Diary

No Way, No How, No Bailout!

Originally Posted @ Voices in the Wilderness

The rich, the poor and the middle class made their beds and now we have to lay in it. I understand the consequences of allowing the markets to fail and not passing a bailout but it seems to me that it is necessary to go through this pain in order to ensure that it never happens again. Solomon, the wise king of Israel has said that there is a time for everything in this world, under the sun. There is a time to be happy and a time to be sad, a time to be rich and a time to be poor. A time to lead and a time to follow and he is absolutely right. If the government decides to bailout large corporations we will not overcome this principal of the world in which we live. We will only delay it.It is inevitable that a recession must come so let it come now rather than later. The time for kicking the can down the road is over. I may sound like someone who has thrown in the towel but this is not the case. I simply do not believe that throwing 700 billion dollars at the problem is going to help. It was only a few months ago that the U.S Congress passed a 150 billion dollar stimulus package and gave the money directly to the people. Where has that money gone? Did it sure up the markets? Yes of course it did, for the first week or so and then banks started collapsing. It’s remarkable to me that no one is asking the most basic question to those who would ask for more money now, “What happened to the 150 billion I gave you last month”. This bailout will not work and if our recent history has taught us anything we will be right back in this situation in a few months time only at that point America will be short 700 billion.

The House Republicans voted on mass today against this bailout and the markets reacted as would a petulant child who didn’t get this week’s allowance. The United States of America is addicted to credit and now is the time to dish out some tough love. If Congress doesn’t stand firm against this there should be no doubt that America the addict will be looking for its next fix within the next year or year and a half. Now, it may not be fair to do nothing which is why I have expressed agreement with the idea of cutting the capital gains tax to 0%. Business taxes which now stand at 35% need to be drastically cut. Canada has a 22% tax and it has been brought to my attention that Ireland cuts that in half at 11%. America should fall in line (raising the already ridiculously high tax is simply ludicrous in the type of financial environment the U.S is now in). No longer is America the country of choice to do business so I would suggest rectifying that situation. If any country could do it surely the United States of America can I also think that a real immigration policy has to be enacted. I have little doubt that that the people who are now finding themselves unable to pay their bills would be boosted by not having a supersaturated workers market (which devalues the American worker). In essence More Businesses + more foreign investment – Workers equals higher wages which of course equals more mortgages being paid. I would also like to see a moratorium on foreclosures while these policies are being enacted (The Hillary Clinton concept). It just seems right, fair and just all things considered.A 700 Billion dollar bailout is simply not an option; reform, get creative and get ready for tough times.