As awful a notion as it is, that the U.S. taxpayer has to bail out this collosal mess made by Wall Street, Congress has no choice but to pass an Economic Recovery Bill. And do so NOW.
The estimated $700 billion price tag is nothing to sneeze at. But when the House of Representatives rejected passage of the bill before it earlier this week, it caused the Dow Jones Industrial Index to free fall 778 points wiping out over $1 trillion in equity. Sure the markets bounced back yesterday, but that was only because the Street believed Congress would try again and pass a bill (later this week).
If Congress fails again, 778 points will seem like a drop in the bucket.
Why should we care? Because by doing nothing, the limited credit available for banks to loan consumers and small businesses will dry up faster than Abel Lake Reservoir before last year’s Stafford County water-restrictions. Doing nothing will mean consumers won’t be able to get car loans or mortgages, that means that a struggling small business with a payroll of 12 people will likely have to lay off half of them or more, because the owner cannot secure a line-of-credit to cover payroll.
Will Congress passing, and Bush signing into law, the so-called Economic Recovery Act of 2008 Emergency Economic Stabilization Act of 2008 fix this disaster? Probably not. You can bet the farm that more trouble is on the way and that 2009 is going to be rough. Really rough.
But by calling this thing socialism and believing that the markets will fix themselves without intervention will mean that in the short term more of us will be out of work, more businesses will fail, and inflation will go through the roof. And, if you think $4 a gallon gas is bad…
Let’s all take a deep breath.
If this package works the way that it is intended, the American taxpayer will get back the money it invested. Eventually.
Sure, this thing Congress has before it is a Faustian bargain. But we need to tell Rob Wittman to do what is right for the economy.
Let’s hold our noses, get this thing passed, and get busy.
Our economic conditions 12 to 18 months out are going to be perilous. The choice we have to make is bad or worse.
Let us go for the lesser of two evils.
UPDATE: New York Times columnist Thomas Friedman states the case better than this writer. Read his column, here.
UPDATE II: And see RK for what our future U.S. Senator Mark Warner has to say on the matter.
Filed under: Local Economy, National Politics | Tagged: Congress, Emergency Economic Stabilization Act of 2008, Mark Warner, Rob Wittman
Dr. Seuss Explains The US Economic Crisis:
http://thebodaciousbelgradeblog.wordpress.com/2008/10/01/dr-suess-explains-the-us-economic-meltdown/
Anyone who thinks this bill is bad hasn’t looked at their 401k lately or thought about just how they get paid. If you’re working for a small or even decent size business chances are your employer operates off of some kind of revolving debt. Hence if he can’t borrow …. he can’t pay you. Do that enough and your business collapses.
It’s a bad situation but inaction is far worse …. it will result in an economic Katrina otherwise known as a deep recession ….. or DEPRESSION.
Pass the God Damn Bill and sort out the details along the way.
While you are holding your nose, I’d be interested in what you think about what Kucinich had to say about rushing into this:
http://www.truthout.org/video/kucinich-why-bailout-shouldnt-be-rushed
Bill – Interesting interview. Amy Goodman often has some good segments.
While Rep. Kucinich makes some interesting points (may vs. shall help) I still think the price of doing nothing in this matter far outweighs the price of this something.
And I think now that 80 percent of Americans have looked at their online brokerage statements and gotten woozy, the tide is starting to turn. This legislation will pass.
I hate the idea of this bill. I am not convinced it will fix the problem. 2009 on The Streets (Main and Wall) is going to be awful, regardless. But taking a laissez-faire approach to this disaster is just too risky.
My 2 cts (inflation adjusted to .08542)