Bail Them Out Like This: Send Me the Money
I think that if the federal government is going to bail out the bad debt for homes (and other things) that got loans that they should, since they’re giving the money away, pay the debt back through the people. Not really. But if you think about it wouldn’t it be better to 1) Bail out the people and 2) bail out the companies rather than 1) bail out the companies and 2) then leave the people who are also in over their heads out in the streets?
The problem that we have is that our economy is like a ship. On the outer part of the ship there is a ring of cups that line the ship. We’ll pretend that they’re cups of the masses. If you are reading this, you’re a cup. Inside the circle of cups is a bank of kettles that form another ring. The kettles are the financial institutions (this illustration is flawed and no other companies are in it) and inside of the kettles is the hull of the ship, which is wide open. This ship has been sailing along and the cups have been taking on water. Which is OK, because the water is then taken on by the kettles because they’ve worked out ‘water loan’ programs to save the cups from being overwhelmed. All of the water that the kettles were holding was supposed to be put back into the cups as the cups could take the water back. Except that the kettles were taking in water they had no room for.
Never fear because the hull of the ship can take the water from the kettles!
Except that the hull of the ship has been over six trillion gallons of water full. So the kettles loading their water into the hull doesn’t keep the cups from over-flowing because the kettles have more room for water. Instead the whole ship capsizes because the hull, which was flooding with trillions of gallons of water, takes on the kettles of water. So the ship goes under and the water, which has always been there, is now just re-distributed to other places. The ship may come back after its been hauled to port, completely gutted, rebuilt and restored, but the damage at present is so severe that it cannot recover with the current system.
I don’t know if that illustration makes any sense but it is how I’m seeing our current economic crisis. If we were to enable the cups to take back more water from the kettles through emptying their contents into the hull: we still get an overwhelmed hull. We have problems at each level because the system never took into account that taking on water is a bad idea on ANY boat. You can put it in a gold chalice, a silver spoon or a dixie cup and its still not intended to be IN the boat.
I do agree with wisebread though: the housing market is NOT the problem.
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