Wednesday, October 1, 2008

Bailout--I Mean, Rescue Package--Part 2

Well, in a somewhat predictable turn of events, lawmakers scrambled to put together a new bailout proposal (which, by the way, they want to call a "rescue package," not a "bailout," because that brings a stigma with which they don’t want to associate it. In my mind, no matter what they want to call it, we need to recognize it for what it is: a bailout) after the first one failed Monday. This time around, in order to get the bill passed, they added some extra items to entice voters, including tax breaks, ta and higher FDIC insurance limits on deposits. But will it be enough?

You have to almost sit back and laugh--or cry--at how this is playing out. The first version of the bill experienced a stunning defeat, mainly because voters were outraged at the $700 billion price tag. So what did lawmakers do? They came back with an even bigger bill that is going to cost taxpayers even more. Of course, they haven’t figured out how they are going to pay for the $700 billion part, let alone the new tax breaks and increased pressure that would be added to the FDIC’s thin fund. So what can you get out of all this?

I think it is safe to say that, one way or another something is going to get passed; it is just a matter of how much it will cost us when all is said and done. Another proposal that was being discussed in the House would have added another $100 billion to the bill and funded things such as alternative energy research, according to the New York Times. What, exactly, does that have to do with the financial crisis, other than increasing the already burdensome debt of our nation? It is clear that lawmakers are going to do whatever it takes to get this thing through in a manner that makes them look good and that makes them appear as though they fought for the people.

The Senate is likely to vote on the new bill this evening, and the House is expected to vote on Friday, so we shall see what happens. If the bill gets shot down again, the stock market will surely be hit hard--again--but you can bet that if this one fails, yet another version will follow.

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