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Congress To Vote Again On Economic Bail Out Plan

By Erik Folgate

I haven’t talked much about the economic bail out plan being rejected on Monday, because I feel like all I’ve been talking about on this website is the economy. There comes a point when we must think about our own personal finances and what is right for our families, rather than what the federal government is doing. The lack of care and consideration towards what goes on in our local governments is alarming. Having said that, this economic bail out plan has massive implications. Much of this is politically charged, and you would not have seen a $700 billion dollar bail out plan so quickly proposed by the White House if it weren’t an election year. Congress voted down the bill on Monday, and now they’re going to vote for a revised bill tomorrow, so the market is going to be turbulent the entire week until something gets passed.

What does this mean for you?

  • Your tax dollars will be buying a portion of the millions of toxic mortgages on the books of failing banks.
  • You’ll be bailing out banks and executives that made horrible financial decisions with the hopes of maximizing profits.
  • The government will go into more debt, and the federal deficit will increase about 15 percent. Massive amounts of debt is part of the reason we got into this mess, and we’re cleaning it up with more debt. Nice.

How Will this Bail Out Affect Our Future Economy?

As much as you think the government is a bunch of idiots, they have dozens of economic advisors telling them what to do. They know that once the housing market rebounds, all of this worthless mortgage paper that they are buying will become worth something significant. Then, financial institutions will buy it back at a premium price, and the government will profit from the bail out. They are doing exactly what Warrent Buffet is doing. They’re buying low in hopes of selling high later.

Response Question: Since we are the ones loaning the money to the government to buy these mortgages, do you think we should earn a dividend once the government makes money from this deal?

Erik Folgate
Erik and his wife, Lindzee, live in Orlando, Florida with a baby boy on the way. Erik works as an account manager for a marketing company, and considers counseling friends, family and the readers of Money Crashers his personal ministry to others. Erik became passionate about personal finance and helping others make wise financial decisions after racking up over $20k in credit card and student loan debt within the first two years of college.

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  • http://www.manhattancalumet.com/ Dennis The Menace

    Im getting a little tired of all the bailouts

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