Is the US bailout the largest heist in world history?

I'm baffled by the American reaction to a proposal to buy 5% of the country's entire GDP worth of privately held debt, drive the national debt to over ten trillion dollars -- that's $10^13, or about $1560 for every person on the planet -- and not help a single person that actually needs the help in the process.

With the US deficit already running at half a trillion dollars per year under Conservative-style mismanagement, this move will drive that number up dramatically. With Canada's GDP being about $1.3 trillion, the US deficit this year could well equal 100% of Canada's GDP. Anyone who claims at this point that who is in charge of the government has no bearing on the state of the economy needs to take a good long, hard look in the mirror.

While injecting $700 billion (plus or minus $700 billion) into the economy sounds great, one has to wonder where it will come from, and where it will go to. Near as I can tell, it will come from the people across the country who have lost their homes, and go to the people who took them. But don't worry: the trickle-down effect will save the economy!

Canada has gone from boom to bust in just two years of Conservative government, with only Alberta's oil boom keeping Canada out of a textbook recession. Just a month after taking office, CMHC under Conservative guidance started permitting longer mortgages that would drive Canadians deeper into debt. That has changed very recently, but it shows the mentality currently at the top in this country.

Posted at 09:02 on September 26, 2008

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Mound of Sound writes at Fri Sep 26 13:13:42 EDT 2008...

You've got the fundamentals wrong. The trillion dollars will come from the same place America gets the half-trillion a year to float its deficit, foreign wars and tax cuts for the rich. It'll come from foreign lenders after Washington pledges the credit of future generations of wage-earner taxpayers. The US debt is expected to swell to 11.3 trillion when this is over. What remains to be seen is whether Washington can come up with a bail out plan that will calm the nerves of these foreign lenders. If not the bailout loans may come with an interest penalty and, worse, those lenders may start demanding a shift from US dollars to, say, Euros. Either one of those could enormously worsen this credit crunch.

Gone Fishing writes at Sun Oct 5 13:39:21 EDT 2008...

You are absolutely right, it does matter who is in charge. In this case the U.S. congress denied the president's call to action about the high risk loand being underwritten by Fannie Mae and Freddie Mac. These democrats refused pleas from George Bush for government intervention and regulation and Billy Clinton and Jimmie carter were the ones that opened the purse strings for an outrageous liberal spending plan on housing