Thursday, September 18, 2008
Did I Just Wake Up In the Soviet Union Circa 1980?
The government is meeting tonight to come up with a comprehensive plan to buy the bad debt on the books of all these failing financial institutions. The plan would have the government set up a facility that would buy all these assets and hold them to maturity.
Seriously, what the hell is going on here? When the heck did the government become a backstop to insure that investors don't lose money? The government is taking the position that this somehow helps the average american, but I'm not buying it. Most Americans aren't going to feel this. If you have a steady job, pay your bills on time, and don't follow the market every day, you are going to be fine. You may hear rumblings about all the problems going on in the market, but how does that affect you?
Now granted, it would be harder to get a loan for things like a car, a student loan, or a new home. But those who are credit worthy, they will be able to get what they need. Those who are somewhat less than worthy might have problems, but really, is it so bad if for a short period of time people can't take on more debt? Haven't we as a country taken enough debt over the last few years anyway. How is putting ALL of our money at risk going to solve the problem?
The government should not be in the business of saving people who knew the risk they took. All investors should expect go to zero. Saving people from themselves will only encourage people to take more risk in the future.
Posted by T at 2:26 PM
Labels: economics, government
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So much for the hope of spending our tax dollars on public education. Did anyone else notice that the government is spending more on bailouts and "reinsurance" than it ever did when Katrina hit?ReplyDelete
Moving to Canada or Switzerland may not be a bad retirement plan... at the very least you won't have to wonder whether medicare and social security will run dry when you're old.ReplyDelete
How can any plan to buy bad debt lead to a happy ending... unless you're the mafia?ReplyDelete
Does sound pretty ridiculous doesn't it?ReplyDelete