Richard Feynman once said of large numbers that "astronomical" was no longer the best adjective. "Economical" was. There are more dollars in the national debt than there are miles in a lightyear.
Today we're getting a some exposure to one of those numbers: $700 billion. It's the size of the bailout of the various failing banks. People like to trot out the Iraq war (if I may link to an anti-war site so you can be sure the cost is not biased downward) when discussing how federal money could be better spent, so let me do the same thing. The five years of the Iraq war have cost more than $100 billion less than this bailout. Let me say that again for emphasis:
The bailout, which our government has decided upon in mere days of deliberation, will cost over $100 billion more than the entire five-year Iraq war thus far.
Forget who's to blame. If you want my opinion, it's no politician's fault. It's the fault of banks and borrowers making stupid deals with each other during good times and hoping those good times would last forever. Deregulation probably saved it from being a worse crisis involving the total destruction of the mortgage sector rather than sporadic failure of parts of the banking system. The only way to have prevented the problem would have been to make it more difficult for low-income people to borrow. That is literally the only way, no matter how you dress it up. And if you really want to blow your mind about which party is not generally a fan of such an idea, read this NYT article from 2003, especially the last few paragraphs:
''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''
I don't blame him or his party either. Banks and borrowers should have the right to be stupid. But even if you totally disagree and think I'm an idiot and this is somehow entirely Bush's fault, let's say you're completely right. We still might agree on this:
$2000+ for every man, woman, and child in this country is far too big a price to pay for "fixing" this problem. There is no chance in the world that letting the problem resolve itself in the free market will do more damage than exploding our national debt and devaluing our dollar by MORE THAN THE ENTIRE IRAQ WAR COST (did I mention that?) in its entire length thus far. And our government is doing this with only a few days of frightened consideration by out-of-touch panicky politicians facing an election year. And furthermore the entire authority for how the bailout of going to be conducted will rest entirely on the shoulders of the Secretary of the Treasury. And the law granting him near-dictatorial authority over the US financial sector also prohibits even judicial overview of the decisions made. And furthermore, we don't even know who the Secretary of the Treasury will be in a few months time because the new president will appoint a new one. We're granting what is a nearly absolute power over almost a trillion of our dollars to... who knows who?
It will be a disaster. It's a free country and of course you'll have to make up your own mind, but as for me, I oppose this plan entirely. I'm going to call my representatives and let them know. I hope you might consider doing the same.
It's the fault of banks and borrowers making stupid deals with each other during good times and hoping those good times would last forever.
Nah, they were merely hoping that they could cash out before the music stopped. The good times didn't need to last forever, just long enough to run off with a mountain of loot. And you know what? It worked.
I heard yesterday that if this does get paid out, the next president won't have anything in his budget for the first two years of his administration for any change in policy. Anyone know if that's true? To me, this would suggest that all the budgets and policy statements that have been presented so far may be meaningless since they may all need to be redone.
Deregulation probably saved it from being a worse crisis involving the total destruction of the mortgage sector rather than sporadic failure of parts of the banking system.
That's BS. Just because you write something, it doesn't make it true.
Check the facts. The deregulation bill passed by 90 votes in the senate, was signed by Bill Clinton, and merely brought US banking up to European standards. You want the real cause, read that New York Times article I linked.
???How did deregulation prevent "the total destruction of the mortgage sector"???
Of course, it's not as if the government is not spending this bailout money in beating the living shit out of a country that didn't strike first and has no intention on paying for itself or paying us back. The money is used to buy assets, which will be resold at a later time, once markets have stabilized. The final end-cost of this bailout will actually be something significantly lower (I won't deign to guess the end value, but I will assume all these mortgage-backed securities will not simply evaporate).
Further, your claim:
"The deregulation bill passed by 90 votes in the senate"
Govtrack.us tracks the votes related to any bill and has this to say:
May 6, 1999 8:14 PMSenate
On Passage of the Bill (S.900 as amended )
Bill Passed 54-44, 2 not voting
You can clearly see that this vote was along party lines, R-fer and D-agin.
What you refer to is the agreement to the conference report in November, essentially agreeing on the final text of the bill after House and Senate members came together to combine any and all changes between them:
Nov 4, 1999 3:30 PMSenate
On the Conference Report (S.900 Conference Report )
Conference Report Agreed to 90-8, 1 not voting
FWIW, the 1 not voting on the conference report vote was Sen. John McCain, the 1 not voting on the bill passage was Sen. James Inhofe.