The government is about to spend $700 billion of our tax dollars to bail out the finance companies and the people who took out no-qualification loans to hide their credit-unworthiness.
The rationale for this largest bailout in U.S. history? That it will stimulate banks to lend again, thereby boosting our economy.
But isn't that just going to reward those borrowers and lenders for their greed and dishonesty and make them more likely to revert back to their irresponsible behavior?
Sure, the bailout will be a short-term boost to the economy, but it will be like a heroin shot: it feels good briefly but soon, you're much worse off.
An economy should not be based on liberal lending. It should be based on people and businesses buying for cash, and only when truly necessary, on credit when both the investment and the borrower are truly credit-worthy. Of course, such conservative financial practices will lead to a slower-growing economy, but it will be an economy build on a foundation of bricks, not a house of cards.
Maybe what's needed is not government bailouts that prop up that house of cards, but the old-fashioned self-discipline needed to build a sturdy home.
What am I not understanding?