The fact that our government continues to think it can pick and choose which businesses to prop up and what business to let die is further proof that we have totally lost the concept of capitalism. The fact is that capitalism died a while ago and was sold off in favor of debt. We are a country that is addicted to spending like a heroin addict. We are finally starting to see the result and that madcap spending come home to roost and no amount of government propping up failed businesses is going to make it better.
The truth is that we have to have the depression before we can make things get better. The amount of our GNP that the US pays to service its debt has risen to an unmanageable level and the US may have to declare bankruptcy within our lifetime. But running the printing presses is just creating even more money out of thin air and eventually the dollar maybe worthless. It won’t be wheelbarrows of cash as we have electronic money, but the house of cards is coming down.
The idea that a business is so crucial to our economy that if we let it fail, the entire economy will fail is erroneous. It may cause a shortage of credit and banks may close their doors and people will be hurt, but trying to pretend the business hasn’t failed is not fixing it. We have shoveled $150 billion dollars into the fire called AIG. Throwing “good money” after bad is never a good idea.
Now the car industry comes with hat in hand. The Governor of Michigan says these three businesses are crucial to the economy and need to be propped up. People say it will just be a $25 billion dollar loan – to companies that are already drowning in debt. I had a small business and thought that if I borrowed a little more money then I would grow enough to pay it off and it would all work out. It didn’t and I paid the price. If we allow GM to go bankrupt, they could emerge out of bankruptcy stronger then ever. Of course the retirees will pay the price and many company’s retirees have after the company goes bankrupt, but GM would emerge free of debt or maybe a stronger company buys the assets. What, we will prop them up and have them build cars that no one will buy. How long can you play that game?
Our economy was based on over leveraging and now we are continuing to drink to try and avoid the hang over. Eventually you would kill yourself with alcohol poisoning. We have to suffer the pain of de-leveraging and while many of us will be hurt and we will have to rebuild, if we rebuild the right way and learn to live within our means our lives will be better in the long run, but we have to accept the short term (that could last years) pain.
All we are doing by bailing everyone out is causing more and more people to look for their payday. Hell I wouldn’t mind if the bank cut my mortgage in half and all other debts were just wiped away, but then the assets on corporation books become worthless.
The fact that most people voted back in the f**king a**holes in Congress who voted for the bailout burns me to no end, but we can still get it right and fix things going forward. No one says we have to continue with this plan, stop it and move forward. Let Ford fail and see if they come out on the other side or have their assets purchased on the cheap and Honda takes over their plants and manufactures all their cars here.
Eventually you have to pay your debts or declare bankruptcy and take the pain and move on. That is where the US and much of the world is and pretending we are not in a depression doesn’t make it so.