Originally Posted @ Voices in the Wilderness
Is there a potential for hyper inflation? I would say so.I’ve said it before and I will say it again. Companies, all companies, large and small must be allowed to fail. The government simply cannot afford to buy the debt of once rich and wealthy companies who have failed to properly assess their risk. If you are smart enough to weasel your way (as a company) into a position that sees your richest as among the most important in the world then you should be smart enough to avoid bankruptcy (even while collecting government subsidies and grants).
John McCain, George Bush and Barack Obama have all jumped on the bailout band wagon with only John McCain considering the idea that the bailouts must stop. Barack Obama for his part not only thinks that the companies on Wall Street should be bailed out but all those on Main Street need to be given free money to stay afloat. This seems to me to be nothing more of a transfer of wealth from the American tax payers to the already heavily subsidized companies on Wall Street. Has anyone of the brilliant Harvard and Yale graduates considered the possibility that these continued influxes of money will eventually lead to a devaluing of the dollar? The inflation will ensure that the American tax payer is not only robbed in terms of buying the debt of these foolish companies but what they do get to keep has much less purchasing power. Ironically enough when they try to get loans to cover for their worthless holdings they will be told by the same banks that they are now bailing out that they are “high risk” and will have no access to all the newly printed money in America.
I understand that AIG and Lehman Brothers and Bear Sterns created a lot of jobs and were vital to the American, and event the world economy but the bailouts will, in the long run, do more harm than good. The precedent that this sets is dangerously reminiscent of actions that China has taken in the past (actions that The United States themselves protested). Where do the bailouts end? Walmart, Microsoft, Citibank, HP, Ebay, Halliburton and on and on the list goes. Each one of these companies provide America with an edge up on the world and everyone one of them create thousands of jobs. I submit however that none of them should be owned by the government no matter how sharp the pain of losing them is. There is no doubt in my mind that if America continues down the road to socialism the so called Middle class Americans will be the ones hardest hit. What will stop the hyperinflation that will ensue do to massive government spending? As I said earlier, the middle class and the poor will be the last ones to access any new inflationary money (as the rich are the lowest risk for loans).
The United States congress will debate a bill that will inject more money into the American economy to bail out Wall Street and there is no doubt in my mind that liberals in the congress will use this as an opportunity to give out more “cash injections” to main street as well. As I write this Jesse Jackson in all his wisdom is recommending that the congress tackle poverty with this bill. Though that idea seems divorced from reality (considering the country is already has a cash flow problem) the truth is there are others in Congress who are suggesting similar ideas.
This goes right to the heart of the problem of the American government: They are greedy and they always want more. Does anyone truly believe that America can really afford to put 848 billion dollars into a United Nations Poverty fund of the next 10-20 years while providing free Health care, Free education and middle class jobs for every American with their social engineering?
This problem is not solved by increasing government responsibilities. American must simply get smaller. Companies must be allowed to fail and new companies must be allowed to compete. Enough with the bailouts, I hardly think American tax payers wish to continue covering the collective butts of overpaid CEOS