Friday, October 03, 2008

What Just Happened?

Analysts: Bailout Won't Cure Economic Stress
Friday, October 3, 2008 3:30 PM

NEW YORK — Now that the government has decided it will spend $700 billion to get the economy started again, don't expect immediate results.
It's a little bit like those ads for protein drinks that show skinny milquetoasts turning into Schwarzeneggers in 60 days — you want it to be true, but you know in your heart it will take months or years of sweating in the gym to pack on that kind of muscle.
The latest readings on the U.S. economy show just how far we have to go. Home prices and auto sales are plummeting, manufacturing activity has tumbled and the consumer is feeling increasingly strapped.
The economy seems nearly dead, and things could get worse before they improve — even with Washington's help.
Much attention has been paid recently to the wrangling over the taxpayer-funded emergency rescue package. As it should. That's enough money to give every man, woman and child in the U.S. about $2,325 each.
Lawmakers say the bill is the best hope to save the financial system and revive the economy. It would allow the government to buy bad mortgages and other devalued assets held by troubled financial institutions, thereby inducing them to lend again to businesses and consumers instead of hoarding their cash.
The package, which was approved by the Senate late Wednesday and the House on Friday, would also include tax breaks for companies and the middle class.
History tells us not to expect miracles overnight. After the last big U.S. bailout — the formation of the Resolution Trust Corp. in 1989 to stop the U.S. savings and loan crisis — it took a year for the stock market to hit bottom, two years for the economy and three years for the housing market, according to Merrill Lynch.
And when Japan put a bailout plan in place in the late 1990s, its stock market took another five years to recuperate. By some measures, its economy still hasn't had a sustainable recovery, according to Merrill's chief North American economist, David Rosenberg. ........Read More

We just gave away all our hard earned money. We just took a major step toward socializing. It worked so well for the communists. Look at all the successful communist nations on the planet.

The government created this problem with bad decisions back in the late 90's. It forced banks to make questionable (Read as "mostly bad") loans to less then qualified borrowers. This was a bad plan that had bad results in its future and the future has now arrived. Choosing to make it worse with an even greater blunder is not my idea of helping.
I can't believe the number of people who are blaming this on capitalism and free enterprise. This had nothing to do with either. If someone puts a gun to your head and tells you to do something and you have no means of fighting back, you do it. There wasn't any free choice or open market activities that gave us this fiasco.

We need to send a clear message to congress that this was the wrong decision. Start by writing and calling the ones who screwed this up. The next step is to remove as many from office as possible who chose to abuse the trust we lent them. This isn't about the letter "D" or "R" this is about making choices that will make America strong.

Try this idea that we failed to use. We have some amazingly bright people in this county and they are not in Washington DC. They could have gathered up the top economists and business professors in America and created a real plan for saving America first. Once again we find our elected officials throwing money at the problem rather then using the talents of Americans to save us.

May God Protect Us From Our Own Stupidity.

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