The alternatives to "doing nothing"
"The risk of doing nothing far outweighs the risk of the package." - President Bush promoting the $700 billion Wall Street buddy bailout.
The government officials supporting this package will lead you to believe there are no other options. "Doing nothing", according to them, is the only alternative to their "solution", which is not a solution at all when one picks it apart.
In reality, the viable alternatives are plenty. However they are not viable to this administration due to the clash of agenda's.
What about these options, for starters:
* Reform the system, rather than place further controls and restrictions on Main Street Joe.
* Return to sound money policy by allowing the market to price housing.
* Balance the budget
* Change foreign policy
* Take care of people at home as opposed to waging war on people abroad.
* Lower taxes
Oh, there are plenty of options.
The worst thing the government can do is perpetuate the bad policies that gave us these troubles in the first place. The ideology of free market capitalism has been lost in a sea of credit. Pure capitalism is healthy when spending comes from the savings of hard earned dollars, not borrowed credit. Throwing credit into the system boosts spending in the short term, but as we have seen it creates an artificial money bubble which has since burst on a catastrophic level. Supporters of this package seem to be either 1) extremely short sighted or 2) pushing a corporate government agenda. There is no option 3, because the "rescue package" is nothing more than a massive band aid to cover up fraudulent behavior on Wall Street and in the Fed.
The Chinese work hard, they save, and now they are buying up the world. Remember those days?
We borrow, and spend, and we consume; and now it's caught up to us. It's undermining the entire system but all we are doing now by pouring in $700 billion is reloading the shot gun so we can shoot ourselves with an even bigger gun in the not so distant future. When the war started, they said we needed $50 billion, which is now up to a trillion dollars. Do we actually believe $700 billion will "fix" the problems?
Wall Street is in trouble, and in order to survive they feel they must suck in Main Street. Destroying the dollar over the long run is much worse than pumping hundreds of billions of dollars into Wall Street in the short run. Buying worthless debt which was created out of thin air with more money created out of thin air is plainly not the solution coming from a sound mind.
If you are one of millions of Americans who have very little investments, and depends on the value and purchasing power of the dollar, you should be very concerned about the direction in which the Fed want to take America.
The pain being felt across the country is the result of people who lived beyond their means by borrowing against the then rising value of homes and investments; and now they have to live below their means. What the government is trying to do now is once again artificially prop up home prices. Sound economic policy and free market economics clearly dictate that the market needs to naturally adjust; home prices must come down to a level where there will be sufficient demand. Price fixing is not only illegal, but goes against every principal which the free market stands for. Allowing home prices to naturally adjust would bring about a bad year, yes; however when one looks at the alternative, it is better than a terrible decade of inflation and depression.
The entire system has been undermined, and the solution being offered to American's is more government, more regulations, more programs, more spending - more of the same, in other words. The market is giving clear indications that trying to prop up a faulty system is not a viable option.
The bubble has been severely inflated, it must be allowed to deflate, as opposed to inflating it even more. The only real solution is for the world to once again start living within their means, not beyond, allowing the market to do what it does best - regulate itself.