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The latest bailout to remedy the financial meltdown has hit a snag in Congress, and we — along with millions of fellow citizens — have no idea what our representatives in Washington, D.C. will do to resolve the crisis.
Solving this dilemma parallels a good game of Russian roulette with Congress holding the gun to taxpayers’ heads.
At stake is whether Congress will approve a $700 billion relief deal to stabilize major Wall Street institutions that have plunged this nation into the worst financial calamity since the Great Depression.
Combined with the $500 billion debt this country already owes, the overall budget deficit could rise to at least $1.4 trillion or 9 percent of the GDP (gross domestic product).
If Congress eventually passes legislation to bail out Fannie Mae, Freddie Mac, John, Paul and Ringo, we will all suffer. At one estimate, the bailout will cost every American $2,300. Although we won’t have to dig deep into our pockets and cough up that amount in big bills and pocket change, we will feel it in other ways. We frankly don’t see how either Presidential candidate, John McCain and Barack Obama, can reduce taxes without drastically reducing services. No doubt something will give by year’s end.
In testimony Wednesday before a Congressional Joint Economic Committee pondering this multi-billion dollar bailout, Federal Reserve Chairman Ben Bernanke said, “... the credit crisis has started to damage household and business spending.”
Perhaps Bernanke should have stated the credit crisis has been severely damaging household and business spending for the past 18 months.
We’re feeling it everywhere. Fuel prices soared to over $4 a gallon during the summer but have dropped about 50 cents, and food prices are slowly climbing. Many residents in Northern Nevada have also seen the price of goods and services increase. Housing prices in Churchill and Lyon counties have declined while obtaining credit for home or personal loans has tightened because near-perfect, walk-on-water credit scores are required.
Slow growth will hurt employment and cause more people to lose their jobs. Payrolls have fallen for eight consecutive months and the national unemployment rate is 6.1 percent.
We don’t have the answers to this credit crisis, but every person’s voice needs to be heard by their elected officials — Senators Reid and Ensign and Congressman Heller. Whether we like it or not, both the Senate and House will pass an exorbitant bailout in one form or another because Congress seems determined to provide relief to the financial world.
But this bailout must be fair and responsible; CEOs must not receive government money toward their golden parachutes after they leave a firm for whatever reason; CEOs and individuals who lied to their customers about the solvency of their firms should be prosecuted like the Enron crowd; a system must be put into place that will ensure another bailout of this magnitude does not occur again (and you thought the savings and loan bailout of $160.1 billion in the late 1980s was expensive!); and the government needs to re-institute a strong system of oversight and regulation of Wall Street financial institutions.
Not one taxpayer should let Congress off the hook unless the broken parts of this financial mess are fixed, so we don’t have to worry about another exorbitant government bailout for future generations.
It’s wishful thinking ... but we can also hope for a miracle. At least those are free.
Editorials are written by the LVN Editorial Board.
Solving this dilemma parallels a good game of Russian roulette with Congress holding the gun to taxpayers’ heads.
At stake is whether Congress will approve a $700 billion relief deal to stabilize major Wall Street institutions that have plunged this nation into the worst financial calamity since the Great Depression.
Combined with the $500 billion debt this country already owes, the overall budget deficit could rise to at least $1.4 trillion or 9 percent of the GDP (gross domestic product).
If Congress eventually passes legislation to bail out Fannie Mae, Freddie Mac, John, Paul and Ringo, we will all suffer. At one estimate, the bailout will cost every American $2,300. Although we won’t have to dig deep into our pockets and cough up that amount in big bills and pocket change, we will feel it in other ways. We frankly don’t see how either Presidential candidate, John McCain and Barack Obama, can reduce taxes without drastically reducing services. No doubt something will give by year’s end.
In testimony Wednesday before a Congressional Joint Economic Committee pondering this multi-billion dollar bailout, Federal Reserve Chairman Ben Bernanke said, “... the credit crisis has started to damage household and business spending.”
Perhaps Bernanke should have stated the credit crisis has been severely damaging household and business spending for the past 18 months.
We’re feeling it everywhere. Fuel prices soared to over $4 a gallon during the summer but have dropped about 50 cents, and food prices are slowly climbing. Many residents in Northern Nevada have also seen the price of goods and services increase. Housing prices in Churchill and Lyon counties have declined while obtaining credit for home or personal loans has tightened because near-perfect, walk-on-water credit scores are required.
Slow growth will hurt employment and cause more people to lose their jobs. Payrolls have fallen for eight consecutive months and the national unemployment rate is 6.1 percent.
We don’t have the answers to this credit crisis, but every person’s voice needs to be heard by their elected officials — Senators Reid and Ensign and Congressman Heller. Whether we like it or not, both the Senate and House will pass an exorbitant bailout in one form or another because Congress seems determined to provide relief to the financial world.
But this bailout must be fair and responsible; CEOs must not receive government money toward their golden parachutes after they leave a firm for whatever reason; CEOs and individuals who lied to their customers about the solvency of their firms should be prosecuted like the Enron crowd; a system must be put into place that will ensure another bailout of this magnitude does not occur again (and you thought the savings and loan bailout of $160.1 billion in the late 1980s was expensive!); and the government needs to re-institute a strong system of oversight and regulation of Wall Street financial institutions.
Not one taxpayer should let Congress off the hook unless the broken parts of this financial mess are fixed, so we don’t have to worry about another exorbitant government bailout for future generations.
It’s wishful thinking ... but we can also hope for a miracle. At least those are free.
Editorials are written by the LVN Editorial Board.
