Spring Break
The kind of change we need
Paul Hawkins
Issue date: 2/19/09 Section: Opinion
Since last fall, the economy has constantly been in the news. The housing market's fall, the banking crisis, massive bailouts and rising unemployment combined created a storm that has ruined this country's financial system, millions of lives and John McCain's 2008 presidential campaign all in a matter of months. It is a very scary time. However, help is on the way! The bailout has passed! This is the change we voted for! Or is it?
Long story short, the crisis really started when people got greedy. When housing prices in some parts of the country are increasing by 20 percent every year, when banks start including overly risky investments in their portfolios and lend money to people who shouldn't have been approved in the first place, the bottom is bound to fall out sometime. It was a hollow prosperity. As some have said, a house of cards that has finally collapsed.
Politically, the blame game ensues. Of course, it's Bush's fault. Some have begun to point fingers at Republican economic thought. In fact, there's plenty of blame to go around to both parties. More government and more regulation is the answer! This is a bad approach and a road we do not need to go down.
This brings us to the monstrosity known as the bailout. Frankly, the bailout legislation is ridiculous. The House version was a smorgasbord of pork and liberal programs that had nothing to do with stimulating the economy. The bill that we have now is a little better--but still ultimately harmful. Just like the New Deal did not pull us out of the Depression in the 30s, this legislation will not help us now. Of course, some roads will get built and a few people will get jobs, but it will not create sustained economic growth necessary to pull us out of the recession. Also, the massive deficit that it will grow will further multiply the national debt. This will have negative implications on inflation and the value of the dollar in times to come.
In my opinion, a smaller bailout is needed. This bailout should seek to give tax incentives to corporations to invest in new economic sectors, such as so-called green industries. Senate Republicans offered up an alternative bill that had a price tag of around $450 billion. That is about the right amount. Secondly, we are not in need of new regulations. The government needs to modernize the regulations we already have for the 21st century. While some regulations are needed, a government that over-regulates the economy stifles its productivity.
Long story short, the crisis really started when people got greedy. When housing prices in some parts of the country are increasing by 20 percent every year, when banks start including overly risky investments in their portfolios and lend money to people who shouldn't have been approved in the first place, the bottom is bound to fall out sometime. It was a hollow prosperity. As some have said, a house of cards that has finally collapsed.
Politically, the blame game ensues. Of course, it's Bush's fault. Some have begun to point fingers at Republican economic thought. In fact, there's plenty of blame to go around to both parties. More government and more regulation is the answer! This is a bad approach and a road we do not need to go down.
This brings us to the monstrosity known as the bailout. Frankly, the bailout legislation is ridiculous. The House version was a smorgasbord of pork and liberal programs that had nothing to do with stimulating the economy. The bill that we have now is a little better--but still ultimately harmful. Just like the New Deal did not pull us out of the Depression in the 30s, this legislation will not help us now. Of course, some roads will get built and a few people will get jobs, but it will not create sustained economic growth necessary to pull us out of the recession. Also, the massive deficit that it will grow will further multiply the national debt. This will have negative implications on inflation and the value of the dollar in times to come.
In my opinion, a smaller bailout is needed. This bailout should seek to give tax incentives to corporations to invest in new economic sectors, such as so-called green industries. Senate Republicans offered up an alternative bill that had a price tag of around $450 billion. That is about the right amount. Secondly, we are not in need of new regulations. The government needs to modernize the regulations we already have for the 21st century. While some regulations are needed, a government that over-regulates the economy stifles its productivity.
Viewing Comments 1 - 5 of 6
Andrew
posted 2/18/09 @ 10:39 PM EST
YES YES YES! If only this opinion was shared with more of our representatives in Washington. I'm right there with you Paul!
Andrew.
J
posted 2/20/09 @ 4:34 PM EST
I completely agree with this article. When they called it the "Land of the Free" they were not talking about handouts. Where is the pride that hard working Americans had in the past. (Continued…)
Mr. Jones
posted 2/20/09 @ 6:36 PM EST
I think the passage of the stimulus package goes to Obama's bold new charm offensive: terror. He is quoted as saying "We are going through the worst economic crisis since the Great Depression. (Continued…)
Sinjun
posted 2/20/09 @ 6:40 PM EST
meh i figure tax cuts weren't a bit priority to the democratic leadership since... most of them don't seem to pay taxes anyway.
Sinjun
posted 2/21/09 @ 10:40 PM EST
(not sure this will get in as a letter to the editor so posting it here too)
I write this in hopes that it might be published the East Carolinian, but it does contain a very serious topic. (Continued…)
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