Borrow, Spend, and Rescue
The senate has passed the bailout bill, and the house is expected it soon. I greet this event with seriously mixed emotions.
I do believe that responsible legislators, should there be any, needed to support quick action, and because the action was quick, and because it was in response to a crisis, it is likely to be much less than perfect. Also, by the time you make all the compromises necessary to pass a bill quickly, the result is going to be substantially less than ideal.
But while it is necessary at this point, this bill also reflects much of the financial mismanagement of which our government is guilty. I do blame both parties on this, though in different ways. (In my oft-repeated phrase, that’s another post.)
The compromise results in borrowing more money, handing out more authority to executive agencies without adequate supervision, and in other measures that will serve to increase the deficit and our growing national debt. It seems that whatever good intentions the legislators start with, every bill ends up with us spending more and going deeper into debt.
As a stop-gap, perhaps $700 billion, along with an extra $100 billion or so in tax cuts will help temporarily. But we cannot go on forever behaving in this fashion. Sometime things have to be paid for. Democrats want the government to do more, and at least they admit it. Republicans talk about smaller government but continually expand it, and also tend strongly to increase executive power.
So while I believe this was necessary as a short term solution, I believe that we, as a nation, should feel like the consumer who has just charged his power bill by maxing out his last credit card–it can’t go on. Something has to give.
I partially agree with you when you say that this might be a solution in the short term… And I say ‘partially’ because we still are in the process of observing which are the results of this measure.
However, although I also agree with your opinion that it is a situation that can not go on for a long time, I think that my perspectives on the situation might be a bit ‘darker’.
I can not stop seeing the bail-out as a simple patch badly sewn over the ugly hole made in the cloth of the financial system. It’s an excuse for the people working in that fiel to continue behaving in a similar way. Nothing really changes, except for a larger debt for the country.
Anyway, even if this works out it will probably crash again in a few years and that time the consequences might be even worse. The system is too unstable and it requires a finely tuned balance to maintain itself into the ‘nice results’ area.
This measure is only a soft push towards the center again. But unfortunately it could come back to one of the extremes with little help.