I think we need to all agree the bailout is a bad idea. Whether you believe Ron Paul for saying it provides a false bottom to an economy while not growing demand to match it, or whether you believe it sets a bad precedent that wall street can run business irresponsibly while fleecing money from main street with no repercussions because the government will bail you out. Fundamentally it is flawed to let business run in the ground by poor management to continue to be in business on the tax payer's dime.
So why the bail out? "The core of the bill allows the Treasury Department to buy $700 billion in bad mortgage assets from banks, to be held and eventually sold off if and when the market improves. Ideally, with cleaner balance sheets, banks would start lending to each other again, loosening up the nearly frozen credit markets."
Here's my solution. I believe rather than continue you follow the failed trickle down economics with a penchant for deregulation that got us here in the first place and hope the $700 billion dollars "ideally encourages banks to start lending again" - I say let the banks run themselves into the ground and have the government resolve the credit crunch by DIRECTLY LENDING MONEY TO THE MARKET.
Yes. I am proposing that rather than buy up all the "toxic loans" to relieve the banks their burden and free up their cash to be lent out again - have the government instead profit by making home loans, car loans, business loans etc directly to the market. In fact - if you want to stimulate the economy the government could loan money at lower interest rates than we have ever seen (think about a 3-4% home loan). And instead of the tax payers bailing out a cool $700 billion, have the tax payers turn a profit from this governmental lending.
BUT THIS IS OUTRAGEOUS! The government shouldn't be in business it would ruin an entire industry! Well - the financial industry did that all on their own, I say let them crash and burn but keep the economy stable through my plan. Additionally - I also propose that the natural progression of my plan should be for NEW banks to be created - and run responsibly, and slowly over time the government should reduce it's role in lending until the whole thing shakes out with a completely new crew of banks and the government is out of the industry all together.
Rather than wasting tax payer dollars on businesses who are fundamentally flawed, use the resources of the government to directly stabilize the economy for a period and make money for the tax payers in the process instead.
Just my two cents...