It has also permitted them to launch another spectacularly large heist. They got away with the 2008 bailouts. All they learned from it was that they could get away with gambling big. If they win, they keep the winnings. If they lose, they socialize the costs and we all pay. Why change your behavior if those are the consequences? The cost of any irresponsible over-leveraging will fall on the republic as a whole, not the ones who got greedy. People who are desperate now will lunge for the money, but let's look at the numbers.
A whopping two trillion dollar stimulus bill has already been passed. Another four trillion dollar bill is on deck. That's six trillion dollars. There are probably about three hundred million legal U.S. citizens in the United States. So what the "Stimulus Plan" proposes to do is to borrow about $20,000 against, on average, the credit of every man, woman, and child citizen of the United States. There are five in my household, of whom three are children and I am the only breadwinner. So they plan to borrow $100,000 as my family's share and give it to who?
They propose to give $1,200 of the $20,000 back to the citizens, the people whose credit is being drawn upon. What about the other $18,900? It is mostly going to go back to the same people who got bailed out one way or another in the 2008 and on bailouts. They are, with a loud flourish, giving you a small amount of money with one hand while they are maxing your credit card out with the other!
Some people will do better than that. Some portion of that money will be made available to businesses in the form of a loan, which will become a grant if "most" of it goes to keep making payrolls. That is going to help some of us, at the expense of others. Why does FEDGOV have the right to make that call? In the case of small businesses, the most probably outcome is that the family members on the payroll will be kept, the rest laid off, and the balance of the money will go into the coffers of the business. Let's say the figure that turns it from a "loan" into a "grant" is that 70% goes to payroll. So Wal-Mart can pay the high-salary execs and a skeleton crew to run the stores and pocked 30% of the money. Who wants to tell me why my three small children should have to incur $60,000 of new federal debt so that can happen?
The fact is that in lean times businesses that failed to provide a cushion go under. Other businesses which were more prudent survive those times and expand to meet those needs, or someone else comes along and they get an opportunity to start a new enterprise which fills that need. This is the free market approach, but those running things don't believe in the free market. They believe that those on top should stay on top no matter what. That's why they are borrowing against everyone's credit to benefit the few. In 2008 it was the top one percent of the top one percent. This time it is mostly still them, but in order to avoid a riot they are giving the top 10%-15% a chance for a small cut, and throwing scraps to the rest of us.
This is a terminally corrupt system borrowing against the future to buy it a little more time. The more time it buys in this manner, the worse the pain of the inevitable consequences will be. The sooner we can figure that out the less drawn-out the pain of correction will be. We can start seeking sustainable answers in economics and government, built on justice and equity instead of "do whatever it takes to keep the party going until after the next election".
The temptation to do this will be too great for any politician to resist. The only way to stop the looting is to rebuild with a system so decentralized that the Central government does not have the ability to abuse the credit of the citizens in this fashion. That's localism.
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