Tag: bailout

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Common Sense

Higher Ed Jubilee?

Student loans, bailout, bail out, loans, jubilee, banks, subsidies

“Everything is beautiful in its own way,” goes Ray Stevens’s hit song of 1970. But still, pay your bills. 

That’s what I thought reading a Fox Business story on a recent poll in which 42 percent of Americans, a plurality, thought that “President Trump’s administration should forgive all federal student debt in order to help stimulate the economy.”

Roughly 37 percent disagree, at least. Twenty-​one percent were undecided. 

For starters, justifying a huge financial giveaway to some citizens at the expense of other citizens as a way to help “stimulate the economy”? A sad commentary on the state of civic discussion.

Of course, this particular voter survey may have been concocted as nothing more than some capitalist PR plot by MoneyTips​.com. Still, the numbers are believable, and with total student debt reaching $1.3 trillion — owed by some 44 million Americans — the subject is certain to come up again. 

Let’s not forget, Bernie Sanders declared it a sin against public policy that Americans were not provided a free university-​level education. I can hear his future oration, “We bailed out the banks for the one-​percent. We can bail out the students!” 

It should be a popular position on college campuses, cui bono and all.

“Drilling into the data, we found millennials (18 – 29) were especially passionate about student loan debt forgiveness, strongly agreeing with the idea nearly twice as much as those 50 and older,” confirmed MoneyTips co-​founder Michael Dubrow. “Even if older people are still paying off their loans, younger people paid more and borrowed more for higher education.”

This sounds like a good reason to cut current subsidies, not increase them.

No. More. Bailouts.

This is Common Sense. I’m Paul Jacob.

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folly free trade & free markets meme moral hazard national politics & policies too much government

Why government is (almost) never the solution…

big government, solutions, toxic assets, bank bailout, meme, illustration, Jim Gill, Paul Jacob, Common Sense

When you systematically reward failure, incompetence and irresponsibility…what results should you expect?

Bank Bailout

QE — Toxic Asset Government Purchases

Moral Hazard

Click below to get a high resolution version of this image:

big government, solutions, toxic assets, bank bailout, meme, illustration, Jim Gill, Paul Jacob, Common Sense

 

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free trade & free markets national politics & policies

Our Fairy-​Tale Economy

Everybody seems to hanker to get something for nothing. Because of that universal desire, and our inability to satisfy it, we have all these fairy tales about the tragic costs of magic.

Yes, the cost of something-​for-​nothing can be shockingly high. In some savvy tales, audacious hopefuls wind up giving away first-​born children to pay for their something-for-nothing.

For half a year, our leaders have gone on a something-​for-​nothing binge, throwing money at a downturned economy. Lots of money. Trillions.

Where does it come from?

Magic?

Not exactly. Politicians and financiers use complicated tricky maneuvers to gain money they don’t have. 

With the help of the Federal Reserve, they can sorta create money. But that creation has costs. It makes the money less valuable. We don’t always see this right away. Right now people are switching away from spending, so a lot of new money goes into savings. When people start spending again, though, prices will rise and money’s value will plunge. Gold into lead.

Politicians also get money by borrowing. But that also comes at a cost: It must be paid back. Here, politicians play an old fairy tale game, not exactly giving up their first-​born, but saddling our children and grandchildren with debt. It’s a mean, wicked stepmother kind of policy.

Maybe we should be reading more fairy tales these days. For the realism.

This is Common Sense. I’m Paul Jacob.

Categories
national politics & policies too much government

Bailing Out of the Bailout

Freedom lovers would like to bail out of Washington’s endless bailout … that is, the government takeover of the economy.

The big spenders often won’t even debate the matter. Radio talker Rush Limbaugh is catching flak for saying he doesn’t want President Obama’s scheme to “work,” which sounds goofy until you realize that many of Limbaugh’s critics, including the White House, carefully ignore Limbaugh’s point. Economic upturn, great. Permanent loss of our freedom and permanent expansion of government, not great.

GOP congressmen aren’t exactly the most credible messengers when it comes to opposing massive new spending and intervention in the economy. But I’d rather see them repent and fight than repent and slink away in embarrassment.

Some Republican congressman are indeed fighting the good fight. And some of the nation’s GOP governors are too. Louisiana’s Bobby Jindal just turned down $100 million in bailout funds that he argues would result in permanently higher taxes for Louisiana businesses.

In a message distributed by Townhall, South Carolina Governor Mark Sanford notes that the trillion or more dollars “in so-​called ‘stimulus’ money … is really little more than a social policy wish  list of the Left.”

We live in dangerous and interesting times. The only wish list worth pushing, now, is establishing the economic ground rules — and Constitutional principles — that should have been guiding us all along.

This is Common Sense. I’m Paul Jacob.

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Accountability free trade & free markets too much government

Able to Raise Keynes

Recently on This American Life, economists told NPR listeners how the then-​upcoming stimulus bill would amount to the very first legitimate and full test ever of Keynesian ideas.

Sure, politicians have been using John Maynard Keynes’s notions as an excuse to deficit spend ever since the Great Depression. But then, Lord Keynes had wanted politicians to spend even more, more than they dared.

Now, President Obama and our Democratic Congress have decided to spend enough billions, or trillions, to really do the trick.

Switch to Larry King’s latest interview with Bill Clinton. Our former prez assured us that the stimulus bill “would do what it is supposed to,” and he mentioned three things, only one of them vaguely about stimulus. He said the bill was better seen as a “bridge over troubled waters.” 

Clinton said the real issue was declining asset values, which Congress would address later.

At Mises​.org, Stephan Kinsella asked how this could amount to Keynesianism. Clinton used a different lingo entirely. 

Here’s how: It’s not that the bill will give us Keynesian stimulus. It’s that it has stimulated politicians in the old, old Keynesian way. 

Congressional Democrats know that the stimulus won’t work. So they are preparing the spin now. From them we heard the official excuse for the bill. From Clinton, the future excuse. 

Politicians know zip about the economy. They just know how to spend our money. And our great, great, great grandchildren’s.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets government transparency

Keep Bailing?

Not too happy about the $700 billion financial bailout or billions more for the Big Three automakers? Don’t worry, that’s just peanuts!

The overall government “bailout” is quite a bit larger — as in ten times larger. The federal government — in other words, you and me (and our rulers) — is ready to provide more than $7.7 trillion to bailout whoever might need to be bailed out.

This includes $3.2 trillion already taken from the Federal Reserve by financial institutions. And it also includes money from the Federal Deposit Insurance Corporation and Federal Housing Administration mortgage guarantees.

The total amount of $7.7 trillion is equivalent to half our yearly gross national product. So, should families, when they get in financial trouble, borrow and spend half their yearly income? No, I think this is one of those “don’t try this at home” type deals.

When Congress approved the legislation for $700 billion to establish the Troubled Asset Relief Program (TARP), there was talk of the need for transparency. But there has been precious little transparency for all this other money spewing forth from the Federal Reserve and various government entities.

Paul Kasriel, chief economist at Chicago-​based Northern Trust Corp. says, “given that the Fed is taking on a huge amount of credit risk now, it would seem to me as a taxpayer there should be more transparency.”

Yes, how about a smidgen of transparency? Or better yet, an end to all these bailouts.

This is Common Sense. I’m Paul Jacob.