| sperry |
2008-09-25 10:36 AM |
Also, I just wrote our Senator:
Quote:
Dear Senator Reid,
With nationwide economic hard times on the horizon, I urge you to carefully act with regards to any Congressional bailout plan.
First, I'd like to remind you that the people pleading for Congressional help are the same people that for years have complained that Congressional regulation was stifling their industry. But now after years of risky behavior, when the margin call comes, they would like to throw away the rules of an open and unregulated economy that they fought for and ask for billions of taxpayer's money to cover their failure. It's unfair for the banking industry to reap the rewards for years while the US taxpayers take all the risk. Any bailout plan must be a loan, and not a hand-out. Any bailout plan must be an investment for the taxpayers, and not an expense.
Second, a reminder that in an open economy, bubbles and bursts are a natural part of the cycle. The reason the housing market burst is because there were too many houses built, followed by poor lending practices used to try to artificially increase the housing demand to match the over supply of homes. This action simply delayed the crash and made it a sharper and harder fall. Continuing to prop up this market with $700B in taxpayer money only perpetuates an unsustainable situation. To put it bluntly, housing prices need to crash; homes are overvalued. I would much rather take the hit quickly than to drag out the crash over the next 20 years.
Third, there is a very good chance that the folks like Bernanke and Paulson that are asking for government help may not be doing so in the best interest of America at large. Sure, a bailout will certainly help their industry, and I'm sure from their perspective that's tantamount to "all of America", after all it's all their personal friends and colleagues that are directly effected by this situation. But in the long run, for the majority of Americans, might it not be better to cut our losses and let a failed system sink? If it were up to me, the last people I'd be listening to about how to fix the problem are the people that got us into this problem. People who just weeks ago were touting how confident they were in the system. There are plenty of economists that warned of the disaster potential inherent in the US banking system. How about giving them the chance to build a new system? A system that reduces risk by capping the risk-taker's income, thus promoting more responsible behavior without directing regulating the market.
Fourth, spending $700B to soften the blow of an economic collapse does not necessarily ensure future growth for America. If hard times call for sacrifices, I have no problem with that. Spend $700B of my money, but make sure it's not just to react to a problem, make sure it's used proactively to provide the seeds for future growth. Spend $700B on job creation programs, on alternative energy research. Use that money not to buy up bad loans, but to buy houses from people that can't afford their mortgages, then rent the house back to them at a price they can afford. Let the taxpayers soften the blow on the taxpayers, not give a free pass to the industry that got us in this mess. Let the taxpayer's money create new jobs for taxpayers, not save the jobs of people that paid themselves billions in bonuses over the last decade.
On a more personal note, I'm a Software Engineer working at one of the largest employers in Reno, NV. In the 7 years I've lived and worked in Nevada, I've never really had a hard time making ends meet. I work hard, make a decent living, and haven't really had to pinch pennies since I got out of college. However, with this economic collapse, there is a good chance I will lose my job, as layoffs have already been announced. I will likely not be able to find work in Reno, as the job market will be full of my colleagues all looking for similar work. I will not be able to afford the house I purchased last February, and thus I will add to the downward spiral. I will go from being a successful middle-class American that could responsibly afford his lifestyle to someone that is "part of the problem". And to add insult to injury, I will be writing a nice big check to the government come next April to pay my taxes that will be spent to prop up the folks that own the loan I'll have to default on, rather than keeping the money in my pocket which would allow me to actually continue to pay for my house. If my money has to go towards a program to help the economy, I'd much rather pay towards a program that creates a wind-farm in Washoe Valley where I can get a job writing communication software for windmills, for example.
In summary, our economy is in for hard times and middle-class America is in for a hard ride, regardless of any banking industry bailout. Please ensure that if you're going to spend billions of taxpayer's money, it's not going to be used to prop-up and prolong a failed system, but that it's going to be spent creating future opportunities for economic success. Please say no to a long depression, and let the failed banking industry fail. Sure it will hurt, but it's akin to pulling the bandage off in one quick tug. Invest instead in the future of our economy by creating new jobs with which America can lead the world in exportable clean energy technology.
Sincerely,
Scott Perry
Reno, NV
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The thought of a long grueling depression created by trying to bailout an industry that ignored its inherent risk and now wants the taxpayers to foot the cost of their failure because "they're too big and important to fail" has got my hackles up. :unamused: |
