700 BILLION dollars
So I don't think I have made a political post on this blog, even though politics is one of my main interests. But this whole "bail-out" things is really ticking me off, so I figured I would comment.
I've never emailed or written my member of Congress before, but I finally did today. His name is Frank Wolf, of the Virginia 10th district, but if you want to find your rep, click here. If you have an opinion on this, I think you should let your representative know. Here is my opinion: (and no, I didn't rant like this to Rep. Wolf, I was a bit more subdued.)
I don't believe that the government should interfere in decisions already made by the free market. The banks should have to pay the consequences for their bad decisions. If they want to make new rules to make it less likely for this to happen in the future, then I am fine with that, but I don't think they should go and try to undue stupid decisions that have already been made. Obviously, these banks thought that they would make money by investing in these subprime mortgages. If they didn't think they would make money, they wouldn't have done it. What people often fail to realize, is that any time you "invest" in something, you are taking a risk. Anytime you invest in a market, you are taking a risk that you will make more money then you lose. Sure, it isn't playing roulette in Vegas, but it is a risk nonetheless. And this time the big Wall Street firms lost (and to be fair, the people running these firms don't really seem to have lost, since they are getting insane amounts of compensation for leading failing business, but I digress). Boo-hoo. I honestly don't care that your Wall Street bank is failing. You gambled, and lost. That is life. Call me cold-hearted, but I also don't care that home prices are going down. Why, because homes have become unaffordable. Homes are supposed to be places you live in, not instant access ATMs. Now that prices are going down, homes in the DC area are actually entering the range of affordability - they aren't quite there yet, but they are getting close. I have heard Sec. Bernarke's argument that if these banks fail, then people won't be able to borrow money. OK, so no one can borrow money. Why is that bad? Maybe I won't be able to get a mortgage? Well, all that would do is make home prices go down even more. Again, making housing more affordable. If people can't borrow money this might actually force people to - gasp - live within their means. I know that is a crazy concept for America, but it wouldn't be the worst thing ever. Lorena and I might not be rich, but I think we are pretty financially responsible i.e. we don't buy things we can't afford. Besides a studen loan and a car payment, we have no other recurring monthly debt. Since we have been responsible, I don't feel like bailing out banks and people who weren't.
When people talk about how the economy always has to be growing, I only think of pyramid schemes. Things don't always grow. There are cycles in life, the economy, the environment, etc. Ron Paul wrote a nice op-ed for CNN about why a bail-out would be bad, and I couldn't agree more. Bailing out would set a bad precedent and it wouldn't solve the problems underlying the market that are causing this "disaster" in the first place.
So, whether you agree, or disagree with me, I think you should let your representative know. 700 billion dollars (at a minimum) is a lot of your money to be spent, without you having a say.
700 BILLION dollars