I’m surprised at the failure of the bailout – from what I heard over the weekend, it was widely expected to pass.
Frankly, I don’t know what to think about the bailout. On the one hand, privatizing profits but socializing losses is a recipe for unbridled and excessive risk-taking. One can say that Wall Street got itself in trouble, and it shouldn’t need taxpayers for a bailout. On the other hand, it’s never a black-and-white issue of Wall Street vs. Main Street, where when the former loses the latter wins. Wall Street’s problems continue to flood Main Street. Frozen credit markets affect everyone – the college student looking for a loan, the newlyweds seeking a mortgage, small business owner trying to expand, and the applicant searching for jobs.
$700 billion is a huge amount, but what would a deep and prolonged recession cost the economy? The bailout is hastily put-together, but is it TOO hasty? The difficulty is that no one really knows the answer.
I don’t know what’s going to happen, but I AM looking for some sort of action from Congress. Even though this vote on bailout failed, I think there will be another round of voting / revisions to the measure.
In the meantime, I’m contributing to the problem by pulling tighter my purse-strings.
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I, too, am against the idea of privatizing profits/socializing losses…but I think a bailout is necessary.
I don’t think many people understand that every single company relies on credit to operate (working capital). If credit dries up, then all of our jobs are going to be in jeopardy. Arrgh, people need to see beyond the $700B price tag. This is a serious problem that the government can’t afford to ignore!
-Bacon
From what I understand the problem with the bailout is that it was going primarily to Wall St. Granted that is where the crux of the problem is but since they got us into the mess many Congressmen/women were against it because it isn’t going to help their constituents. The original bailout was supposed to include renegotiating foreclosures around the country instead of simply going to the big banks so that they don’t fail. So the bill was rejected on the principle that the banks would be making their profits on those irresponsibly negotiated loans and common folk would still be losing their homes left and right.
I’ll agree that without credit the economy cannot operate *but* if we only bail out the big banks who are the ones that got us into the mess and not anyone else we are basically giving them free reign to be irresponsible.
I also don’t believe a recession is avoidable, with the low interest loans that have been spewing forth over the past 5-6 years and all of the sub-prime shenanigans a recession is imminent bail-out or no, it just depends on how severe and how long and how quickly it will hit (the bailout is really just making it a slower decline as opposed to a catastrophic drop in one fell swoop).
Good luck pulling those purse strings tighter, I am surely trying to tighten up my budget.