Big Trouble in Little Washington

Posted by George Regal Categories: Editorials, Law, Site Features, US Economy, Wall Street

According to President Bush this bailout is a good deal for Main Street.  He assures us that the tax dollars invested will pay for themselves and then some.  Oh really?  That’s the definition of a good investment. Well, if this is such a good investment why aren’t private investors rushing in to snap up these assets and companies at bargain prices?  Hint: Because they aren’t good investments!

Adding the $700 billion to the rest of the actions taken recently (Bear Stearns, AIG, Fannie Mae and Freddie Mac, FHA rescue bill, and the rest) the total balloons to a whopping $1.8 trillion, and counting!  Where is this money coming from?  Unfortunately for us, it’s coming out of thin air!  Anytime the government spends more than it receives in tax revenue, they engage in deficit spending. This is accomplished by the Treasury Department auctioning Treasury Securities on the open market. These are the same securities that China has purchased to the tune of $2.2 trillion. With me so far?

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