George Bush initiated the largest taxpayer bailout of private businesses that the world has ever known. Obama seems determined to set his own record. His stimulus bill will waste more resouces in one single legislative action than any in world history.
Bush's bailouts have done no good. The financial sector is in worse shape than last Fall when all of the political hype began. The economy has been talked into a recession. Eventually, it will tire of the talk and work its way out. The bailouts and stimulus package will simply be very, very expensive impediments to future economic growth.
Some countries have taken the bailout/stimulus policies much further. Great Britain comes to mind. It is highly likely that Britain will be forced to default on its external debt within the next twelve months. Britain won't be alone.
No one seems to think that those who bet wrong should have to pay for their wrong bet. The stock and bondholders of Bear Stearns, Lehman Brothers, AIG, Fannie Mae, Freddie Mac, Merrill Lynch, Citigroup, Bank of America should pick up the tab....not the US taxpayer. All of these investors knew they were taking risk. It didn't work out. So, they should lose. Not the taxpayer.
Everyone always thinks that if their industry goes belly up, the whole world will come to an end. The financial industry thought so last fall, the auto industry thought so in December, and more and more will step forward to ask the average taxpayer to pay for mistakes that taxpayers did not make. Aside from the very, very foolish economics of the bailouts and stimulus packages, the specter of rewarding those who made bad decisions and punishing those who made good decisions is appalling.
The proper response is to let the chips fall where they may. If you want to stimulate the economy, lower tax rates and expand the monetary base. These policies have proven records. They work. Bailouts don't work. They never have worked and they never will work. Bush and Obama should have taken an economics course along the way.
