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November 25, 2008

Comments

John

You know, on additional consideration, I also can't help but notice that the total cost of all these bailouts and loans is somewhere in the neighborhood of four trillion dollars.

In case anybody's having trouble with the math, that's about thirteen thousand dollars for every citizen of the United States! I'm not suggesting we run headlong into Socialism, but c'mon! With that kind of money, almost all of us could pay off our consumer debt. Yolanda and Italo wouldn't need their credit lines. People could buy cars from Wayne in cash.

Maybe you should be asking Irwin Kellner why the government is putting us all into extraordinary debt (someone has to pay this back, after all) so that we can take out more loans.

John

Am I the only one seeing a problem, here?

Banks create money by loaning it. Usually, the amount they're allowed to create is based on their reserves, but the bailout bill reduces the reserve requirement to zero. Since banks can, therefore, make as many loans as they like with no consequences, they're simply being petulant.

So what do we do? Give them more money.

Worse, we give them money to help re-inflate housing prices! Isn't Greenspan's housing bubble one of the things that got us into this mess?

And hey, since the economy is shrinking, won't these trillions of dollars cause a bit of inflation...?

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