Wednesday, October 01, 2008

Regarding the Bailout Part 2

This is what my friend Scott has to say about the bailout on his blog:

Today, I changed my mind about the bailout. Up until today, I believed that our government needs to act to end the financial crisis. I would not have thought that our government, who I hold responsible and accountable for our economy, should just allow the market to correct itself. Government, to me, is not about doing nothing.
Yet I began to hear many voices clamoring for the government to just let it happen, and then Congress voted down the bill, and the thought I heard on the radio is that many Congressman are hearing from their constituents that we don’t want the bailout.
I don’t confess to know anything about economics, but this got me thinking about if I personally really think the bailout is a good idea or not. Truth is, I didn’t have any reasons to support the bailout. It just seemed like something we have to do. Yet another example of just absorbing ideas from the media.
And then one thought turned me around: today there is the same amount of money out there as there ever was. No one destroyed any actual money. As far as the money goes, we’re in no different of a position than we ever were.
The only thing that has changed is our level of faith in an overinflated system of borrowing. We’re getting a little dose of reality. We’re re-learning what we always knew: it isn’t wise to borrow so much with no assurance that you can pay it. And, it isn’t wise to lend so much with no assurance that the borrower can pay it.
So I say, let the market correct itself. Yes it is painful but that is what pain is for! The experience and memory of pain is part of what prevents people from repeating a bad, unwise behavior! If we let the government bail us out, I fear we won’t learn our lesson as a nation.

He is right. Let those corporations fix their own problems!

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