Bailout won’t bail us out
The economic bailout package put together by the Bush administration and Congress could help in the short term, but it could have lasting repercussions that could wind up hurting the country.
Yesterday, The Associated Press reported that a key Democrat and the Bush administration has agreed to include mortgage aid and strong congressional oversight in a $700 billion financial bailout.
Rep. Barney Frank, the Financial Services Committee chairman, says a great deal of progress has been made in talks between lawmakers and President Bush’s team on the rescue. A government official with knowledge of the talks also said the administration has agreed to create a plan to help prevent foreclosures on mortgages it acquires as part of the bailout.
You would think this bailout plan might have caused stocks to finish higher, but it didn’t yesterday. The Dow Jones Industrial Average fell more than 200 points. Ever since the announcement of the bank failures last week, the markets have been incredibly volatile rising quickly one day to fall the next.
And to add insult to injury, the U.S. Dollar fell in value again to the Euro by four cents. It takes almost a dollar and a half to make one Euro, now.
Any economic package that can be offered by the government won’t cause the recession that we are in to end anytime soon. We’re still going to have a tough few months as the markets continue to decline, but the markets will turn around eventually even if the government does nothing.
This is continuing a precedence set by the government by bailing out failing big businesses, and it dates back to the foundations of our country. If any small business fails, the government wouldn’t do anything to stop it.
Also, the money that is spent on bailing out these businesses could be better spent on helping our country pay off its already massive debt. That debt someday could come back to haunt us especially if the lenders decide to call in the loans.
These are definitely trying times, but bailing out these businesses might not be the answer.