There Is No Quick Fix

from the September 30, 2008 eNews issue

If you've turned on a television, read a newspaper, or gotten anywhere near the office watercooler in the last couple of days then you no doubt know all about the turmoil on Wall Street and in our nation's capital. The United States is currently in a state of economic uncertainty. Our current predicament is the result of years of bad economic policies, out-of-control spending, lax accountability, and greedy and irresponsible behavior. The 700 billion dollar bailout bill was defeated in the House of Representatives on Monday. The result of the vote had a dramatic impact on Wall Street and has left lawmakers in Washington scrambling to find an alternative.

The outcome of the vote caused panic on Wall Street. On Monday the market experienced its worst day since the 1987 crash, worse even than the day following the September 11 attacks. The S&P 500 plunged almost 9 percent and the Dow Jones industrial average fell nearly 778 points. The sell-off resulted in the loss of more than 1.2 trillion dollars from the US stock market.

The economic troubles we now face did not happen overnight, and they will not be fixed overnight. However that is exactly what Congress and the President are trying to do. Our elected leaders in Washington are currently attempting to pass far-reaching economic legislation without taking the time to consider the long-term consequences. Congress is rushing to make a decision in just a few days on an issue that could impact us for decades to come.

Congress is considering giving the treasury department a blank check and the power to buy up almost a trillion dollars in "toxic debts" from financial institutions at above market prices. The plan has received mixed reactions. Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson claim that if Congress does not take action now the economy may go into a deep recession. Others say that the American taxpayers shouldn't be expected to bailout irresponsible lenders to the detriment of future generations.

Some bankers, market analysts and prominent public figures have suggested what they believe is a more common sense solution to the current economic crisis - one that won't cost US taxpayers almost a trillion dollars. Various individuals, including former House Speaker Newt Gingrich and financial talk-radio host Dave Ramsey, have suggested relaxing mark-to-market accounting rules, abolishing the capital gains tax, and extending insurance in order to free up the market and allow it recover on its own over time. This alternative solution could work, but Congress still seems intent on getting us even further into debt.

Congress needs to slow down and think about the consequences of its actions. Acting in haste could have disastrous results. To learn more about this topic, click on the links below.