Tuesday, September 23, 2008

At least one reason why this bailout is stupid

There appear to be a great number of reasons, but at least one that seems to be barely talked about is the following.

The $700 billion that Bush and Friends want to spend to bail out their Wall Street Buddies is $700 billion we don't have. That means we either borrow this money (bad) or print it (worse). Either way, the bailout further devalues the dollar and, since oil is traded on the dollar, artificially inflate the price of oil (more dollars to buy the same thing). In fact, just the possibility of the bailout had this very effect just the other day.

I'm no economist, but it looks like a $700 billion bailout is not only the government asking every tax paying American to lend a helping hand (and like $1000 each) to pay for Wall Street's blunders in taxes alone, but also a double tax on every single American once higher prices at the pump are factored in. I repeat Markos' question: Just why are we rushing in to "fix" this?

Update: From the always reliable and utterly badass Robert Reich. A point that I've been making in my mind only and that seems to be a huge fly in the ointment: Mortgage defaults are still growing and that means that bad debts are growing too.



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