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Macro Economic Trends and Risks
A Contrarian Opinion on the Bailout

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By graybell
September 22, 2008

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We're all agreed that the fed bailout is no magic bullet, and no one ever said it was. The immediate problem is a crisis of confidence that becomes a self-fulfilling prophecy, and a group of powerful and rich investors who want to profit from the destruction of our financial system.

The bailout is our best solution to the above problems. Yes, it will take a long time to work our way out of this mess, but time is exactly what we need, to avoid a panic.

Civilization is NOT coming to an end folks!!! America has faced worse crises before, and we'll deal with this one too. Think about all the incredible resources that America enjoys, the envy of all other countries in the world: a still vibrant and healthy tradition of democracy, wonderful modern adaptable hardworking people, great natural resources, vast land, invention and free trade, incredible freedom and opportunity by any historical standard. Most of the people I know are going on with their lives exactly as they were before. A lot of people's portfolios are being destroyed, but life goes on. A lot of people are losing their jobs and homes (and I don't want to minimize the cost already), but most of us are not. There are still jobs available and affordable food, housing, and energy. True, we aren't as rich as we were a year ago, but most of that was gravy anyways, compared to the living standards of most of the rest of the world.

I read so many people on the web going on and on about capitalism and the free market, and how we've become socialists, yada, yada, yada. That's just ideology folks. America has never had pure capitalism anyways. A completely free market is just the freedom of the powerful to exploit the weak. We've always had government intervention in markets, and the bigger America gets, the more regulation is required. The government is taking over a trillion dollars worth of suspect mortgage loans (which are still backed by homes and land which are far from worthless). But that's not like Chavez nationalizing the energy business.

The sticking point is that a lot of people feel that they are being punished (taxed) for the bad decisions of others. I agree that we should let the guilty suffer, but the issue now is not whether a few CEOs keep their BMWs, but whether the whole financial system goes down the tubes. That would hurt the blameless more than anything we've seen so far.

If many of the posters here are right, then it doesn't make any difference what the government does or doesn't do. We're all going to be living in hobo camps in a year or two anyways. So why all the outrage?

The real problem here is paying all the interest on the money we're borrowing to fix this mess. And that's a very serious problem, I agree. But it's not the end of the American way of life!