Bailout Bill: Round 1!

The house of representatives voted on the "bailout bill" yesterday. This is the one that will give $700 billion from the government to the secretary of the treasury to buy stock and assets of the financial companies going out of business with no restrictions or regulations.

DENIED

I actually caught it on C-SPAN. I was able to see the ending half of the debate before the vote. It was shut down by a small margin of 105 to 128. The fact that it was so close makes me nervous. Those of you who wanted that bill to be passed, don't worry. People were already talking about having it appealed or repealed (I'm not sure about the terminology) and are assuming it will be passed by the end of the week.

I hope not. Actually watching the politicians discuss it was a bit of a relief after all the media talking about economics when they probably shouldn't be. I'll highlight some of the major points to you:

When the bill was first proposed it was no where near $700 billion.

You can't decide to regulate the financial industry without regulating the people who will be regulating it. In otherwords, you can't have Bernanke buying up the financial industry and regulating it when he is totally exempt from being investigated or questioned about anything he decides to do (I still don't like the fact that they even put that into the bill).

This bill does nothing to change the system. It doesn't increase regulation of the companies (once the US sells the securities, the companies can go back to doing whatever they were before without regulation) -as a side note, another point made was that the democrats voted against corporate regulation... I'm very disappointed - it doesn't change the tax rates for anybody (corporate or consumer), and it doesn't change any laws that need to be fixed or replaced.

One thing that George Bush and Bernanke have been saying is that this is the worst economic position the country has ever been in. Someone, I think Pelosi, pointed out: What about the Great Depression? I don't understand how anyone can believe this is the worst state we've ever been in... This is why I made this forum. So that people won't stop using their heads and blindly follow media. It was even said that the issue in the 80's was even worse than it is now, and the FDIC insurance (something I'll be looking up) was able to fix it without any exchange of cash whatsoever.

Many people (George Bush and Bernanke) are saying "how did this sneak up on us? This came out of nowhere!" Which we all know to be false. For the past year and a half people have been talking about slowed growth and a possible recession. By the way, let me tell you now that we are NOT in a recession. Our growth has slowed. We are still growing, just at a slower rate.

The reward issue was brought up a lot. Why should we reward wall-street scum for excessive and irresponsible lending with what was referred to as a "golden parachute." They were saying that we can't let them think it's ok to deal like this. Which, by the way, is what I said.

Many people for the bill were saying that congress has to do something. I'm sure some of you will agree with that, and I do too, but not this something. You need to have congress do something that will fix the heart of the problem. $700 billion is a lot to just "hold us over" until we find a real solution. Let's just skip the bailout and go straight to the real solution.

Another argument was that it was the only choice. That is wrong. Wrong. Wrong. Wrong. There's strengthening the FDIC, there's increasing regulation on financial institutions, there's creating incentives to not screw over an entire population of homeowners. But no... We'll just give them $700 billion.

Another thing is the tax payers. Some argued that the securities could never be sold, while others argued that the securities can be sold for profit. I don't know. Eitherway, the tax payers will have to pay for it to begin with. Obama and McCain both say that they will fix the deficit. If the $700 billion dollars goes through, it will be on credit, and the next president will raise taxes to fix it. When the government sells them, we won't be seeing that profit.

There is a problem, but it's no where near as big as their trying to make it. Don't let someone who wants to run the financial industry with no regulation take over. What about all the banks that are still doing fine? Doing great even? Bank of America, Wachovia, Chase, what about them? Let the free market swallow all the institutions that refused to play fair, don't make us pay for it.