President Bush's $700 billion bailout should worry us all. It gave me nightmares. Now, I don't profess to be an expert in fiscal policy, but even a layman like me can see warning signs.

First, we must realize the money for the bailout doesn't exist. We're borrowing it. It's the same type of fiscal recklessness funding the Iraq War. The cost is epic. The bailout will translate to about $3000 per person in this county. This includes every man, woman, non wage-earning teen, child and newborn infant. That infant, by the way, will also help shoulder the burden.

Second, the bulk of the trouble is unsound mortgages. They are individuals who purchased a home for two or three times its real value, paying a tiny short-term introductory payment. Now that the period is ending, defaulting is inevitable. Foreclosure is a "repentance" tool for unwise home buyers. Instead of paying awfully large payments on a bloated loan, they can simply walk away. The buyer trades forgiveness for a penalty on their credit score. The lender keeps the house, but takes a loss for accepting a risky loan. It seems cruel, but it's a very fair system.

Third, the bailout sends investors the wrong message. It rewards risk-takers without holding them accountable for their choices. Prudent investors are penalized with higher taxes or inflations.

The only sensible solution is allowing the market to ride out the storm. It's comparable to driving a 30-year-old economy car. As everything falls apart, sometimes it's better to start fresh than throw money at an old problem.

Instead, why can't we spend the money re-investing in our nation? I can only imagine what a trillion dollars would buy us! States could finally build all their pet projects: more masstransit, new schools and college campuses. We could replace our unsafe bridges and provide free wireless Internet to whole cities.

But our leaders tell us there isn't enough money for any of these projects. But we can afford to buy toxic paper?

The bailout package shows a lack of backbone on the president's behalf to stand up to Wall Street lobbyists. It seems all they have to do is poke the president and he throws cash in their general direction. It's a shattering, expensive crescendo to a disappointing second term in office.

Personally, I could use a bailout. After all, winter semester tuition is due soon. Maybe I can should grab a broom handle and poke our commander in chief, too.



Copyright Brigham Young University 13 Oct 2008