Yikes, what happened over the last few days?
A little over a week ago Senator John McCain assured us the fundamentals of our economy are strong. Yet, last night President George Bush warned us that the economy is melting down so fast that a crisis of unprecedented proportions will occur if we dont implement his radical plan immediately.
As of this writing, there is no guarantee that the administrations $700 billion bailout plan, brokered by Treasury Secretary Henry Paulsen and Federal Reverse Chairman Ben Bernanke, will prevail. Unlikely allies Barack Obama and McCain are endorsing a plan similar to Bushs, while many of the Presidents fellow Republican congressmen are fiercely opposed.
My reaction is similar to how a majority of Americans must feel; why are we even thinking about paying $700 billion to rich Wall Street executives who have tried run our country into the ground? Many of the CEOs who manage these financial firms are crooks whose purpose in life is squeezing money out of the rest of us to support their fat cat lifestyles.
To make matters worse, the guys who got us into this financial mess are the same ones hatching the brilliant plans to save us from ruin. Secretary Paulson is a 32-year veteran of Goldman Sachs and former CEO. Goldman Sachs also happens to be one of the financial institutions likely benefiting from the proposed bailout.
And where are we going to get the money? The U.S. government is already running record annual spending deficits of over $400 billion and rising since the year 2000. When individuals and small businessmen and women make bad management decisions, we lose everything and start over. We dont look for government to bail us out - there is no safety net for us. Nor should there be.
The financial experts tell us that Big Government is needed to fix this problem or the publics confidence will be shaken and some of the largest loan companies will go belly up. Maybe someone should tell the experts that our faith in the economy has been shot for some time and isnt the huge debt load carried by the average American consumer one of the causes of our current crisis?
If this bailout plan comes to fruition, dont be surprised when the financially stressed Big-Three auto companies and airlines industry soon line up for more billions in handouts from U.S. taxpayers. But if all of the bailouts fail, then what - a chicken in every pot?
Bottom line: there is no quick-fix solution to our financial problems. Our message to the panicking executives of Merrill Lynch, Lehman Brothers, A.I.G, and Bear Stearns should be the same advice for all of us, There is no free lunch, baby.