LC’s Commentary

Listen To The Voice of Reason

Where do we go from here

 

 

The debate continues over which businesses deserves bailouts utilizing federal tax dollars.  On the surface, it appears most of the approved bailout money is dedicated to the financial industry.  I listen with great interest to the debate over whether the American automotive industry should get an infusion of tax dollars. Thus far, automobile industry executives have not made a convincing argument before congress that garners widespread support for a bailout. The automotive industry is asking for an initial infusion of 25 billion dollars to forestall what amounts to a collapse of the industry in the United States. Will they need more bailout cash in the future-probably? However, 25 billion out of the 700 billion seems small potatoes in the whole scheme of things.  It is difficult, if not impossible to ascertain what the total negative impact of closing American automotive assembly plants will be. Declaring bankruptcy and restructuring the whole industry is not out of the question.  Automotive industry executives testified before congress and threw out some massive direct layoff numbers, along with layoffs and business losses that support assembly plants. Were automobile executives numbers skewered to present a worst-case scenario?   It is reasonable to assume they were.  Union officials are starting to talk about the issue. They are probably more concerned about the survival of the industry than the average citizen. Without a doubt, they are looking for ways to insure the survival of the US automotive industry and jobs for the workers they represent.  

What would be wrong with setting aside 10 percent of the 700 billion dollars already committed to propping up US industries who are having financial problems? What is wrong with allocating a certain amount of the money towards putting people back to work? All I hear is make the money available so people can borrow it. Is it prudent to emphasize borrowing money while ignoring the very thing that allows people to repay loans-jobs?   Without a doubt, our lending institutions need to be stabilized. However, if the job market is not given adequate and prompt attention, the US economy will continue to spiral out of control into a recession and a depression is not out of the question.

The 700 billion dollars must be allocated where it has the best and most lasting positive impact on a majority of Americans. Putting the bulk of it into financial institutes is questionable. Why? They are the very ones that created the problem. Can they be trusted to do the right thing with the 700 billion tossed into their coffers?

How often do you hear the argument that Americans do not save enough? They buy too many things on credit. Many US citizens have now lost both borrowing and repaying power. A few financial sages got their heads together and decided it was in the best interest of the banking industry to make it easier to borrow and go into debt.  To make this possible, the very people who bankers want to continue to borrow and go in debt are the very people the banking industry are borrowing the money from-taxpayers!    When will some of the sages of finances begin to speak of less risky ways to make and save money? When will they inform people of ways to save money besides risking it in the volatile and topsy-turvy stock market?   

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December 2, 2008 - Posted by | borrowing money, Failed economic poicy, Taxpayer bailouts, wealth redistribution

1 Comment »

  1. There is a NYT article on the US debt today (see http://euandus3.wordpress.com/2009/11/23/12-trillion-in-debt-living-beyond-our-means/). It hasn’t been just after the financial crisis of 2008 that the US Government has had unbalanced annual budgets… And consider consumer “use” of credit cards? Is there something about our society–about ourselves–that we are missing because we are in it? (e.g. a fish doesn’t “see” its water). I don’t think we are digging deep enough.

    Comment by euandus2 | November 23, 2009 | Reply


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