The bailout money was released. the finantial plan was passed by US parliament, both the senate and the house. Many US politicians said in common, "the bailout money is needed to sustain and revive our economy." Ok. I understand their argument. Then, for whom and what will the huge amount of money be used? That very important factor remained ambiguous even after the bailout money plan was passed.
The first problem is that, as I mentioned, for whom and what the money will be used. As we already know, the economic meltdown was occurred by the very greedy Wall street investors and foolish US government which leaded many people to invest in real estate by the mortgage policy. However, the money is planned to be used for rescuing those people. You know, the same people inappropriately invested real estate market, buying land on speculation, disturbing the natural demand and production in free market. But now they are getting a help from the government! without being asked about their previous faults and mistakes. Is it really justifiable to offset their misleading strategy to make bubbles in free market by public money? Are they really the important people that shouldn't be collapsed to sustain US economy? I totally disagree. They should, no, must, take their responsibility on making the economic crisis.
The second problem is that who will have to pay for the bailout money. I can say that everyone in the whole world is the person who should pay the 'bill'. Why? As you know, US government doesn't have such a big money in its hands right now. So the typical two ways to make the money is to make new money and issuing relatively uncreditable bonds. the former one seems easy and is a very effective in a short term. However, making more money means the rarity of money decreases, causing a great inflation in economy. And if this happens, the result will be much more disasterous.
What about the second way? Though the US government issues more bonds, because many people now know that dollars are losing power, not many people would willingly buy them. Moreover, if the US market suffer from a new depression, there is no way to get the payback. Whichever the US government choose the way, everyone who is a US creditor has to face the damage about their money.
...this series will continue... .
2 comments:
I like your blog. I can tell that you like to write and share your mind. That is good. Here is your second blog grade:
Consistency: 5
Creativity: 5
Content: 5
Overall: 5
20/20
Keep on sharing your thoughts. By the way, try to make your paragraphs a little shorter. That way it's easier to read. You can have many paragraphs, but just make them shorter so it doesn't look like so much to read... :) Good job!
I had already read all of your article before, then You gave me some more news about from global market of finance. Yes, how terrible actuality! I though you are not giving us some information only, also intelligence, and that just let me have a competition mind.
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