Bribery or Inducement?

Economy Comments (1)

The United States Senate passed the $700 Billion bailout wanted by George Bush, Secretary Paulson, Big Business and the Financial Markets, opposed by the majority of average American Citizens. The reason, simple, ADDED PORK for the Senators who were on the fence, or opposed. Kind of says it all doesn’t it, that YES VIRGINIA YOU CAN BUY A GOVERNMENT CHEAP.

Their opposition appeared to be easing after the Senate added $110 billion in tax breaks for businesses and the middle class, plus a provision to raise, from $100,000 to $250,000, the cap on federal deposit insurance.

They were also cheering a decision Tuesday by the Securities and Exchange Commission to ease rules that force companies to devalue assets on their balance sheets to reflect the price they can get on the market (source – CBS News)

So let’s see, the solution to this mess is to add to the already unbelievable price tag of $700 Billion by an added $110 Billion? Like call me crazy but frankly I just don’t see this type of reasoning being of any help to anyone, and that includes Business & the Big Banks. Seriously, they talk about it easing credit for loans, because many Middle Class citizens are going to be feeling the crunch.

Are the average person this stupid and naive? or just Greedy?

If you can’t afford something, where is it written that someone  should loan you money to buy it? Where is it written that you need two cars, a summer house, a vacation to the Grand Canyon every six months? Does every family need two or three television sets, computers, and cel phones for every member of the family? Do we need Cable with 200 channels, because the Jones’ next door do?

I like shiny new things, and the wife and I have spent a bit lately on some toys, like a laptop for us both, a scooter for the wife so he can save gas money. We have two desktops as well, and yes, we have a video camera, two digital cameras, and the wife even has a nice color laser printer. Do we need them? Not really, but the only thing we financed was the Scooter.

We saved for our toys, and yes, things got cut to afford them, and NO we didn’t buy them all at once, though it feels like it. The point is this, we have one payment to make, for one toy, that really isn’t a toy but is practical. It will, and already has, saved us gas, to the tune of about $75 in the three weeks we have had the scooter. That savings is paying for the cost of borrowing the scooter, and buying it.

We do have an RRSP and no, we don’t earn a lot of money either. That’s the thing, if we were to go by the standards set by Government, we are at the poverty level for a family, perhaps sightly above, but not by much. Yet we have money saved for retirement, we have nice things, and our food shelves aren’t empty. We eat good quality food, maybe not Porterhouse Steaks, but then we aren’t steak type people. We have fresh Halibut, and that happens to be a bit more pricey than Rib Eye Steaks.

It is called Money Management.

Now if a fat gay fiction writer, a skinny little gay wage earner can do all that, while also looking after a 91 year old women, how in the hell can’t a major bank like CitiCorp do it, or Fannie Mae? Explain to me how these financial geniuses can’t manage to watch what they spend their money on? Explain to me how anyone can loan money to someone who can’t afford to pay it back, then claim they need help from the very people they put into the poorhouse?

To begin with, the idea that it is necessary to make granting of loans easier, is exactly what got everyone into this mess. It is the giving away of mortgages to people for houses they simply could not afford to own, at the time. They used trickery to fool them, to convince them, and now they expect the Taxpayer to bail them out. And the two candidates, McCain & Obama are lining up to agree to it? I can see McCain, but Obama? That is a disappointment.

My Grandmother used to call buying on credit as using the ‘never never plan’ and frankly that is what it is. We pay and keep on paying, until there is no more money, then they, the banks, take what we have. It is indeed the NEVER NEVER PLAN, because you never truly own what you are buying, or if you do, it is way too expensive to ever get your value for. Houses were the security blanket, but thanks to the insane credit even that has fallen by the wayside.

The solution may hurt, but to give out more credit, is like giving a kid suffering from an overdose of candy, more candy. That isn’t how you cure the upset tummy. Yet the US Senate, with some trinkets, have bought into that line, and now it is up to the House, to decide, just how cheaply can a government be bought.

The Middle Class & Poor aren’t the winners in this bailout, they will simply be the cannon fodder used to further the nests of the Corporate Elite. Instead of taking back their country, they are having it sold from under them, by the very people who were chosen to represent their interests. Supporting failed banks, supporting failed financial tactics & markets, isn’t going to help. The answer isn’t to loosen credit, but to tighten it, to make people come to their senses.

Economies need steady growth, not spurts that end up in a bust. Tax cuts are bullshit, they haven’t worked since they were first devised, and giving more credit to people who have extended themselves too far already, is just stupid.

Think of this. It would cost approximately $60 Billion to insure that every single American Citizen had full health coverage (per year). That is about what, Half of the added on tax cuts & benefits being put into this bailout? Think of it, spending half that money, and all the extra money individual people would save, along with piece of mind, makes a bit more sense, than giving banks the money.

Ian @ October 2, 2008