White House, Fed: We Are Out of Time

Why do I get the feeling I'm listening to a really, really bad used car salesman using high-pressure sales and scare tactics to push what is sure to be a junker on me when I hear Bush and Paulson tout their plan?

Does the economy need help? Yes. Do we need a plan? Yes. Do we need THIS plan? No. Do we need to act this week? No.

Throwing money at the banks will NOT help either them or us in the long run. The US government is already 10 trillion dollars in debt and that debt lowers the value of the dollar. A lower dollar value means higher prices for cat food and kitty litter for everyone. Adding to the government debt will leave a far more lasting negative effect on the US economy than even letting these banks fail and doing nothing.

But some things CAN be done - accounting and banking regulations and reform to free up capital and thus credit. Resetting interest rates (as in the story, regulating those rates or adjusting lending practices to moderate those rates). Another way to stimulate the economy is do a quasi-take over of the investment industry, using Mae and Mac as the front for government guaranteed business loans and investments with an eye for good future growth potential - hopefully without any political agendas or strings.

But the overall goal should be to keep things from freezing up, not necessarily thawing what's already frozen. The banking industry has to be regulated (in some cases heavily) as well as the credit lending industry. Provide a regulatory climate that helps business grow and develop. These are things the government can and should do now. They will let a trickle of capital flow, keeping the lifelines open, but won't guarantee any single bank their continued existence.

We are not beholden to any single or even group of banks. They can fail and the US economy will recover. The government can do a lot to make their failure less painful for Ma and Pa America than throw money at the problem hoping Ma and Pa's great, great, great grandchildren will pay for it. It seems to me that, like a shot, it's a better thing to suffer a lot of financial pain now than endure generations of fiscal discomfort.

Fatesrider of CA 3:47PM October 01, 2008

What would happen to the price of milk if every American adult were a 1/4-millionaire?

Hippy of VA 2:52PM October 01, 2008

I saw on you tube that if they gave it to every american over 18 the money each person would get about 297,000 each after tax and would only cost the goverment 58 billion..thats better then the lousey 1200 bucks they gave married couples who made less than 30,000...I bet 297,000 to every american would boost the economy..why didnt they do that for the stimulous package..I heard that they wouldnt , because that would cause a overflow of earliy retierment....but that would open a door for a young person who cant get a job

leahville@aol.com of PA 2:22PM October 01, 2008