09 January 2009

Radio, Radio Contact

Time.com has published a report card for the financial bailout. It's a very interesting piece and I encourage you to check it out. A few of the lower grades were simply because the term "Bailout" didn't apply. Rather, in the case of Fannie and Freddie, it was actually a takeover. A buyout. Whatever. The US government assumed ownership of a company that was already neck deep in trillions of dollars of losses. This is a much larger risk than simply providing financial assistance to an organization.

The report card also gives Hank Paulson's $700 billion bailout a nasty C grading. All that money and houses keep foreclosing, jobs keep being made redundant and over all, it's made Paulson look like more of an idiot that before (that's right, he's always been an idiot). But he doesn't have to ask for a vote and the voice of the nation - even the voice of congress - doesn't matter to him.

The best grade given was the single A. It was given for the decision to provide larger financial insurance with banks and the FDIC. This one is going to really work out for the millionaires who happen to have excesses of over a quarter of million across a number of different account. Diversify, much?

Anyway, all this came to my attention while reading this article about Obama's proposed stimulus plan. He's meeting a lot of public and political resistance on this. More than he thought he would, I assume. But if the federal deficit is $1.2 trillion, what will an extra $750 billion hurt, right?

This was the best point of the article: The biggest split is over whether stimulus should take the form of tax cuts or government spending. The main argument for spending over taxes is that, at a time when American consumers have turned suddenly frugal, they're more likely to save any extra cash they get than spend it. This may be the right thing for most people to do, but it won't stimulate the economy. Meanwhile, if consumers do spend the money on TVs and cars and such, much of the impact will leak out overseas to pay for imports.

And that's exactly right. It's destined to fail. It's more about the campaign promises Obama made rather that doing what's actually right or logical, for that matter. It's not a small business where you have to spend money to make money. It's the nation teetering on literal bankruptcy and being in frightening debt with lovely folks such as China.

I reiterate...Maybe that *real* Change will come soon. Lord I hope so. Because the way things are looking now is simply unsettling.


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