The federal government has already spent $350B plus the bottomless money well for AIG on this so called “bail-out.” No-one, not even the people who have received these large sums, can tell us where the money went, what it was used for and there has been no apparent effect on our economy. This goes to prove that a quick fix will never work; nor does trickle down economics.
A simpler, more effective long term, bottom up approach makes more sense. Bailing out the auto industry will not work either. Here is a better idea:
Have the federal government mandate all mortgage lenders (especially Freddie and Fannie) offer a 3.5% 30yr mortgage to all US home owners. This would put hundreds of dollars per month into households for saving, spending or reducing debt. And, in the case of those facing foreclosure, it could help people keep their homes. It would help fix the economy from the ground up and give us a stable foundation for the road to recovery.
Otherwise, we need to objectivly abandon the auto industry, let them fail or consildate, let those workers go unemployed, let their homes enter the foreclosure bucket and THEN the market will bottom out. From that point reform can insue.
The last stimulus package and the recent bailouts are obvious failures. Congress and the next administration are talking of another large cash infusion stimulus package. Einstein described insanity as “doing the same thing over and over again and expecting different results.” Apparently we are insane.
Embedded video from CNN Video