The bailout: Caused by a 'Bush'el of problems

By: Ron Quiroga

Posted: 10/14/08

As most Americans have found out, the economy has boiled over, and not in a good way. The ignoring the economic issue has reached the tipping point and is quickly spewing questions about the future of social security, retirement and most importantly for students, the availability of jobs. What started as a housing crisis has become a nationwide economic recession that, frankly, does not seem to have an end in the near future. Is there any way to put a stop to this imploding economy? Well, the people can only wait and see. But there is the question of what caused this monstrosity of an economic snowball, the answer being the negligence of the Bush administration to control the growing economy in the past eight years, and now the people are paying the price for it.

The current presidential administration is attempting to address the issue by giving a bottomless pit of money to the same companies that have buried the national economy, when they should be concerned with creating more jobs and getting the money back into the peoples' pockets. President Bush has become the quintessential "lame duck" as UConn Political Science Professor Lyle Scruggs said. The situation has grown to a point that the "bailout bill was to be passed because [the administration] was freaking out and something had to be done," Professor Scruggs said.

President Bush's approval ratings since September 2007 have not risen above 35 percent and according to Americanresearchgroup.com, 19 percent in September 2008. At that time, President Bush ranked among some of the most unpopular president to be in office and consequently has felt the pinch even from his own party. The voting of the initial bailout bill, which was a bipartisan bill, was originally rejected because of the lack of votes, but it is surprising that those votes needed to pass the bill were Republican ones.

For the last two presidential terms, Republicans have had a firm grip on the executive branch of the U.S. government, but now as it comes to an end, they are preparing to leave us with massive debt, busted credit and the possibility of exponentially increasing inflation. An open-market, laissez-fair economic agenda is what the nation has in place, but it is now obvious that some regulations need to be formulated in order to prevent these kinds of meltdowns.

History has shown us that, as a country grows, the government must be responsible for some part of the economy. The people must realize that reforms like temporary nationalization of bank assets are not the end of our capitalist economy and they must move away from the "socialist fears" that are beginning to plague the nation. The current administration failed to see the signs that banks had begun to lend to more and more to individuals who were unable to fulfill those payments. Thus eventually leading to a domino effect that had collapsed and bankrupted lending companies and banking corporations.

A perpetual cycle of economic self-destruction is what the U.S. will face in the light of a $700 billion bailout. The massive loan would bring up the governments' spending for 2008 over $1 tillion. This again is not being helped out by the daily, billion-dollar price-tag of a war half a world away. Questions continue to arise about why this has suddenly occurred, but if one looks at the details, it suddenly becomes very clear. Any nation who spreads itself so thinly economically, and fails to manage its economic growth will inevitably inundate themselves in debt.

This tremendous crisis can not be placed solely on the shoulders of the national banks. It is also the fault of those who initially signed away their lives to loans that they knowingly could not effectively pay off. The ambitious upper-middle classes aimed too high, lived above their means and consequently, fell just short of what they could afford, and are now paying the price for it, or will in the near future. It is obvious, though, that the nation is in danger of a recession and the answer to economic problems is not to reward those who placed us in the current situation.