Friday, December 05, 2008

Reader's Choice #2: Where's MY Bailout?!

Blog reader Randy Carter asks, "If the government plans to bail out banks that I have a credit card with using my tax money, why should I pay my bill?" This is the sort of understandable sentiment that inspired such websites as and others. I'll use this as a general way of discussing the inequality of who it's politically acceptable to bail out.

First, the numbers. According to one estimate, "the total of promised government outlays and guarantees [rose to] a staggering $7.7 trillion" after Citigroup was saved by the feds. That's a lot of money, and it'll be a lot more very soon. And this comes the same week we get a report from the group in charge of overseeing the bailout stating that "the government still does not seem to have a coherent strategy for easing the financial crisis, despite the billions it has already spent in that effort."

(Henry Paulson's latest brilliant scheme? Reinflate the housing bubble. Genius!)

Compare the no-strings attached ease with which that money was thrown around to the huge, and justified, hoops the auto execs are being forced to jump through to get their money. The difference is, despite conservative rhetoric about the all-powerful unions, the titans of Wall Street yield far greater political power than the middle class factory workers of Detroit. Not to go all Michael Moore here, but a truism of post-Vietnam American politics is that the rich get priority over the poor.

The financial sector destroying the economy by assuming that playing a game of Capitalist Jenga was sound policy? Throwing money at this problem until it goes away is priority #1. But the fact the recession caused by that means Randy Carter and others is behind on their bills? He'll sort that out on his own.

(And considering the trillions thrown into this mess, how insane is it to remember that President Bush vetoed the $35 billion increase for children's health insurance last year-- amidst other fights, like on the minimum wage-- for being too fiscally irresponsible?!!)

So in conclusion Randy, in a fair world, no you shouldn't have to pay off your Citibank credit card for now. But unless you want to become a deadbeat with a bad credit rating in the real world, you'd better starting writing another check.

Or we could all start living within our means, but how boring would that be?

[Related reading: Left Out of the Bailout: The Poor (Time)]


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