Monday, September 22, 2008

The Mother of all bailouts

That is what they are calling the government's move to bail out the bank industries debt. And it is a mother -- $700 BILLION in banks' mortgage debt. $700 billion...of taxpayer's money to make the payment. What bothers me is why couldn't some of this money go to the homeowners' that lost their homes due to, in part, some of the unethical practices of the same banks that the government now plans to bailout with OUR money?

On one hand, I really hate the idea that these companies are getting bailed out of a situation that they caused. Greed in the sub-prime mortgage trumped sound business practices. On the other hand, something has to happen in order to prevent a total economic meltdown. At least for the time being. There is no guarantee that this move will work. I don't really see how it could work long term. Not for the average citizen, anyway. The rich and powerful can make these huge, egregious errors and put the country in such economic disarray and the government just bails them out?

But then, maybe the government should bail them out. After all, the government is just as much to blame. They sat back and allowed much of this economic imbalance to happen. As long as the government sees plenty of their share, they were more than happy to turn the other way. All of this sounds too much like the Great Depression but potentially so much worst.

The bottom line is that the average taxpayer will be the ones who will suffer the most. There is no doubt that the government plans to replace that $700 billion by adding new taxes to an already overtaxed nation. It would probably make sense that maybe, just maybe the businesses that we are bailing out might be force to pay a bit of that debt. You would think, right? But that just makes too much sense.


Cat said...

I did a posting about this as well. And the crazy thing is, we're stuck and have to pay it or will be even worse off. I do however, think somebody's head should roll- the fat cats who profited off of making this happen should be locked the hell up! And we need to regulate the heck out of wall street from now on. No mas!

Erika 2004 said...

I heard on a podcast that part of the structuring of the bailout was to reduce the pay for executives of companies accepting bailout money if they indulge in any activity that is deemed highly risky. Seems fair to me. However, the companies or some representative for the interest of the companies want that wording taken out. Too. Much. They run their companies into the ground, get government assistance and still think they deserve an obscene amount of money.