Thoughts on the Bailout
There has been much discussion of the bailout with most people being against it. Whether or not the bill was passed the economy will slow and recede. Either way, we are headed toward a rough economy in the future. However, passing the bill is (was) akin to giving a heroin addict methodone. It was not a stopgap measure, it is something to only soften the blow.
If our credit market grinds to a halt, there will be no money loaned to start businesses or buy cars and houses. Already I hear of rumors (and that is all they are as far I’ve seen) that unless you have a credit score of 700, you cannot get a loan for a car.
But that is the tip of the iceberg. If the credit market continues to tighten up and the economy continues to slow, our national debt (debt held by our countried because they perceive it have value in the long run) will be “cashed in” by other countries because it will be perceived not to have value. Whether or not it really does have value doesn’t matter (I believe it does, for what its worth) — it is all in the perception. The bailout was designed to enforce the perception that our economy is fundamentally sound to the world. Again, I believe it is. And again, it is all in perception.
If the international market comes calling for the debt to be repaid, that is when mayhem and gnashing of teeth ensues. The bailout was meant to stop this part of the economy going bad. Our economy will go into more of a recession either way.
So, to recap — with or without a “bailout” or “stabilization” as some have more aptly called it, we will still have a recession. Without a bailout, though, there is a much higher chance of things getting much worse when the international markets (those who hold our debt) come calling.
They didn’t.
In case you missed it, McCain said at the debates he hoped he would be able to and when pressed said, “Sure.” Obama said, “We haven’t seen the language yet.” Neither of them voted.
Some said McCain was going back to Washington to “do his job.” McCain hasn’t voted since March 14 and Obama since July 9. Did I mention that neither of them voted on the bailout vote bill?
Way to lead, guys.
What Can Government Do For You?
I don’t usually get political, but seeing as the presidential elections are soon nigh, I figured why not. A little about me. I’m currently registered as a democrat, but the libertarians seem to find my sympathy lately. I’m probably socially liberal, but fiscally conservative. Perhaps those are contradictory, but it is what it is. Just some random thoughts:
Elections
Between bailouts and escalating excitement in the elections, it’s been a pretty wild week. I’m honestly not too excited about either of the two main candidates, but until we have an opposition party or a third party picks up steam its what we have to work with.
I watched some of the Republican/Democratic National Conventions. There seemed to be a lot of meaningless rhetoric on each side…things that were supposed to sound good (which did to the audience), but I couldn’t understand what they meant. “Drill, baby, drill!” was chanted at the RNC. Seriously? I can’t think of any funny chants at the DNC, but I’m sure they were there, too.
They both want to reduce taxes on certain portions of people and reduce/enlarge different parts of the government. Seems either way we pay more to have more government. Yay!!
Bailouts
Along with probably most people in the country, I don’t feel smart enough to know what’s going on economically or how a bailout can help or not help us. At first I was opposed (as a fiscal conservative), but if it means keeping the economy from a complete collapse, well, then, ya, I’m for it. But how do you or I know whether or not we are on the verge of a collapse?
However, when they say $700 billion, its not the same as saying I have $700 billion lying here on my desk, lets go spend it. It comes in a form similiar to a loan, which can hopefully be repaid when the economy recovers. I believe the large amount is just meant to encourage confidence in our economy internationally, as much of our debt is held by other countries because they perceive it to be of value. I believe it has value, and it probably does, but perception doesn’t always mirror reality.
Biden and Roosevelt
I guess Joe Biden said something off the cuff in an interview about “when the stock market crashed, Roosevelt got on television…” Ya, I can see why that’s bad. Herbert Hoover was president in 1929 and TV didn’t really get going until the late 30s. It would probably have been better had he said “after the stock market crash, Roosevelt got on the radio…” I tried for 15 minutes to try and find the context of this statement and what Biden was saying, but could only repeatedly find this sound bite. Who needs context when we can feel superior by making fun of someone who in reality is probably smarter than you or me. He might’ve actually had something interesting to say, but because of his gaffe, I’ll never know. But as he didn’t say what I think he intended to say, I’ll have to leave Biden to fend for himself. Fortunately, none of the other candidates have to worry about having ever made misstatements…
Other Thoughts
I do hope we have a presidential debate tomorrow night. I’ve actually been looking forward to watching that for a while. Seems silly not to, and maybe almost rude to those who go through all the trouble of preparing for and financing the debates.
Man, I wish we could get a smaller government. I really need to change my party affiliation to libertarian. I’m just sayin’.
