Our failing economy
Yesterday the House of Representatives voted to kill a proposed $700 billion bailout of our financial industry and, while I'm not happy to foot the bill of mistakes of Wall-Streeters, my mouth literally flopped open and hung there for a while when I first read the news.
I'm a Democrat, which should mean that I love it when the government steps in and gobbles up companies, increases taxes, and spends all of the taxpayer's money on things that we don't need or shouldn't be responsible for. I do absolutely agree that I want the government to intervene in my life as little as possible, but when the nation is on the brink of an even more enormous economic crisis, I think it's time for them to step in.
The financial crisis is something that's affecting the American people in a huge way, even though we weren't the ones that created it. Some of the issues could have been prevented if current (and now former) homeowners didn't take mortgages and buy houses that they couldn't afford. I do believe that part of this problem was itself created by the mortgage companies and banks that participated in predatory lending and convinced these people that they could afford the payments and could just refinance their houses when the interest rate when up, which it inevitably would increase to a level that was no longer affordable. That's a great idea in practice but with the collapse of the housing market, these houses that were supposed to be valued (potentially) many times more than what it was purchased for were now worth less than what the owners were paying for them. Whoops!
I really do hate to foot the bill for mistakes like this and irresponsible lending, borrowing, and the shady practices of Wall Street as a whole, but what other choice do we have? We're already seeing the results of the rejected bailout, causing banks in the US and around the world to stop lending to one another and credit here tightening even more. What happens if we don't fix this? An even tighter credit crunch.
If the government chooses to not to pass this (or another) bailout plan we're still going to be paying for these mistakes, but in a way that may be even more painful to the average American. $700 billion is a lot of money and it shakes an already ailing economy to its core. If we don't allocate this money to the bailout of banks and other lenders they'll stop extending credit to people trying to buy a home, a car, or start a small business. I think this could be potentially more devastating to our economy and the citizens than committing $700 billion to aide failing financial institutions.
Nobody likes to pay for the mistakes of others, but when the alternative is possibly an even more crippling blow being dealt to our failing economy because of the lack of lending that will surely follow do we really have a choice?
I'm a Democrat, which should mean that I love it when the government steps in and gobbles up companies, increases taxes, and spends all of the taxpayer's money on things that we don't need or shouldn't be responsible for. I do absolutely agree that I want the government to intervene in my life as little as possible, but when the nation is on the brink of an even more enormous economic crisis, I think it's time for them to step in.
The financial crisis is something that's affecting the American people in a huge way, even though we weren't the ones that created it. Some of the issues could have been prevented if current (and now former) homeowners didn't take mortgages and buy houses that they couldn't afford. I do believe that part of this problem was itself created by the mortgage companies and banks that participated in predatory lending and convinced these people that they could afford the payments and could just refinance their houses when the interest rate when up, which it inevitably would increase to a level that was no longer affordable. That's a great idea in practice but with the collapse of the housing market, these houses that were supposed to be valued (potentially) many times more than what it was purchased for were now worth less than what the owners were paying for them. Whoops!
I really do hate to foot the bill for mistakes like this and irresponsible lending, borrowing, and the shady practices of Wall Street as a whole, but what other choice do we have? We're already seeing the results of the rejected bailout, causing banks in the US and around the world to stop lending to one another and credit here tightening even more. What happens if we don't fix this? An even tighter credit crunch.
If the government chooses to not to pass this (or another) bailout plan we're still going to be paying for these mistakes, but in a way that may be even more painful to the average American. $700 billion is a lot of money and it shakes an already ailing economy to its core. If we don't allocate this money to the bailout of banks and other lenders they'll stop extending credit to people trying to buy a home, a car, or start a small business. I think this could be potentially more devastating to our economy and the citizens than committing $700 billion to aide failing financial institutions.
Nobody likes to pay for the mistakes of others, but when the alternative is possibly an even more crippling blow being dealt to our failing economy because of the lack of lending that will surely follow do we really have a choice?
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