Federal Bailout: Yea or Nay?

There are so many sides to the federal bailout of Wall Street, so many pros and cons. There are many who say we need this bailout to save main street, and Wall Street. In other words, the economy will totally collapse if there is no bailout of these lending institutions. Bush warns of 'painful and lasting' damage...

Yet, there are those that say the American tax payer should not be responsible for bailing out those responsible for getting us here in the first place; namely poor subprime lending practices and huge, irresponsible government entities like Fannie Mae and Freddie Mac. This article argues just that, and says that an overhaul of current government and private practice is the only way to go: Harvard economist: Bankruptcy is right answer...

And still others argue that the government is overstepping it’s bounds, and leading us down the sure path to socialism, and full government control, in the biggest money grab in recorded history: PAPER: 'Bailout marks Karl Marx's comeback'...

Who are we to believe? I honestly don’t know, I have very mixed feelings. On the one hand, the stock market dropped by over 700 points on the news that congress did not pass the bailout bill. Yet, today the stock market gained over half of that back, climbing 485 points.

On one hand, it is well known that liquid capital helps boost lending, and in turn the economy. But on the other hand, if we give $750 billion to Wall Street, that money is overseen by the same government that got us in this mess in the first place. That money is then dispersed to the lending institutions that created their own problems with their bad lending practices, and book cooking.

On one hand, saving institutions from bankruptcy seems necessary to avoid economic failure. But on the other hand what about the taxpayer and all the homes threatened with foreclosure? Who bails them out? And what if the bailout fails? Not only would the economy potentially crash, but what would happen to our country after it loses $750 billion? I can only imagine how that would compound the problem.

I don’t think the government should get bigger, and spend more. I don’t think they are capable of spending any amount of money wisely, yet I don’t see many alternatives. Perhaps we should let these companies go bankrupt, and turn over their ownership to their creditors. It would cause credit and economic problems, but the market would correct itself in the end. The question is, would this natural economic downturn and subsequent recovery take too great a toll on the average American, and our country as a whole?


Economists Against Bailout.

Economists say bailout necessary, but every option has drawbacks.


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