Financial Crisis

Reading through today’s news is quite interesting. We are under a massive financial crisis with giants falling before our eyes. There is a lot of excitement on Wall Street to have the federal government bail out these bad debts so that the economy can get back on track. Robert Reich thinks it’s a bad idea and offers his own suggestions of where we should next go. Honestly, I don’t understand it. Economics as it is practices confuses the hell out of me.

I understand the importance of balancing a budget. I have a family. We have a set amount of money that needs to go out every month if we are to maintain our standard of living. We own our two cars outright, they are not owned by any bank. We rent. We have ourselves and one little guy to feed. We pay for water, electric, a land line, and my mobile phone. Those things add up, and we have to make them add up within the amount that Peter brings home every month.

Now, shouldn’t lending companies and governments operate the same way? You have a fixed amount you can count on, so you budget your expenses based on that. You prioritize your expenses, and the most important things get paid first. I would prefer to live in a state that views residents be fed, clothed, housed, and healthy before they go fight another nation. Although we live in a country that thinks the opposite, the priorities are set. Now, if one segment takes up too much money, i.e., more than the allotted amount, you have to cut the spending. Over spending, spending into the red, we are taught since we were little is bad financial sense.

So, why are we bailing companies out that seem to have done that? Why are we looking for a quick fix to “get the economy back on track” rather than holding them accountable? What happens to the individual in all this? Are they forgotten? What mortgages are causing these giant banks to fall? Should we just have one massive debt-forgiveness? Would that help? Start now. All loans, housing, car, education, etc., forgiven. One giant debt-forgiving strategy for individuals and corporations . And then, we have our ground rules. No more bad debt. We do lay-a-ways. Limit collateral to paid for items. What happened to one of our founding desires to NOT have debtor prisons? Aren’t we headed that way for individuals if this track continues?

Is it just me, or is this just another in a long list of things that proves how much common sense HAS eroded?

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