A Different Kind of Bailout

As I write this, Congressional leaders are meeting with the White House to hammer out details of a massive bailout of troubled financial firms and banks. The public has been presented with the following extortion scenario: pay us $700 billion or life will return to the dark ages. I've been doing a lot of reading and there seems to be a general consensus among academic experts and political analysts:

  1. The final bill will be much more than $700 billion. When was the last time that a government program came in under budget projections? I didn't think so.
  2. We will have to borrow the money to fund the bailout. The next generation of Americans will be saddled with staggering debt.
  3. It might not work. Nobody can predict whether the plan will work. One scenario could be that when the companies' books are examined, so many accounting irregularities will come to light that they will fail anyways.
  4. This is a massive transfer of wealth from the general public to a relatively few wealthy people. Seven hundred billion dollars translates to about $2,400 from each man, woman, and child in the country.

But the real impact will be the next president's inability to fund necessary programs and investment in initiatives to deal with growing number and severity of domestic problems. This additional debt will saddle him with a failing dollar, little worldwide respect, and no money left in the piggy bank to buy the necessities.

For the sake of argument, let me propose this: What if we simply let the private financial companies sink or swim as they may - the same way your local coffee shop or pet store does. Assuming we will be taking on massive debt in one way or another to "save" the country from meltdown, what if instead of bailing out the titans of Wall Street for $700 billion, we invest $600 billion in restoring urban infrastructure, small business loans, shoring up social security, world-class public school facilities and teachers, green energy incentives, and public transportation?

Invest in Main Street and save $100 billion while we're doing it. Six hundred billion doesn't go as far as it used to, but it will accomplish a lot more if it is invested in people than if it is invested in worthless paper debt.

Instead, the Bush administration is now saying the hell with the free market, let's try some socialism for the wealthy.

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