Dollars Dollars Everywhere Without an End in Sight

I would be the first to admit that I am no economic expert, but even I recognize a runaway train about to jump the tracks. What we were originally told was a bailout program to buy up supposed toxic bad loans to ease the markets and remove dangerous burdens from our financial institutions has now grown out of any semblance of control. The original estimate of seven hundred billion dollars has mushroomed to seven trillion dollars and counting. Further, we are not using these funds for what we were told was their intended purpose. No longer is the government simply bailing out bad loans, real estate loans in particular, but instead the government is throwing money to almost any company that has a claim of hard times. The latest to line up are the big three car companies.

The current debate taking place on Capital Hill over whether or not to spend more billions of dollars to bailout the auto industry is all for show. Our representatives in Washington are making a big show of having some semblance of responsibility by questioning the requests of Ford, Chrysler, and General Motors. Do not be fooled, they will not only give them the thirty five billion they are requesting, but probably end up throwing fifty or more billion at the three auto makers. After all, all Washington ever seems to do is throw money, our money, at whatever problem rears its ugly head. The question is where will this end and what can we do to end this irresponsible larceny.

The next batter up in this dollars for all are the State governments who are finding themselves in tight financial restraints due to the economic downturn. Over the last few years when funds were pouring in during the good economic times many States expanded spending that is now no longer tenable. With State Constitutions requiring a balanced budget, they find themselves between a rock and a hard place being squeezed by programs they can no longer sustain. So, in this time of the great bailouts and with federal monies flowing unchecked, guess where they are turning. My bet is after the States get their pound of flesh from the federal government the next will be the cities lining up for their share. The question is becoming not when will this stop, but will it ever stop.

But what are the consequences of this totally out of control spending? It would be bad enough if the government actually had the funds to allocate but they don’t. All these dollars upon dollars are going to have to be borrowed from somewhere or printed which is like making them out of thin air. Either way we will face financial repercussions from this ill thought out bailouts. The two alternate endings are either total failure with a totally wrecked economy or a saved economy that goes into rampant inflation as the dollar becomes worthless due to overextension and placing too many new dollars into circulation causing depreciation. Neither of these sound all that much fun in our future. Either consequence will erode wealth. We must insist that our representatives in Washington stop their irresponsible money policies that threaten our future and that of our children. As they are so fond of saying, we need to stop this for the children.

Beyond the Cusp