If this wasn’t already obvious from the reports of congressmen ignoring 95 per cent negative feedback or the fact that $100 billion in pork was required for it to pass the House or that funds are going to politically-connected organizations, then it should be dead obvious now that Treasury Secretary Paulson has unilaterally decided to change the purpose of the program from buying up bad mortgages to purchasing bad consumer loans, such as auto, credit card and student loans.
Paulson: Bailout is not a Panacea. ROFL.
Now that everyone is lining up for a bailout, including car companies, “homeowners” and even city governments, Paulson says the bailout is not a panacea. This is just too funny. What he really wants to say is “Hands off my pals’ cash!” Mr Paulson is a banker, after all.
If Bailouts Work, Why not Bail Out Everyone?
If bailouts work for the financial industry, why won’t they work for other industries? Why won’t they work for local and state governments? Why aren’t we just handing out checks to everyone? Oops, we already did that. It was called a stimulus check.
Bailouts Don’t Work. In Fact, they Hurt.
But they don’t work. They just delay the inevitable shakeout, rendering it more painful. A bailout is cash given by the government to a failed organization. How are bailouts paid for? By taking on new debt. We already owe $10 trillion on the national debt. There is no balanced budget in sight and entitlement shortfalls are in the $50 trillion range. Any new money has to come from inflation, meaning that each bailout dollar decreases the value of the money in our wallets, paychecks and bank accounts proportionately. No thank you!
Bankruptcy is the Solution
We need to let these failed organizations fail. Here is a concise (two-minute) explanation of how bankruptcy might do GM some good from the Heritage Foundation.