Bridge Loans To Nowhere
by Jayme Evans (11/24/08)
Nothing is more ridiculous than the notion being adopted by our government that anyone or anything is somehow too big to fail. There are 435 members in the House of Representatives and a Senate of 50 and yet they have failed us quite miserably and repeatedly.
Back on September 28th, 2008, I warned about the consequences of a government bailout, how this particular plan concentrated far too much power in one person’s hands and how inheriting toxic debt was a rotten idea. Last week, those warnings were substantiated. Congress held hearings, grilling King Henry (Paulson), demanding to know where the taxpayer’s money has been spent and why more isn’t being done to help individual homeowners. Paulson indicated that his plan to acquire these poison instruments was not economically viable and that he would concentrate on injection of capital into the credit markets to jump-start the economy. Having picked the pockets of taxpayers to the tune of 700 billion dollars and having already spent nearly half, Paulson doesn’t have much to show for his efforts or our money thus far. The stock market also took another devastating hit last week, plunging us into further economic uncertainty. Is it just me, or does it seem that whenever government officials open their wind tunnels, the Dow takes a dive?
What began as a poison housing market is now multi-faceted economic turmoil with deleterious effects in virtually all economic sectors. But the global credit crisis and its resultant ills were not caused by the bad housing market alone. They are also the direct result of ill-conceived, hastily-crafted legislation, slow and ineffective use of “emergency funding” and a crisis of confidence over the lack of leadership in Washington. The core problem isn’t so much that banks won’t lend money, they just won’t lend to risky borrowers. And the decline in consumer spending by those with good credit is a direct result of the fear that President Bush and Congress continue to inject into consumers.
Congress makes their living debating and passing legislative solutions. They have a constitutional duty to act with due diligence. And while it may take years to say with certainty their bailout will fail, thus far it has done absolutely nothing except accelerate the societal acceptance of government handouts. They passed a bill with so many loopholes and so few checks and balances that its ineffectiveness was never in doubt. Now they hold hearings and ask why? Why are companies receiving bailout funds using them for bonuses?
The answer is because they can. Congress specifically wrote the legislation that way. They also wrote it so that even financial institutions on solid footing could qualify for federal bailout funds.
Many of them have already.
I have a few questions:
1. Why did Congress, ever so adept at using legal minutiae to tailor their legislation to avoid most glaring loopholes, leave them all in this one?
2. If this was such a dire emergency back in September, why is Bush leaving half of the money to his successor?Our government is spinning completely out of control. They are squandering trillions of dollars and dragging the entire country and economy with them. Too many people have been living with too much debt for far too long. The only viable long-term solution to this mess is a cultural shift towards frugality, which now seems to be taking hold in the general public, but which seems eerily out of reach of our country’s narcissistic leadership who now simply reacts to the nation’s problems by thoughtlessly throwing money at them.
When you add up everything; all of the wars, entitlement programs, bailouts, bridge loans to nowhere and everything else our government has committed to funding for the next few decades, our total projected deficit will be in excess of $36 trillion dollars. The 110th Congress campaigned on the promise of fiscal discipline and what they laughingly called “pay-go”; only spending what you actually had the money for. Now, they operate on the principle of “yea-go”; eagerly spend trillions of dollars that you don’t have Our entire economic infrastructure may now disintegrate, due to the dual curses of a leadership deficit and wealth of stupidity. They have completely destroyed the very concept of personal responsibility and are now considering spending yet another 700 billion dollars they don’t have. Once again, this is not a financial crisis; it is a generational crisis of leadership now infecting both the public and private sector.
Any CEO who is so detached that they can run their corporation into the ground, then take a corporate jet at 20 grand a pop to go ask Congress for billions more than they’ve already received, yet cannot articulate how much more he needs or how it would be used or paid back, should be imprisoned for life.
Handcuffs, not handouts.
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