My first post on the bailout bill focuses mainly on how Congress is flawed. How the leaders in the Congress can buy votes to pass legislation using American taxpayer money which ultimately may lead to funding obscure "projects". This post is going to focus more on the economics of the issue. The United States of America is not a socialist or communist country, we are a capitalist free-market nation. If any other business besides the elite on wall street conducts business practices that are too risky or just plain stupid and go out of business , the government does not bail them out. Its tough luck. To survive in our country you got to beat the best and be the best in business. Its the system thats worked for us our entire history. Also, look at the precedent we are setting. I think they counted on it before and now know for sure that if they get themselves in trouble and create a panic, the government will start writing checks. Another problem that I have with this bailout is how quick they signed off on so much money. Why not give it a little time. Here is an example of an event that happened that made me think, why not give it a little more time to let things shake out and see if the market can work things out on its own. Originally Citi was going to buy the banking portion of a failing Wachovia with help from the American taxpayer. However, four days later Wells Fargo said they would buy all of Wachovia, assume all their debt and eliminate any need for taxpayer support. It also had the benefit of keeping Wachovia all in one piece. Who says if this bailout was never passed that deals like this could of happened on a higher level. On a side note on that deal, Citi now is threatening to sue Wells Fargo and Wachovia for entering into a deal and is trying to get the government to back them up. Hearing this really angered me. Citi, frankly its bull that you are trying to block a better deal that involves no taxpayer aid and a deal that allows all of Wachovia to remain undivided. How about you put the corporate greed aside and put country first and realize you got outbid by a better deal overall and especially by the fact that your competitor doesn't require government intervention. Anyways, in conclusion the bailout bill has several key problems:
1) In our capitalist system the government needs to stay out of private matters.
2) We added almost a trillion dollars of debt. It will be my generation and generations that follow me that will somehow have to find a way to pay for it.
3) It happened too quick. We needed to wait a little longer and let things shake out.
4) It is setting a terrible precedent for the future.
5) Our Congress perverted the opportunity and added gross pork to a bill that needed to focus exclusively on recovering the economy.
6) If a bailout has to happen, they should of started first with a lesser amount and see if it even works. As of now the government has a blank check of almost a trillion dollars with no guarantee that it will work.
There are other problems with the bailout bill but these are a few that I have noticed and wanted to talk about now. As always, please comment. Let me know what you think. I enjoy praise and criticism. Thanks for reading.
