Stop Them Before They Spend Again!

Date Stamped 10/4/2008 – Prior to the Bailout during the Financial Crisis

Economy Troubles, viewed amateur style

I do not claim to be an economist. In fact, I acknowledge that I am especially bad with math and numbers. But, any idiot can do the math on this subject. The bailout plan is a bad idea. Many people will argue that pumping money back into our financial system is actually a good idea in the efforts to stabilize our economy. But, throughout everything I’ve read in this plan through news media outlets, that is not actually the case. The short-term goal of this taxpayer money spending spree is to avoid a larger crisis in the immediate future. To me, that sounds like they are attempting to put a band-aid over a giant gash. Basically, what that means is that they are taking this speculated enormous crisis and elongating the process in which it will take to either repair it or watch it go down in flames.

First, I am not comfortable signing over our hard-earned tax dollars to a plan that’s not guaranteed to alleviate the problem and get our country back on track toward redistributing wealth back to the frantically panicked and flailing middle-class. Economists argue that it is impossible to see the long-term outcome of this bailout plan, therefore we have to give it a fighting chance. Strange that we are in the new millennium culture proclaiming to have the greatest and brightest minds than ever before seen in history and yet they cannot accurately predict whether a risky plan will sink or swim. To me, it sounds like they are taking money that could otherwise be allocated to programs that have hard evidence of actually helping the American people and putting it onto the craps table at a local casino. The house always wins guys. Haven’t we learned that we’ve gambled enough?

So now we’re blindly pumping all of this money into a system that is messed up to begin with. Isn’t that akin to enabling an addict? These people eagerly took our money, put it out there, lost it, and now are looking for a loan shark to pay off the debts so we don’t end up crippled from the metaphoric crowbar. What’s to say that they won’t do it again, and again? It’s very similar to the Allegheny County Port Authority Public Transportation situation. How many times has the county used Allegheny County tax dollars to get them out of a bind? And they still cut bus routes, raised fares, have inadequate, shoddy service and then forged into an unnecessary billion dollar project that they couldn’t pay for, therefore putting them at high risk for bankruptcy by the end of the year. What are we getting out of this? Sure, we’re afraid that they’ll cut our public transportation altogether as the ending result, but if that’s the inevitability, then why postpone it? The same goes for our economy. If we’re heading for a disastrous crash, unlike anything this country has ever seen before, then aren’t we hurting ourselves more by only postponing it? This is speaking, of course, as if there is no way to fix it. It’s like putting our economy on life support and the day will come where it finally gives out. Or else we finally give out because there is no more money to pump into it.

I’m speaking from the prospective of the middle-class. You remember the middle-class – the people who lived comfortably and could afford all the basic necessities of life without being excessive. These are the same people who under other administrations didn’t have to choose between buying food or medicine that month. Remember what it was like to wake up every morning pretty well assured that if you didn’t mess up in your job that it would be there when you got there, and everyday thereafter? And who else remembers a time before families had to park their car for weeks at a time waiting on the next paycheck to fill their tank, taking foot or bus to wherever they needed to go? And how many of us sit inside our homes in the evenings, wondering how to get our bills paid so we don’t lose everything? And it trickles down to our middle-class children. How many young adults are now being forced into mediocre jobs after they’ve acquired $20K worth of debt for a four-year degree that is getting them absolutely nowhere? Even worse, how many bright graduating high school seniors don’t have the opportunity to attend college next year because it’s not in the budget? When we should be encouraging our youth to thrive, we are cutting them short of doing any better than we did. All of this, and more, does not paint a picture of middle-class to me. It paints a picture of a duel class, the upper class and the lower class. Most of us are quickly sliding under the line while only a scant few are grappling their way above it.

