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Posts Tagged ‘bailout’

Do you ever get those moments where you have an idea, and after thinking through it, decide it wouldn’t work?  And then an hour or so later you get the same idea, but have to think through it all over again to realize it won’t work? 

 

I can’t tell you how many times I’ve had the thought, “I should just get all my money out of the bank.”  And then the thought inevitably follows, “If the bank crashes, so does the dollar.  What good will it do you to have buckets of cash?” 

 

So you might have guessed I think this is a possibility.  And that the thought has crossed my mind recently that the bank is not the safest place to guard my assets.  Recent events have not improved my confidence. 

 

Earlier this year the Congress approved an economic stimulus package, giving away hundreds of dollars to each individual who filed an Income Tax Form.  This was money they didn’t have.  It was borrowed.  But don’t worry; the government has no intention of paying the debts.  In other words, the money is imaginary.  And as long as you go with the flow, believing in the imaginary system, the system floats.  A crash is coming. 

 

Of course the government announced to everyone that it was flooding the markets with all this extra cash, encouraging people to spent.  Anyone selling something ought to have realized the impact is the same as inflation.  In fact it was inflation: infusing the markets with invented money.  All the prices go up accordingly, and except for consumer confidence, nothing is gained.  Consumer confidence, if not backed by reality, is only setting us up for a harder fall. 

 

Such is the direction of US policy.  We push concepts of money and values higher and higher, borrowing more and more as a government and as individuals. 

 

For example, the mortgage industry bail-out.  A mere few weeks ago, without asking me or even informing me ahead of time, someone in the government (I think it was an unelected entity) approved essentially a take-over of Freddie Mac and Fannie Mae.  I must say that the government’s regulations and requirements for these companies had already constituted a take-over.  To gain popularity, the Democratic Congress and Executive during the 90’s instituted policies requiring foolish loans to be made.  For example, they required welfare payments to be counted as income when qualifying for a mortgage. 

 

Now the mortgage industry is in shambles.  House prices are too high to be afforded by normal people unless they take one of these horrible loans.  The moment times get tight (like gas prices go up by supply and demand, raising the prices of any goods transported from origin to buyers), “homeowners” can’t make payments, and the lenders are stuck losing money.  Their recourse is to foreclose, which isn’t a money-producing venture.  Foreclosure is cutting one’s losses. 

 

Since this is all the result of government interference in the markets, it is hard to not expect the government to fix their mistake.  The problem is that the government can’t fix it.  If they do anything at all (except for backing off their policies demanding imprudent lending practices), they will only make matters worse – economically and politically.  Nevertheless, do something they did. 

 

And do something they are trying to again.  Some people are objecting because the $700,000,000,000 plan introduced this week gives control of the money ultimately to one man which it explicitly makes unaccountable and unreviewable to any body of people.  My objection is more fundamental.  Government, whose purse only comes from taxes and loans (which are taxes), has no business doing anything with $700 billion, let alone something in the markets.  They need to back out. 

 

I don’t even know how to begin to petition our government for a redress of grievances for how they have exceeded the Constitution in the economic sector.  The last thing I want is for them to give me money they don’t have again.  What needs to happen is almost universal reform.  Recall every congressman who exceeds his Constitutional jurisdiction by voting for government interference in or support of financial institutions. 

 

What if the government does what it ought, and stays out of this?  Doesn’t our economy desperately need imaginary money to rescue us?  Our economy will suffer a major correction, hard times, probably increased unemployment.  Ultimately we will be better off.  Our position will be less precarious.  We will be saved from a harder fall or worse political/international outcomes should we try to prop our markets yet again.  Some financial institutions may even fail, if the government bail out does not go through. 

 

Be reasonable, though.  Does anyone want irresponsible financial institutions to continue?  What about these financial maneuvers and loopholes on which entire industries are based?  I’m skeptical of the stock market, let alone the industries whose sole purpose is to lend money.  The Bible is pretty much against debt, especially the kind with interest; it’s probably for a good reason.  Eliminating these industries will make transactions in this country a lot more straightforward, accessible to every man (also giving small legitimate businesses a fair chance of competition and survival).  In this time of mismanagement and corruption, transparency is undeniably something to be desired. 

 

To God be all glory,

Lisa of Longbourn

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