillion at the federal level alone!

I’ve emailed my congressman and senators to let them know how I feel.  I encourage you to do the same.  Speak up – maybe we can stop this crap before it gets passed.  If you don’t email, call, or fax your representative – shut the fuck up and don’t bitch about the economy, congress, or Wall Street.  You’ve forfeited your right to complain.

gk

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