The article linked below from Market Watch is the perfect example of the problems with our government. Stuff just can’t get done…
The reaction to the news of our government buying up billions of bad debt from all the banks was mixed. If you own stock in these banks (like I do) you were likely very pleased. The stock price of my company is way up from the last time I bought shares. But as a citizen this was terrible news. Our government, already the biggest debt junky on the planet, is going to take on more. To do this they must buy the bad loans from the banks. How will they get the cash to buy the loans? More loans of course! If the credit markets failed because of too much debt, how much more can the government take on?
The good news is nothing can be done until Congress says so. The consensus on Capitol Hill on both sides of the aisle is that this will pass. But it won’t be no one page bill. No way dude. Congress will add little things like “the creation of a federal loan oversight board” whose only job will be to take bribes from finance lobbyists. That may be on the extreme side, but Congress won’t let anything pass without doing themselves a few favors.
The new rumbling in the Capitol Building’s bathroom stalls is a new stimulus package will be added to the bill. Remember how great that first $600 was? I’m sure this $600 or whatever it is will be just as dandy. This is the kind of crap that makes legislation take to so long. Here’s my scenario of the weeks to come:
Instead of focusing on getting this loan buyout through, the Pelosi’s of the world will turn it into a battle of new stimulus payments. Bush will say Pelosi is delaying the bill to add little bits and pieces that have become known as ‘pork barrels‘. Pelosi will say Bush and the Treasury Secretary, Henry Paulson, are bailing out the greedy, rich investors that got us in this mess. Neither will be full truth. The Treasury is bailing out the public indirectly by buying their bad loans, Pelosi wants to take a more direct approach. In this case I would side with “The Decider” because Pelosi’s argument would treat symptoms, while Bush’s treats the problem. If Bush is surgically removing a cancerous tumor with these loans, then a stimulant will be sipping green tea for the antioxidants.
Regardless of the inevitable partisan quibbles, some form of legislation will get passed. This is unfortunate, because I don’t think the government should be doing anything. It’s not just about the hedge fund managers that didn’t understand risk, this is about you and me buying too much crap on credit. The government is mommy and daddy and they’ll make it all better. But you forget mommy and daddy can’t control their spending either.
Treat the tumor with chemo, and we’re much less likely to allow it to get so big next time. If we’re supposed to let it kill us, then let it.
Back to my topic with Congress. One Republican suggested raising taxes on the rich (WHAT?!?). Some Republican. It’s justified as a way to help punish those that most benefit from bailouts, the rich, and at the same time pay for the increased expenses of buying loans. Even he knows it won’t be enough and tied the whole thing together for me:
“As a Republican I’m not a taxer, but when we add a trillion dollars to the deficit, sooner or later there will have to be a reckoning.”
So now I hate both parties in Congress. Republicans want to increase taxes and increase government oversight while Democrats do what they’ve done for the past two years, nothing. This is why I’ve announced my candidacy for Senate in the next election. Vote for The Weakonomist representing the Citizen’s Party from the great state of Dismay (borders Uncertainty and Shock on the Enlightenment River).
 By The Weakonomist |
The Weakonomist is the founder of Weakonomics. Clicking the picture of the puppy will tell you more about him. If you like what you're reading consider subscribing to the blog, following him on Twitter, and checking out the related posts below. Please consider a donation if you really enjoy Weakonomics. Also keep in mind that nothing I say can be construed as financial advice. |
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