dippin

Oh, I do believe that the bail out deserves true debate.

What I don't believe is that you will get true debate at these "tea parties."

First of all, several of the sponsoring organizations maliciously conflate the stimulus bill with the bailout.

Second, and most importantly, the discourse never moves beyond faux outrage.

I disagree with the plan to save the banks as currently designed, but let's see the alternatives being proposed to the bailout:

- let them fail, don't use our money to bail them out... ok, that is fair, except... When a bank fails, the FDIC moves in, uses "our" money to pay the deposits that are ensured, breaks up the banks, sells off the parts that are profitable and liquidates the ones that are not. So basically "letting them fail" also requires paying off the deposits with "our money." What would happen, and this is unequivocal, is that the recession would be significantly deeper (although some people argue that it would be also shorter). People with accounts in the troubled banks would probably lose access to their money for a while, and would then only recoup what was insured later on, people and business who were owed by these banks would never see the money again, and people who relied on them for credit would have to set up arrangements with other banks. They would most likely take other banks and business with them, especially small business.


- Do what Obama and Bush have done, which is giving them money to try to boost value of troubled assets and make them solvent again. It uses "our money," but if works, the treasury stands to make a profit off of it. But if it doesn't work, it was basically a transfer of money from tax payers to people who own the stocks of those banks.


- Nationalize banks temporarily, make them solvent, resell them. It uses "our money" to make a bank solvent, but the treasury can make quite a bit of money. This avoids the problem of the Obama plan of being a transfer to stock holders: the banks are bought at their current, worthless values and propped up.


You see, ANY way you deal with it, tax payers end up paying part of the bill. That is the dishonesty of the organizations backing the tea parties. So there is brainwashing going on alright, but it certainly includes the tea party organizations.

Now, can an argument be made with regards to just "letting them fail?" Sure, and people have tried to make it by saying that the recession would be deeper but at least it would be shorter. I don't agree with this particular perspective, but at least its an honest one.

Being against the "bail out" because you don't want "our money" being use to salvage banks? Sorry, but that is simply not possible, unless you dissolve the FDIC and basically give the finger to anyone with a bank account. In fact, the "let them fail" approach is the only one where the tax payer has no shot at making some of the money back.