How does this occur, you may ask. It starts right at the top, like in a pack of animals. The alpha’s, (or CEO’s, government officials, and other unnecessarily high wage earners) feed from the kill first. They feed for long periods of time and take the most and best of the kill. In layman’s terms, these money-grubbing bastards will take the largest chunk of money to pay for their overly extravagant lifestyles. While they’re seeing bonuses and salary increases, only the scant amount of crumbs trickle their way down until there is nothing left. And when there is less than nothing left, they have to lay people off. In the wild, that’s called letting the weakest of the pack die. And most of the time, these are people who have already been laid off two or three other times in a five year period. Or else it’s the struggling, entry-level, recent college graduate.

Either way, we all end up suffering. Have you ever heard the saying, “The rich don’t get rich by spending their money?” They are cutting off a desperately needed cash flow to the biggest spenders in the nation – the middle-class. Hence the reason why most of these people are middle-class in the first place. In the days before the economy was so bad that we had to choose between basic necessities, we had just enough money to cover the bills and then a little to do something extra with. Then we would turn around and take that extra money to go purchase a luxury item. For some, luxury is finally getting that new living room set and for others it’s having a regular family night at a pricier restaurant. That brings it back around to the absolutely failed economic stimulus checks. How many of us used that money to pay for something we needed like paying off bills instead of putting it back into the economy as intended? It was a great idea but until we can support our usual rampant consumerism by alleviating crushing debt from the general public, then we are going to continue to circle the financial drain. And that is simple capitalism at work there, my friends.

The question is, how do we get money back into the hands of the general public who will willingly put it right back into the system? Because that is honestly the only way to boost the economy, since it is consumer based. “Proponents of buying stock in troubled banks say taxpayers would reap the gains from those shares when the banking industry gets back on its feet.” – quoted from MSNBC.com – (http://www.msnbc.msn.com/id/26994238/page/2/). This may be the only suitable solution short of having the government actually buy qualifying debts directly from the American public (which in my opinion may be a better solution). It may actually be better than attempting to rely on the trickle down theory which has proved to be ineffective as of late. It’s unacceptable to throw money at company’s debts to cover the debt they made from people’s personal debts. That’s like paying the creditor back twice. Not only have they been paid from the government to cover their lending loss, but they also collect out of your wallet. It seems like they’re double dipping, and that’s not fair.

In the instance that the government begins taking on personal debts from these floundering companies on qualifying case by case basis, then everyone wins. It would have to work carefully and specifically but the basics would be contained in the following. A person who has a qualifying debt (for instance, a home foreclosure due to a bad loan) would file with the government for economic aid. Until the person is either approved or denied based on specific outlined criteria, the foreclosure is put on hold, however the debt remains. When / if the person is approved, the government issues a check to the institution covering the cost of the loan. This releases that person from that crushing debt with outrageous interest rates as well as the institution from the debt, leaving the government with the bill. The government then reassigned the debt with a new interest rate and new rules concerning the debt back to the consumer. That way, the consumer has a chance to regain some ground and actually repay the debt instead of having everyone go under as a direct result, thereby deepening the financial crisis. With interest, the government stands to make a small profit to put into other programs which would strengthen the nation. As a direct result of an affordable debt, that person would be able to stretch their budget further and put more money into other parts of the economy (gas, medicine, retail, etc). There would have to be rules and penalties attached, of course because no one should be able to get out of this scott-free but it seems like a solid plan that has a hope of averting world-wide devastation.

But again, I am just a lowly peon with no official knowledge and experience with large money matters. But shouldn’t our money matter? And shouldn’t we stop pushing exponentially expanding debt around and trying to pass it off as real money? It just seems like we’re working with Monopoly money here. So the moral of the story, friends, family, politicians and bankers is this; if you don’t have enough real money to pay for it, then I guess you don’t need it that badly. That’s what you’ve been telling the little guy for years as you forced them into foreclosure, repossession and bankruptcy, right? All of these things have been ruining lives and now big business doesn’t want their life ruined too? Tough titties, I think.

And if you’re not one of those people who fight for a cause, then at least fight for yourself and your money. Stop them before they wildly spend again!