Sep 30, 2008

Anti-bailout article

I've read Ron Paul's view... now this article states why a bailout isn't 'crucial'. I'm certainly no expert but I know that if my brother asked to borrow $10k then blows it on drugs and whores... will I lend him $100k the next time he asks? Hell no. Sure, it'll lead to uncomfortable family gatherings for a bit - but the hope is he'll straighten himself out and lead a better life.*

*Not based on actual events. Drugs and whores aren't necessarily a bad thing.

EDIT: Also found this very interesting video. I've seen this guy on other blogs (maybe DT)... but he does offer a solution. Of course, I don't understand jack about it - but it sounds good :)


Eyal said...

There's another possible analogy. You brother borrowed your home for his party, got drunk and lit the firecrackers inside the house blowing the roof off. Now you can either 'punish' him and not fix the roof of your home preferring to live without one as winter approaches.. or you can foot the bill for his folly, fix the roof where you live and find other ways to punish/discipline him.

Frankly speaking, I'm not sure which scenario is the right one here. Is the roof really blown off? Is the repair guy offering to fix it the right one to hire? Are his fees over/under estimated?

I think the situation is complex enough that no one can know for sure. Economics isn't an exact science to begin with and these types of situations are especially tricky. I believe something needs to be done because the system is on the verge of breaking, if it hasn't already. Maybe the right action isn't in the current plan format but eventually some bailout intervention together with additional legislation/regulation will prove to be the lesser evil.

OONR7 said...

or take a loss with the house... get what I can from the insurance, start over in a new house and never speak to my brother again. Chances are that after some adjustment to the new pad my life will be what it was and eventually my brother and I would laugh about this years from now :)