Defenestrating Thoughts from the Bivouac

If there’s something that grows faster than the size of the bailout, I’d love to see it. Last week, I talked about an article that measured the bailout at $4.28 trillion. Today we learn that the number is almost double that, to a tune of $7.76 trillion!

Remember when Congress was considering the $700 billion bailout and we all called and clearly told them “No!” ? Well, so far, Washington has given away 10 times that amount.

Bloomberg has a nice interactive chart on which spending programs make up in this amount.

But even with a handy chart, it’s really hard to wrap one’s head around the scale of this bailout.

[$7,760,000,000,000 is] $24,000 for every man, woman and child in the country. It’s nine times what the U.S. has spent so far on wars in Iraq and Afghanistan, according to Congressional Budget Office figures. It could pay off more than half the country’s mortgages. (Source: Bloomberg)

That’s $52,000 per taxpayer. So Crissy and I have so far contributed $104,000. I’m fairly certain I could have found a more productive use for that money than bailing out the rich and throwing the rest down a giant hole.

I found this great blog post on visualizing the bailout amount that included this picture:

The green is a stack of $100 bills. And the speck at the bottom is a car.

And the stack of bills is only $315 billion. So the total bailout is 25 stacks like the one in the picture.

Lastly, consider the fact that the national debt is about $10.6 trillion.

Sadly, this is all being done by appointed officials; our vaulted Congress refuses to do its Constitutional responsibility to manage and oversee the money the government spends.

So why are we in this mess and how do we get out?

Well, the big problem here is that the government is refusing to let people fail, which causes us to spend trillions of dollars to bail Wall Street out of their mistakes.

This is not good for the country as we’re damaging the system. The system works because people fail and then competent people take over the assets. Now you start again with a strong base.

But what we’re doing is taking the assets from the competent and giving them to the incompetent. As a results everyone is weakened; the whole country is weakened. That’s the system that leads to failure, every time.

There’s an old adage that says, “Insanity is doing the same thing over and over again and expecting different results,” (attributed to Einstein, among others).

I would say that it’s not just insanity, it’s also stupidity, incompetence and a whole slew of negative adjectives.

More lending is not going to solve the problem of too much lending. Period. Bubbles cannot grow forever, they must pop.

It is not possible to get “credit flowing” by pushing down the price of money (through printing and low interest rates). All you end up doing is adding more bad credit in the economy. Which is, again, what got us into this mess in the first place.

Lastly, the only sustainable way to improve the economy is to drive up real wages with new technology and productivity improvements. Both of them will come from empowering the competitive, not by taxing them in favor of the incompetent.