Do We Need 700 Billion Bailout?
Article by Martin Lukac
Some people cheered today, some didn’t. Many taxpayers saw today’s decision as no more debt added to our economy. Yeah, hard time will come in the future, but who knows economy will bounce back somehow. That was what is written all over the web on many blogs and articles.
So who didn’t cheer today? Who else, Wall Street and rich people as they saw their income and investments plummet. But why didn’t cheer isn’t just because of them being selfish with money, it is also because this affects everyone.
Not many people realize that if your bank cannot longer lend money, you cannot qualify for car loan, student loan, business loan or almost any kind of loan. The credit market will be frozen and banks will not lend money any more. And we will be in a deep recession that who knows how long it will take time to get out. Banks will be scared to lend money, what if borrower does not repay, we cannot afford more debt as it is now.
The most important is how we got here at the first place and yes everyone blames banks and their “special loan programs” such as interest only loans and adjustable rate loans. But these loans were made by banks to help homeowners to get that house they wanted. Banks never pushed you to get these loans, remember you as a taxpayer were the one signing the paper that you want this loan. Education was missing how these programs worked and now many people simply could not afford to repay their mortgages. So therefore, banks went down, bankrupt.
Or look at it from perspective of your business or even your boss. What if your boss needs financing to continue daily operations or your boss needs money to make payroll and he or she cannot qualify for a loan. What happens than? You lost your job. Economy will suffer because of this.
Even we will have more debt, and yes many will disagree that no more bailout, our economy strives on credit and that is what is missing right now. The credit has been frozen and banks do not want to release any more capital. It will slowly start to affect everyone that has loans and mortgages to future homeowners who cannot qualify for loans.
But many people do argue that they do not want to cover someone else’s mistakes just because Wall Street screwed up. They do not want to be paying that huge debt in the future that even their kids will be stuck with it. Situation is difficult as of right now, and problem is that we are in this situation today, this minute, this second. We cannot wait any longer before economy goes to deep recession. We have to act now even though a huge billion dollar debt will be added. But however, this allows credit markets to open up, start lending money and keep economy going so you can keep your job and get that loan for your car, education or even business.
Remember, if this bailout is not approved, your investments, 401K or any other investments you have will go down. Your hard earned money will disappear slowly and it will take years before your 401K and maybe even stock market will gain the strength it used to have. Everyone will loose and unfortunately, the bailout is needed to keep things going.
Or would you rather not have bailout and see what happens? This is your future and your decision.
About the Author
Martin Lukac represents RateTake Refinance RateTake matches consumers with mutiple lenders offering low mortgage rate quotes. For more information please visit Do we need 700 Million Bailout?