Help! Bailout! Or Not. . .

To help the struggling stock market President Bush proposed a 700 billion dollar bailout plan. The government would inject lots of money into the market, buy the sub-prime loans that aren't really worth anything at the moment (but could be worth more in 20 or 30 years), and basically try to make sure the market didn't crash. It didn't work. The House of Representatives voted it out. Actually it was the House Republicans who didn't vote for the bailout. Bush, McCain, both party leaders in the house, and Obama were all supporting the bill, but all of the house is up for re-election in five weeks and the bailout is very controversial. If a house member seeking re-election or trying to move to the senate voted for the bill, their opponents would definitely use it against them in the election.

I'm not sure how I felt about the bailout. If the bailout happened the stock market would be a little more stable at least in the short term and there wouldn't be a sudden loss of jobs, loans, and stuff like that, but the bailout would be payed for in taxpayer money so taxes could go way up. However, the bailout was necessary because there is a lot of artificial value in the market right now and if the government bought the worthless mortgages that are giving the companies so much trouble, the government would be continuing to pay for things that weren't really worth all that much and the artificial value crisis would go on.
If there was no bailout, the stock market would crash (like it just did), people will loose jobs because companies don't have as much money so the cut back, it will be harder to get loans of any type, and all sorts of other things. But taxpayers wouldn't have to pay to rescue all the rich CEOs on Wall Street and once the market rebounded (it probably will eventually, sometime in the future) there would be no more artificial value of sub-prime mortgages.

I really didn't know what to think about the bailout. On one hand, I didn't like it because it seemed like it would give money to some already rich guys and make normal people pay for it. However, if there was no bailout there would be the job losses and stuff like that. It would be good to get rid of the artificial value in the market but getting rid of value, artificial or not, would mean that the market would go down. It seems like a very hard choice to make and I don't envy the politicians at all.

The house is meeting again on Thursday to talk about this again. People for the bailout will try and convince the other people to vote for it when they do a second vote. People against the bailout will try and convince their counter parts to join them. I'm sure all of them will have hard choice to make and there will be a lot of yelling and barbed speeches. I, however, am very glad I am not a member of congress. Hopefully I will get better at deciding about these hard issues by the time I can vote but for now, I have no idea what the best path would be.