Just say no! Stop the borrowing!

Act I
It seems widely accepted that we are in this financial mess for 3 reasons: One, we allowed people to borrow money that they could not pay back to buy houses that they could not afford. Two, house prices had become inflated because anybody could borrow all the money they wanted, credit worthy or not. Three, we allowed wild speculation in the financial market with the creation of financial instruments that nobody understood or regulated. "Credit Default Swap" The very name should have raised regulators eyebrows. Trading bad debt for bad debt is good business somehow? I think most high school students would have questioned that one!

Act II
The government told us that if we did not spend $700,000,000,000 right now (not next week), that the world as we know it would end. Total financial melt down. No one would be able borrow money, we would all lose our jobs, we would all be eating out of garbage cans, if we could find one.

Act III
90 days later, $350 billion spent by TARP, and additional trillions of dollars pumped into banks, mortgage house, and insurance companies by the Federal Reserve. (the Fed can spend all they want with NO approval so I am not sure why we needed TARP's $700 Billion) You still can't borrow money, big bonuses are still being paid to the people who blew the deal in the first place. Unemployment is 7%!

ACT IV
In comes the new president and says please release the other $350 billion so that I can make things better, and save our citizens. I know how to spend it "wisely", and we will keep a ledger of where we spent it so we will be accountable. What!

Act V
Who actually got the money? I didn't get any of it, and I am sure that you did not either. But somebody had to have gotten it right? Our 401K got killed, my wife who worked for 35 years is likely to lose her pension and insurance benefits. Our political leaders now call that a "legacy cost" that must be abandoned by the automakers for them to survive. Beware of ever being branded as a "legacy cost". Once that occurs you are no longer a human being. It is much easier to cast aside a legacy cost than a human being.

Act VI
50 years in the future- Our children and grandchildren are still trying to pay off the debt we left them. Their standard of living is not close to what ours is because their tax burden to pay off this debt is huge.

The question is: If this mess was caused by excessive borrowing by un-credit worthy people, how can an un-credit worthy government (we the people) borrow our way back into propriety?

The answer is simple, and every body knows it in their heart of hearts - - -you can't. We just don't like the answer so we turn our heads and let it continue.

Albert Einstein gave the following definition: Insanity- doing the same thing over and over again and expecting different results.

Einstein was no economist, but I think all the economist have already left the building!