Bailout BS

by Sal on October 29, 2008

in Economy,Politics

Those frequent visitors to this site know that I have been against the Paulson Socialist Bailout Package since its inception, and have felt that it was not necessary to fixing the economy, was put together too quickly to stem a supposed crisis that few understood, and was packed with pork that had nothing to do with the crisis, but served to boost the burden on the American taxpayer.  I have always felt that the private sector should work itself out, and do the job of fixing the economy

The bill was passed on October 2.  Twenty-seven days later, there are already signs that the skeptics were right. 

  • One of the purposes of the bailout was to instill confidence in the markets, in hope of stabilizing them and allowing for a soft landing.  Since October 2, the market has been moving like a yo-yo.  Last week, it was down 5.3%, and yesterday it climbed 889 points to over 9000. 
  • There has recently been some doubt that there is a credit crunch to begin with.  The Minnesota Federal Reserve has published a report(PDF) that states that while we may be in a recessionary period, or “financial crisis”, it is not the huge credit crunch with nonexistent bank lending that was sold to us during the bailout debate. 
  • The money that is being infused by the government into the banking system currently is not being used to shore up credit, but rather is being used by the banks to acquire other banks, or being saved for future use (2009 and beyond). 
  • Credit is actually increasing, but more risky borrowers who would have been given credit before are now being denied credit.  This has the Bush administration unhappy, as they want banks to resume “normal lending practices” which is exactly what got us into this mess to begin with. 

Principles should never be abandoned for the immediate “panic” reaction.  The injection of government into the private sector has, yet again, produced some unintended consequences to a response to a crisis that may not even exist.  The Federal Government needs to get out of the private sector and let it work the way it should work, without social programs that allow people who cannot afford homes to buy them, and without bailout packages.  Government involvement almost always contributes to the problem.  The bailout ppackage moved us one more step away from free-market capitalism, and one step closer to Socialism.  Congress should use its oversight of the bailout ppackage to terminate it at this point, and let the market heal itself.

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The Socialist Bailout Fiasco | Axis of Right
November 25, 2008 at 11:29 pm

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