$700 Billion With A “B” Of Your Money–UPDATED
September 22, 2008 / 9:52 pm • By Dr. Melissa ClouthierAs the stock market tanks, I ponder whether Wall Street should be allowed to crash or not. And, have you noticed oil is up $25/barrel?
UPDATED:
If you oppose the bailout, does this, from Megan McArdle, change your opinion? Have you considered what it might mean for making payroll, if your money market is no longer accessible?
No doubt some of my readers are rubbing their hands and saying “Exactly what should happen to people who carry credit card balances!” And I’m sure that among you there are people who pay cash on the barrel for everything, having never taken out any loan for a house, an automobile, an education, a personal financial crisis. These people never even use an American Express Card, which is, of course, a short-term loan. They also do not work for companies that borrow money to buy capital equipment or finance expansion, and their firms do not experience any mismatch between their payables and their receivables. Those people should stop reading now, because I’m pretty sure the Amish aren’t supposed to use the internet.
The rest of us live in a world that is created and run by institutions that amass capital from millions of people and concentrate it in areas where it (usually) makes people better off. I’m particularly confused by conservatives who claim to hate fractional reserve banking, duration mismatches in the financial system, and easy credit/bankruptcy. If you think more deeply about it, there are three reasons why this opposition is silly:
Go read the whole thing. Some form of “fix” is inevitable. Conservatives need to be thinking about rational solutions. Doing nothing might not be a rational solution.
More here.
Cross-posted at Right Wing News
2 Responses to “$700 Billion With A “B” Of Your Money–UPDATED”
By Mat on Sep 23, 2008 | Reply
$700B is just the starting price tag. This thing will easily go past $1 trillion (with a T), particularly if the Democrats start tagging on all sorts of goodies (they already have started this, by the way). The worst thing about it is that how can you tell them otherwise? Can you bail out one group and not the other? Personally, I have some major issues with this bailout (i.e. opposed to it) and yes I’m aware of the economic implications. But it’s also clear that this may not work, since nothing like this has every happened before.
Part of the problem lies with our economic mindset, which is to spend way beyond our means (everyone is at fault here). Simply having the government come in and bail out every irresponsible idiot out there will just send the message that it’s ok to screw up spectacularly because it’ll be taken care of.
Either you pay the piper now, or you pay him later (we have chosen to pay him later), but you will pay him. There are no free rides in life. I don’t see why this situation should be any different.
By Chris Hutcherson on Oct 2, 2008 | Reply
How long will it be before more money is required, Is this just a short term fix ?