Categories
economics

Bailout stuff

The bailout is going to pass, but I can’t be convinced that it is a good idea. People say that we need to stimulate demand, that’s why the government needs to start spreading money around. I can kind of, sort of understand that. The trouble is that is seems obvious to most people that the reason people are not spending money is because they have too much debt. Or at least they now understand that their house is not a safe investment and need to actually save some money. Trying to make people spend money when they are in debt or when they really need to have some savings seems reckless.

There’s no question that things aren’t real good right now, but I believe that it’s important to look at why and not blindly react to a downturn as if all of them are the same. Clearly there was a bubble (and I think that was caused by easy credit and market distortions) and now we are dealing with the aftermath. We need to allow that correction to happen. heaping debt on top of the other issues isn’t going to do us any good long term even if this “stimulus” does what it purports to do. We need to stop trying to treat the symptoms and treat the actual sickness…

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