Tuesday, September 28, 2010

Good News: 90% of the Bail-Out Recouped – Bad News: So-called Deficit-Hawks Want To Run It Up $4 Trillion with Tax Cuts

A columnist wrote in the current Newsweek that the best evidence TARP has worked is that 60% of the people in the country think it was a bad idea.

Yup, we’re obviously feeling “10 feet tall and bullet-proof again.”  How quickly we forget the dramatic economic crisis that focused the minds of politicians from all different persuasions into action.ru882085350

Newsweek’s Fareed Zakaria also writes that this will be the cheapest financial bail-outs in history with 90% or more of the funds recovered.  He makes the point that bank bail-outs have always been unpopular.  However, we had to save the banks to save the economy.

We nearly all get hung up on moralistic solutions or as I term it the “fairness standoff.”  Everyone hates having to pay the bills for other people’s stupidity, especially when they are perceived as rich and/or trying to scam the system.

We’re all frustrated that we were put in this pickle.  Fortunately,  the crisis focused even politicians  (from nearly every persuasion) on a strong course of action or we might be sitting here less peeved but a whole lot more broke.

Very telling to me are two things.  First, it appears Tea Party activists, particularly political candidates, suggests an alternative to what had to be done to save the economy.  It is like they disassociate the economy from their jobs just as we’ve all been taught by Conservatives to disconnect paying taxes from the services we receive.

Apparently these people would miss a flight over a $15 fee for checking their bag, even if they get 90% of it back at the end of the flight.  Guess that would show the airlines who’s boss.

Second, now those same Conservative voices, primarily Republican, who decry the deficit (ahem!, I assume they equally decry both the larger one they created and the smaller one created to save the economy) want to increase it by $4 trillion to continue to extend all of the temporary tax cuts to the rich.

And from what I read, the economy began to tank after those tax cuts were created rather than strengthen.  Unfortunately, bullied by polls reflecting our renewed cockiness, the Democrats want to extend enough to create $3 trillion in deficit.

As another Newsweek columnist notes, remember the good old days when we were angry about deficits.

Are these people crazy?  Extending the tax cuts creates a bigger deficit than the stimulus and bailout and healthcare insurance reform (oh, I forgot, that last one actually decreases the deficit.)

I’m beginning to see that for many people all of this crap about “being so angry” is just about regaining power.

1 comment:

Anonymous said...

If I owned a bank that was in the red and the government gave me an interest free loan to pay off my debt. Then the FED loaned me money at .3% and I took that money and bought municipal & corporate bonds that paid 3.5% to 5.85% interest (and during that time I didn't loan money to business or individuals) I too would be able to pay back the government. Of course the downside would be a stalled economy because of the lack of capital but that's the little guys problem.