Bush: Bailout Is Not a Quick Fix for the Economy

Economic Turbulence

Here is an article that I wrote on December 8, 2007 regarding the imminent ecomonic crisis:

Everyone should prepare to withstand imminent economic turbulence in 2008.

Without being an economist, I feel confident in making this assertion just by looking at very simple, but huge indicators that anyone can witness and evaluate.

Our country is involved in an expensive war in the Middle East that costs billions of dollars. Our current administration is looking to expand the war. The invoice for the war will certainly be presented to the nation soon, which means the burden to fund war operations rests exclusively with taxpayers.

The size of government is growing, and elected officials are legislating guaranteed pay raises and benefits every single year for themselves and bureaucrats. Government employee salaries alone are increasing by a rate of at least 3% each year.

Those increases are being subsidized innocuously through, for example, the imposition of higher licensing fees, cigarette taxes and other creative taxing methods that fly under the radar of most taxpayers.

Small business retailers are finding it difficult to make ends meet. Next time, as you drive down Main Street in your community, take note of the number of retail vacancies that are slowly beginning to pop-up in shopping centers and strip malls.

Gasoline prices fluctuate every week by a margin of 10 to 15 cents per gallon. And, in case you haven’t noticed, utility companies are requesting and obtaining rate increases from your local public service commissions.

Housing values are slowly, but surely declining, meaning that your nest egg- the equity you’ve accumulated in your home- is beginning to disappear right before your very eyes.

What does this all mean?

Your margin of discretionary income is beginning to narrow exponentially, and you will be required to make up the difference by tapping into your savings and emergency funds.

Once those funds are tapped out, financial trouble begins.

Take the time to review and adjust your spending habits and the reliability of your source of income. Pay attention to your what your local and state representatives are doing to increase government spending.

Be cognizant of the fact that, as you’re taking steps to reduce your financial burden, others are taking steps to increase it.

Time is Running Out – By Ron Paul

Ron Paul issued this article regarding our government’s proposal to bail out Wall Street:

“Whenever a Great Bipartisan Consensus is announced, and a compliant media assures everyone that the wondrous actions of our wise leaders are being taken for our own good, you can know with absolute certainty that disaster is about to strike.

The events of the past week are no exception.

The bailout package that is about to be rammed down Congress’ throat is not just economically foolish.  It is downright sinister.  It makes a mockery of our Constitution, which our leaders should never again bother pretending is still in effect.  It promises the American people a never-ending nightmare of ever-greater debt liabilities they will have to shoulder.  Two weeks ago, financial analyst Jim Rogers said the bailout of Fannie Mae and Freddie Mac made America more communist than China!  “This is welfare for the rich,” he said. “This is socialism for the rich. It’s bailing out the financiers, the banks, the Wall Streeters.”

That describes the current bailout package to a T.  And we’re being told it’s unavoidable.

The claim that the market caused all this is so staggeringly foolish that only politicians and the media could pretend to believe it.  But that has become the conventional wisdom, with the desired result that those responsible for the credit bubble and its predictable consequences – predictable, that is, to those who understand sound, Austrian economics – are being let off the hook.  The Federal Reserve System is actually positioning itself as the savior, rather than the culprit, in this mess!

•    The Treasury Secretary is authorized to purchase up to $700 billion in mortgage-related assets at any one time.  That means $700 billion is only the very beginning of what will hit us.

•    Financial institutions are “designated as financial agents of the Government.”  This is the New Deal to end all New Deals.

•    Then there’s this: “Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.”  Translation: the Secretary can buy up whatever junk debt he wants to, burden the American people with it, and be subject to no one in the process.

There goes your country.

Even some so-called free-market economists are calling all this “sadly necessary.”  Sad, yes.  Necessary?  Don’t make me laugh.

Our one-party system is complicit in yet another crime against the American people.  The two major party candidates for president themselves initially indicated their strong support for bailouts of this kind – another example of the big choice we’re supposedly presented with this November: yes or yes.  Now, with a backlash brewing, they’re not quite sure what their views are.  A sad display, really.

Although the present bailout package is almost certainly not the end of the political atrocities we’ll witness in connection with the crisis, time is short.  Congress may vote as soon as tomorrow.  With a Rasmussen poll finding support for the bailout at an anemic seven percent, some members of Congress are afraid to vote for it.  Call them!  Let them hear from you!  Tell them you will never vote for anyone who supports this atrocity.

The issue boils down to this: do we care about freedom?  Do we care about responsibility and accountability?  Do we care that our government and media have been bought and paid for?  Do we care that average Americans are about to be looted in order to subsidize the fattest of cats on Wall Street and in government?  Do we care?

When the chips are down, will we stand up and fight, even if it means standing up against every stripe of fashionable opinion in politics and the media?

Times like these have a way of telling us what kind of a people we are, and what kind of country we shall be.”