Saturday, September 27, 2008

Another bad idea

From Clayton Cramer, we get another bad idea regarding bail-outs. Clayton recognizes it as a bad idea but there is an interesting lesson here:
But there was an intriguing point hiding in an email I saw recently. The email suggested that instead of giving $800 billion to bail out a few Wall Street mortgage giants...why not bail out ordinary taxpayers. Doing the math correctly: $800 billion divided equally over 125 million households (which I think is about right) would be $64,000 each. I rather suspect that such a distribution would enable a tremendous number of Americans to make house payments until the economy recovers. For others, it would pay off their credit card debt and put tens of thousands into the bank.
If you're going to give money to deserving individuals, why not give it to the American people? I understand that this is a bad idea, but no worse than bailing out investment banks, who should have been smart enough to see this coming.

I don't buy into the gloom and doom of the folks who refuse to let a couple of investment banks collapse from the weight of their own bad investments. I think a bailout is a horrible idea. I especially don't like the idea of organizations like ACORN being able to enrich themselves at the expense of the American public.

As I understand it, the FDIC was set up to provide insurance for small depositors that their deposits would be safe in member institutions. That's enough government intervention for me. If the fat cats lose their asses in the market, that's part of doing business.


Anonymous said...

$800 billion divided by 125 million households is $6,400 each, not $64,000.

Pawpaw said...

You're right. $800 billion divided by 125 million is $6400 each. Still, the idea applies. If you give me $6400 I'm going to use it to pay down debt. I can't pretend to say what anyone else might do with it.

Anonymous said...

Have you seen this?