Cartoon Source: Because I Said So
I am no economist, but I failed to see the logic in this $700 bailout plan. Large financial institutions got greedy, made intolerably risky loans, and lost their money. Now, why should tax payers bear the brunt of their mistakes, while the CEOs walked away with obscene amounts of cash?
I would say, distribute that $700 billion to bottom 80% of the US households. That would give each family about $7,900. Those who are about to lose their (average) homes, will have about 5 months worth of mortgage payment in their pockets. While making house payments during these five months, a good number of people might figure out a way to keep their homes. Those who are not in dire straights, would spend that money, thus distributing the wealth.
It sounds silly to give $700 billion to same people who proved that they don't know how to (ethically) run a business. The government thinks that the people are irresponsible with cash - it is true to a large extent. But, one would rather spend the money unwisely on himself/herself (or charity), than fund billionaires' greed (and possibly end up not getting anything out of it, anyway).
3 comments:
Dear Satya,
I think this bail out plan is similar to repairing a pump that had leaked in its foot valve. We repair the valve and pour a bucket of priming water to draw thousands or millions of buckets of water. This $700 bailout is similar to priming a pump.
Dear Ravi,
Thanks for your comment. To an untrained eye (like mine), it appears that fixing the pump will do little good, when the aquifer is dry.
The way I see it, if we give $$ to Wall Street, they take their cut before the money trickles down to the grass roots. How about investing in the grass roots and reverse the flow? Right now, people can't invest the money they don't have.
I understand the need for fixing the foot valve (i.e., rescuing "some" large institutions). But is it OK to give carte blanche (public money)to pretty much everyone on the Wall Street who showed bad judgment?
Thanks for the cartoon credit; but it was not my design. In all honsety I have forgotten where I saw it. Good Post!
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