The Bailout
There’s been much ink spilled about the Federal bailout of risky bets made by major banks and investment houses. People point to capitalism and say that its failures have led us where we are today.
Capitlism isn’t responsible for this mess. Socialism is. Socialism led the Federal Government to encourage Fannie/Freddie to accept risky mortgages with small down payments so that buyers who were otherwise unqualified for a loan could buy their first home. Socialism is bringing you this bailout of people stretched too thin to buy in the first place and their bankers. Socialism will have the Federal Government as a shareholder in public companies - just like China.
Capitalism would essentially say “Sorry things didn’t work out. Leave your keys in the candy dish by the front door.” Capitalism would let the investment bankers fail and serve as a cautionary tale for others. Capitalism, left without government interference in this matter, would find rational pricing for the distressed debt responsible for this intervention and buyers would emerge.
Capitalism would probably cause a recession, but it would be relatively short lived and the economy’s fundamentals would be stronger afterward. The lingering effects of the Socialist bailout will be more pronounced and longer lived because artificial floors will be created instead of letting things reach their natural equilibrium.
Socialism will have the government buy these bad loans for $700 billion and then have a reverse auction to sell the assets - virtually guaranteeing a loss for the taxpayer in the range of $200+ billion.Â
Socialism will pay for this folly by raising your taxes (and if you don’t understand how changes in cap gains taxes can still affect your 401k then I can’t halp you) and stifle growth. Socialism will pay for this folly by printing more money and decreasing your purchasing power.
This scheme will hurt every American: taxpayer or not, homeowner or not, forclosee or not.  The Presidential candidates are no help. Neither understands the magnitude of this situation. McCain opposes the bailout, but can’t intelligibly explain why. Obama, will vote for anything making people more dependent on the Federal Government.
You don’t get a vote on this one. Both parties are eager to do SOMETHING, ANYTHING before the November elections. Contact your congressperson and tell them to vote NO! If you kinda like the bailout, then at least encourage them to make a stink over a particular part of the bailout (how about the no court oversight thing for example?). Or that they should include a rider in the bill for pornographic NEA grants — whatever it takes to give people a little more time to think before we commit to this!