Tuesday, September 30, 2008

More on the bailout $700 billion business welfare plan

In my housing post, I spoke of how the bailout is simply going to delay the necessary correction in the markets and how delaying a correction simply prolongs the pain during the correction. Here's two good posts that explain better than I could why I think the bailout is such a bad idea. From the one over at The Liberty Papers:

As I noted on Monday, the bailout bill would not solve any of the problems that we’re facing today, it would not eliminate the pain that will be felt thanks to years of easy credit and easy money policies by the Federal Reserve Board, Congress, Fannie Mae, Freddie Mac, and the rest of the banking industry. All the bailout will accomplish is to spread that pain throughout the economy and delay into some unknown point in the future the day of reckoning that must come for the mistakes that have been made. If the bailout happens, it may mean that the rest of this year, and the next several years will be better than they might have other wise —- but it will also mean that the dollar will continue to fall in value, inflation will increase, federal spending will go up even more than it already has, and the budget deficit and national debt will continue to soar. Someone will pay the price for that, and if the Federal Government takes ownership of the mortgage debacle, that someone will be the American taxpayer.

I honestly don’t think many people are thinking that far into the future, though. The markets are operating based on an insane combination of hope and fear, and the politicians are being guided by the same psychology into passing a bill not because they think it might work, but because they hope it will.

That, my friends, is a recipe for disaster.

What he said. The bailout has solidified my vote of "None of the above" in the presidential race this time around. I've been debating over the past few weeks whether or not I could stomach a vote for McCain. His posturing over and support of the bailout sealed the deal. There's no way I can in good conscience support a politician who thinks this is a good idea; I think this is that big of a deal.

Oh, and that principled stand so many in the House took against the bill? Apparently their threshold for giving government money to failed industries lies somewhere between $25 billion and $700 billion. Money quote from the article:

Japanese automakers Toyota Motor Corp and Honda Motor Co could be eligible for the low-cost federal funding but have said they have no intention of applying for the loans.

Anyone have any idea why that might be? God forbid that we actually REWARD companies for being successful instead of simply leveling the playing field when incompetent companies fail.