The negotiations going on for the $700 Billion bailout of financial institutions is fascinating. There is a lot of tension and the extremely important nature of these talks is showing some of the basic tendencies of both parties that are amazing. To illustrate, please note:
Democrats:
- The party has appeared to be in favor of the bailout with some additions
- Democrats are very willing to use government dollars to solve virtually any concern that has arisen with this mortgage crisis as long as they can control those involved after it is solved
- With the use of the government money, they will insist on more government control in the form of agencies; commissions; rules; new laws; and much higher taxes and fees
- Not only do they want to purchase high risk mortgages but their plan could include helping local banks, credit unions and thrifts making the $700 billion seem like pocket change
- Individuals who have stopped paying their mortgages may get some help if the Democrats get their way
- Democrats favored relaxed mortgage rules so virtually everyone could own a home. This is a major reason for the large number of problem mortgages.
- They do not want individuals to go into bankruptcy but want the government or the lending institution to step in and foot the bill for individual bad decisions
- They want corporations to pay much higher taxes, not seeming to realize that the corporations are publicly held and any increased cost will only increase the cost of the product to the public or decrease employment
- They always see the need to raise taxes which usually slows the economy
Republicans:
- The most conservative members of the party are against the bailout in any shape or form. They believe if the company or an individual makes a bad decision, the company or the individual should pay the consequences.
- They do not look beyond the companies failing to see the destruction this would have on the general population
- The party does not like the government becoming involved in the corporate world because it looks like socialism sneaking into the country's framework. This fear is not rational since the actual proposal by the Secretary of Treasury is to buy securities from the institutions and then sell them at a later time or let them mature. The proposal was not to buy the companies in trouble but to buy some of the troubled assets.
- They do not like the government deficits so the prospect of adding $700 billion to the current level of debt is very hard to swallow. The initial proposal was to use government dollars to buy financial securities not to simply spend the $700 billion.
- They do not like any government control of corporations, not realizing that corporations are run by humans who are sometimes willing to lie, cheat and generally be dishonest to obtain more wealth. The lack of adequate control is partially why so many mortgages were not rated properly and why so many mortgages were given to unqualified individuals.
- They have always fought to lower taxes in order to stimulate growth. The problem has been that they have increased the size of government like the Democrats like to do. As a result the deficit usually increases.
If only the two would work together for the good of the country. Of course with the vast difference in prospective, it is almost impossible to reach full agreement on anything. They both need to be more flexible, and to avoid always having to have their way. In many respects, our national political scene has become like two siblings that are completely opposite, trying to get along in the same household. Pity the parents. Unfortunately, we the common folk have to pick up after these rascals and live with their actions.
