Teddy Geithner and the Nightmare on Wall Street
The use of $2 TRILLION to bail out the toxic assets held by banks is the next act in a growing nightmare being written by Geithner and the Obama administration
The previous Bush administration was justifiably criticized for allowing government and the deficit to grow at an alarming rate. The eight years of Bush saw our deficit grow past the $1 TRILLION mark.
The Obama administration with Geithner outlining the plan has produced a deficit in 50 days that is three times as large as the Bush deficit created in 8 years while fighting two wars. This is not outlined as any defense of Bush it is simply comparing the fiscal mismanagement of the last eight years to the current fiscal nightmare being crafted at a pace that defies understanding.
Where did Geithner get the $2 TRILLION? Was it under his bed? Of course not. He controls the printing presses.
The printing presses must be working overtime printing the money with little regard to what was once called real economics. My understanding of real economics is quite simple. It needs two elements. The first element is production. Somebody has to be producing goods and services. The second required element of a true economy is that those goods and services must be needed or desired and bought by the businesses and population that makes up the marketplace
Geithner and Obama are obviously working for the banks and not concentrating on answers that fit into any description of a real economy. What will those trillions produce in any near term time frame? I don’t see the Obama TRILLIONS OF DOLLARS creating the production of anything that will create jobs or relieve the problems of small business and the entrepreneurs which are at the heart of the American economy.
We need leadership from our legislators that addresses jobs by helping employers solidify and expand their valid efforts.We do not need our money and future as a nation to be expended on propping up zombie companies and moribund financial institutions that have outlived their usefulness. A market driven by the actions of this administration is headed off any recognizable road. We have a problem of direction for which the answer will not be found on Map Quest or Google Earth.
The answer will come from the unrest of the population which is then expressed to our elected officials in no uncertain terms. To get them to think and to govern responsibly the fear of losing an election is a tool that will work. When thousand of citizens pressure for a return to the system that has made us a great nation, answers will start to appear in Congress. There are many bright people in Congress they need to have the cover of a restless, expressive population to step in front of their leadership that is taking us into dangerous economic territory.
If you are not yet worried about an administration that commits $2 TRILLION to “toxic assets” of banks without blinking an eye, revise your time schedule. Start being concerned and let your representatives know of your concern. A restless population will get them thinking about real solutions rather than simply papering over problems with money that is decreasing in value. Stealth financing should be understood as the tool that is planned to take care of these record breaking deficits. If you wonder who pays the price in a government created stealth financing plan—Take a look in the mirror and you will see who pays.
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Comments
Heath, Thanks for your comments which round out and improve the Post. I have changed the trillion to TRILLION in my post to help the focus of readers. When either billion or trillion is mentioned my eyes do not need not to be specially focused. My mind reads BILLION OR TRILLION whichever case has been used in the typing.
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Buck,
Great piece. A few quick points that I think should be mentioned.
1. The first $700 Billion TARP passed in September 2008 was to buy up these toxic assets. We gave the money away with no direct definition of what the money was for. Now we must spend another $2 TRILLION to do what was supposed to be done the first time. (I capitalize TRILLION because I have learned that people focus on the “2″ and not the Trillion”)
2. A huge part of the $2 TRILLION is give away money to pet projects as part of the “stimulous” and will not help to buy the toxic assets, nor will it increase GDP, nor stimulate anything economically.
3. Printing the money without increasing the GDP will cause inflation. We should just come out and say it. If the bail outs work, I don’t mind the inflation becasue we can deal with that later. It’s like having a house on fire and being concerned about the water damage from the fire hoses. What bothers me is the possibility that the house will still burn down because the fire hoses are not aimed at the base of the fire, but rather the tops of the flames.