The 700 Billion Dollar Bailout Bill - Bailing Out the Banks
To Bail or Not To Bail?
700 Billion Dollars - that's the amount of money that the government would like to give to struggling firms on Wall Street to bail them out from failing. 700 BILLION DOLLARS!. Just the thought of that amount of money is absolutely staggering to the average consumer. The question of the day though is: Should the government be doing this?
After the shocking defeat of the 700 Billion Bailout Bill in the House of Representatives earlier in the week-The Wall Street Stock Exchange had it's worst point loss in a single day: 777 points down at the close. Over a trillion dollars were lost that day in the stock market. Most consumers don't understand how our economy is so tied to Wall Street and the stock market - so for many people that don't understand stocks they don't realize the devastating effects a plunge of this kind has on the average American and on the global economy.
The Senate Votes to Pass the 700 Billion Dollar Bill
Now I'm no financial expert - so I can't even begin to explain to the average American the intricacies of the financial system of the government - but what I do know is this: As a kid, after saving about $70 bucks from score-keeping at the local bowling alley, my dad, then working for the Navy, invested my $70 dollars in the stock market in a stock called Occidental Petroleum. That stock went on to make this young kid richer to the tune of $500. So by the time I was about 12 or so I had taken that $70 and made it into a great little return (of course thanks to my stock savvy dad)
So the point here is that I began to understand at an early age some dynamics of the stock market, and began to understand how investing could be a good thing.
So back to to the 700 Billion dollar bailout package that just passed Senate approval tonight: Why should we bailout Wall Street when they have made some really stupid decisions and caused our economy to go into a tailspin?
I think right now we are in one of those rare moments in history when we are damned if we do it and damned if we don't. Obviously to just let Wall Street suck it up on their own is going to have devastating consequences for the average American - credit dries up and what drives our capitalist society? Free trade and credit. Without the ability to use credit we will be strapped in many ways because the banks will simply not be able to loan money the way they have in the past. Now you might think well maybe that's a good thing, we shouldn't be depending on credit anyway. But think about what the inability to be able to buy homes, refinance existing loans, borrow money to replace that broken washer, repair that bad roof, or buy that much needed car for work would do to the average American.
I think you might be getting the picture.
Poll on the 700 Billion Dollar Bailout Bill
Should the government bailout Wall Street?See results without voting
Credit Will Dry Up in Our Economy Without Intervention
Not being able to borrow money and having credit is just part of the problem.
We are in a crisis that has not been seen since the days of the Great Depression - homes have been overvalued, bad loans have been given and taken, and now we are about to pay the piper for excessive spending not only in some of our own lives but also for for the excessive spending of Wall Street and the bad decisions that have been made. Lack of government oversight by the Bush Administration has left too many big kids loose in the Wall Street Candy Store.
We have to admit that we've had it pretty good in America - even the poorest people have it better than the poor in many other countries. I am not a rich person by any standard, in fact I would gander to say that I am really one of the working poor, especially since we had to close our business recently and I am now depending on having to recover from that loss (thanks to our faltering economy and business decisions made) But I do realize that I have it much better than a lot of people in other poorer countries- and I do understand that if we are to even have a chance at our economy recovering it's critical that this bailout plan gets passed.
Will the massive bailout plan work? Or will we be right back in the same place a few months or years down the road? It's hard to tell, none of us have a crystal ball to predict the future. It's obvious though that if we don't do something fairly quickly the situation is going to go from bad to worse very very fast- and I'd rather side on voting for the bailout instead of doing nothing and watching our economy go further down the tubes.
From what I gather, a lot of our government officials feel the same way: Stuck between a rock and a hard spot.They don't want to be in this situation. They don't want to have to pass this bill, they don't want to have to bailout an irresponsible Wall Street to the tune of 700 Billion dollars - but they also don't want to see the American people suffer from an economy going down like a massive avalanche.
An easy decision loaning Wall Street 700 Billion Dollars? Not by any means. But from this writers point of view, a very necessary one.
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