This economic crisis seems complicated, but the big picture’s really not. It’s really just America maxing out its credit and going bankrupt, isn’t it?
I don’t think there’s any way out of this. I imagine it stems from the fact that 90 percent of people (or so) haven’t seen their incomes rise in the last 10 years, but we’ve been pushed to spend as usual, to prop up the economy. So we kept spending and spending until the bills started coming due, and then it was, whoops, we can’t pay it. Because we haven’t gotten a raise in 10 years.
So now we’ve basically spent all our future earnings for the next 10 years, and we’re going to have to relearn how to live without credit, because I don’t think it’s coming back. It’s going to be a long, slow climb back into solvency, and by the time we get there America might not be the most powerful country in the world anymore.
As far as the bailout plan goes, it doesn’t sound like a great idea. I mean, how is buying up all the bad debt, and letting those companies going with business as usual while taxpayers drown, how is that any better than taking over the failing banks and selling off their assets? People keep talking about how the alternative is “apocalyptic.” Maybe so, but I need to have what this apocalypse could look like. In what way would it be an apocalypse for people outside of Wall Street? Would it be anarchy, blood in the streets? Or just blood on Wall Street and a long recession? I don’t see us getting out of the long recession part of the deal.
I wonder what would have happened if Al Gore had won those 537 votes. Would we still be staring at the next Great Depression? Maybe there would have been a problem with the mortgage industry. But we might have acted sooner to regulate the market, we might have gotten better wages for the middle class so they wouldn’t have to use their houses as their ATMs, and we might not have piled on massive debt on top of whatever we’ll take on as a result of this disaster.
It’s amazing how quickly you can run a country into the ground if you really set your mind to it.
oldgreedy. 
September 28, 2008 at 4:06 am
The outcome in an alternate universe with Al Gore as President depends upon how long you believe this crisis had been building up. Income for wage-earners has been stagnant for much longer that 8 years, and I’m not sure Al would have had the economic credibility to challenge Greenspan’s expansionary instincts at the Fed (if you believe that contributed to the bubble). If the massive debt on our national credit card is the cause of this, then the problem has been building up for decades under the watch of Repubs and Dems alike.
We’ll see where this deal ends up after Congress gets done pushing back. As a taxpayer, I want some equity in exchange for these loans. The U.S. Government actually made a profit on the emergency loans it authorized in response the Great Depression and the S&L crisis.
Actually, I want the option to refinance my own substantial debts using government money on a pay-it-back-if-I-can-manage basis. Or, is it too late to set up a failed bank?
September 29, 2008 at 3:56 am
Hmm…I question your suggestion that incomes have been stagnant for much more than 8 years–this guy’s chart seems to indicate that they rose pretty well under Clinton, though not under the Bushes or Reagan. Similarly, the deficit has grown under Republicans and decreased under Democrats, at least Clinton. I’m sure Obama won’t be able to balance the budget in his first years either, but it’s asking a lot to completely reverse all of your predecessor’s policies on a dime.
September 29, 2008 at 8:27 am
I don’t think it’s as simple as “America maxing out its credit and going bankrupt”, but I do think it’s related to that.
We’re far from blameless, but are we to blame? Who are we? What the hell is a Republican administration if not what we asked for? I wonder how close to the Prisoner’s Dilemma the roots of this issue are. We’re all gonna get those 5 points, no-one else’d wanna rat us out, would they? Shit, we’re US, they wouldn’t rat US out, would they? Nahh. I choose tattle, and I thank God for the goodness and competency of my fellow man.