What If There Was No US government bail out?
What would most likely to happen if there was no US government bail out? You may be having visions of stock market crashes, food and fuel shortages, or riots in the streets across the face of the globe. Some of that could have been likely to occur, but not, judging from the man in the street comments being posted and broadcast, to the extent Mr. Bush would have us believe.
[ad#ad1]The US financial system is in a state of crisis. No one doubts that. If you live in the US you know more about what that means than anyone. For years, loans were offered and approved for all sorts of reasons; as long as you weren’t the average middle class citizen trying to make ends meet. So what will it mean for Main Street, USA, if there was no US government bail out? Pretty much, more of what they are dealing with now. Higher than reasonable interest rates, exaggerated food bills, and having to choose between groceries and heat this winter.
The current US policy of trickle down economics, in truth, works only on the negative side of the equation. The loss of equity that Wall Street will suffer will definitely trickle down through the economy whereas the benefits of the current policy have never made it past Wall Street.
The US is perceived as a major consumer in the global market and foreign markets are responding to our problems and possible solutions accordingly. This is a reflection of Wall Street thinking. Instead of strengthening their markets against a US crash they are buying into the crash and exacerbating it. If there was no US government bail out it is quite possible these markets would crash as well. The impact on their countries could well be catastrophic.
It’s hard to have any sympathy for Wall Street though. These banks have mismanaged and embezzled the funds of the American taxpayer for years and now ask that the American taxpayer bail them out. The righteous indignation of Main Street, USA, is a sleeping tiger that is about to awaken. Whether that sentiment is true in other countries as well, only they can answer.
Many people in the US right now would rather suffer a crash than continue trying to save the beached whale that Wall Street has become. The common man’s feeling is that there should be no US government bail out. If the foundation of a building is compromised; you bring the building down, you don’t keep trying to shore it up. Wall Street is a building with a compromised foundation.
The short term effects of there being no US government bail out of Wall Street will be devastating. People who are struggling to keep their homes will lose them, more businesses will close, and local and state governments will have to scramble to meet their obligations. The long term effect though, could well mean a stronger and healthier financial system.
Finally, continuing to shore up Wall Street, promises to bankrupt the nation. Because of this, the question of a US government bail out vs. no US government bail out is less about what will happen as it is about when it will happen. Whether the US is forced into bankruptcy or Depression indicators are that the rest of the world will follow.
October 4th, 2008 at 12:14 pm
I’m just glad that there is now a US government bail out or else we would all be in trouble.