[ExI] The bailout

[Samantha Atkins]

On Sep 29, 2008, at 3:38 PM, John K Clark wrote:

> I see that the House has rejected the 700 billion bailout of Wall
> Street.

WOO HOO!  Some measure of sense prevails after all.

> But clearly something must be done and done damn quick to  
> outmaneuver disaster, and this is no time to be paralyzed by dogma  
> even if that dogma happens to be true.

If it it true then it is pointless to call it dogma.  Real problems  
cannot be maximally addressed by ignoring what is and isn't true to be  
the best of our ability to ascertain it.

> I was wondering about an alternative idea that I've had, a massive  
> 700 billion tax cut with 90% aimed at the middle class.

By my "dogma", that is my attempt to map reality reasonably and  
handily succinctly, that would be a much better action to improve and  
economy.  However, unless massive government spending cuts were made  
the government's standard activities would result in massively more  
debt.  There is no improving the economy without greatly reducing the  
massive sucking of wealth by the government.  Both government and the  
people cannot continue to consume much more than they produce.  Money  
cannot be continuously printed and injected and interest manipulated  
without creating more bubbles and lowering the value of the  
currency.   The long put off correction of the error of our ways must  
be undertaken and the sooner the better.  It will not be easy.  But  
the alternative is the end of US economic power.   The problem will  
only increase by putting the correction off and the economy will  
oscillate ever more dangerously until the damage is effectively  
irreparable.

> Realistically you've got to let corporations have at least 10% if  
> you actually expect the idea to get passed by the congress. I'd be  
> interested to know if any of you economic wonks think that
> idea would pass the mustard. It may not, it may be too slow,
> I'm just asking.

The "corporations", that is business generally, is much more crucial  
than just people having a lot more to spend.  In actually you are  
talking about approximately $5000 per working person.  Than is all too  
easy to blow meaninglessly as far as creating a healthier economy is  
concerned. Remember that we don't make all that much in the US any  
more.  So in practice the lion's share of such a sum would be likely  
to go offshore.

- samantha