Monday, November 24, 2008

Bail Out?


To bail out or not to bail out. That is the question. The big three are in big trouble!Recently they came to Congress, hat in hand, asking for money to get them by. I have been against all of these bail outs from the get go. Decisions have consequenses. Or at least, they used to. Bought a house you can't afford, no problem the government will bail you out! Decided to have 70-80% of your profits derived from large suvs and never anticipate the need to diversify your profit base? Didn't buy a house because you knew you couldn't afford it? Sucks to be you!.No problem the government will bail you out. Make risky no doc(aka liar loans) to people who didn't have the money to pay for them? No problem the government will bail you out. Didn't buy a house because you knew you couldn't afford it? Sucks to be you! Bought a house you could afford to pay for using a conventional loan? Sucks to be you! You're going to bail out all of the above!

While I am against all of these bail outs, it is hard to justify bailing out wall street, and then turn around and deny the big three any help. Personally I do not think the near 75 billion they are asking for will do much more than delay the inevitable. I predict that within 3-5 years one of the big three will be gone regardless of how much money the government gives them.

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