Tuesday, September 30, 2008

Congrats

First thing: I'm a generation X'er, so my sarcasm is legendary among people who know me - I more or less took over where Kurt Cobain (my idol) left off.

I am so thrilled that the $700 Billion bailout plan was rejected by Congress. (Not sarcasm, for a change). It was voted down for the wrong reasons (to keep the politcos slopping from the great trough like so many pigs) but at least it was done.

The government proposed to print up a new $700 billion dollars (million to those of you out of the US who grew up on the British number system) and set up a fund to buy back bad debt. The problem with buying bad debt is that it only gets worse the more it sells. It would have helped the rich and the companies that were responsible for creating these problems, but it would have made things worse for the average American (you and me).

You might not agree, but think about this: inflation has been rising since November 2007 or so when they printed up a paltry few billion, funneled it (laundered in normal terms) through JP Morgan Chase, and basically gave it, scot free, to Bear Sterns. Let me give you a very basic idea of how inflation really works.

We'll set aside the idea of usury - the charging of interest - for the moment and simply focus on inflation: Say you have 10 potatoes and 10 slips of paper. Each of those slips of paper can be said to equal 1 potato. Now print up 10 more slips of paper. Now it takes 2 slips to equal 1 potato. Now print up 80 more, now it takes 10 slips to equal 1 potato.

That's inflation.

Every new dollar they print up without taking back and destroying used, torn money, makes our money less valuable. Our currency has been falling in the world markets, essentials like food, shelter and prescription medication have been rising more rapidly since the end of '07 due to the Bear Sterns bailout. Now the government wants to print up far more cash to bail out the rich and they're trying to make the American people believe it's our fault that that needs to happen.

That doesn't wash with me.

They say the consequences of doing nothing may mean people can't get home loans or credit - big deal: it was too much credit (too much fantasy money on paper) that got us into this mess in the first place. If they ever do get their way, the cost of living will skyrocket for who? For us, the average American. If they print up another few hundred billion, I could see it costing $50 for a gallon of gas or milk in just a couple of years.

Which would you rather have? Not be able to get a new credit card or have to pay $30-50 for a gallon of gas? The bailout will hurt us, low to middle class the most and with no bailout, the rich and the politicians will be hurt the most. They are the ones responsible for this through their irresponsibility in investments.

Now the question becomes: who do we want to get hurt? We know who the politicians and rich would like to see hurt.

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