The Socialist Bailout Fiasco

by Sal on November 12, 2008

in Economy,Politics

Conservatives such as myself warned back in September that the Bailout Bill proposed by Secretary of the Treasury Henry Paulson, passed by Congress, and signed into law by President Bush, was a socialist disaster in the making.  The bill was supposedly passed to help shore up our nations credit and unfreeze the credit markets.  Aside from the fact that the credit crisis may be a myth (although the economic downturn is not), many problems have resulted from this ill-conceived, badly executed plan.

In recent days, the news on the bailout measures has grown to show just what kind of incompetency, waste, and problems occur when the government gets involved  to try to “fix” something.

  • AIG was given an $85 billion loan to shore up its books.  This has now swelled to $150 billion.  Many financial experts are now saying that the bailout was a mistake, and that AIG would have been better served by declaring bankruptcy (a private-sector solution).
  • The Fed has accepted American Express’ petition to be listed as a bank holding company.  This will allow the credit card company to receive bailout welfare.
  • The bailout does not seem to have done much.  The Washington Post is reporting that Fannie Mae, Freddy Mac, and AIG are all struggling, even after the massive amounts of bailout cash given to them.
  • In the midst of the bailout debate, the Treasury department issued a little-noticed orders changing the tax code for banks.  I am all for tax breaks, but does Treasury really have this authority?  Isn’t Congress in charge of the purse strings?
  • Now, Democrats want to expand the bailout to nationalize the big three Auto-Makers:  Ford, Chrysler, and General Motors, potentially nationalizing this industry, as well as bail out

During the whole debate, many conservatives were rationalizing the bailout plan based on the fact that it was a necessary step, and that it needed to be done in order to “save the economy.”  They mentioned that it was not a time for ideological purity (whatever that means) and that we had no other options (even though other options were being proposed at the time).  Yet there were many sounding the warning bells from the very beginning.

It is important to remember that principles matter.  They do not change, and should be used to guide decisions in times of prosperity and times of crisis.  One’s principles should not be suspended because everyone says that there is a crisis.  Conservative principles work, and that is why it is important to keep to them.  A free market approach may have been painful in the short run, but we would have been better off in the long run.  Instead, we now face the nationalization of several industries, and the possible end to the free market system as we know it.

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Repealing the Bailout | Axis of Right
November 17, 2008 at 7:58 am

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