Close your eyes and listen....relaxed? Now ask yourself what happens when government has to fix a policy or a law? Many wonderful pictures of a giddy lawmaker rushes through your head and you can picture him getting passed by congress and signed by the president. And you think to yourself what a lovely picture....
But then really think what government does when they do this... The answer we have learned about in Eubank's class is that government intervenes. So lets say for example that there was a failure of governmental policy where the Fed backs up many loans from institutions with taxpayer money and reserve. Then you give those loans some time, now take into account that most of the loans are low to middle level income earners, meanwhile it has been about 15 years since the last real recession....
...then when it is time for a financial fluctuation and business cycle to hit a low. A big low...another recession. Now remember that lawmaker who passed the first law? Now he has to fix a problem in his original bill and fix it with another. OK lets use the people's money and bail out those loans? Not only bail em out, heck we'll use 700 billion dollars to bail em out. We will buy them, and appoint government hired officials to run and organize/coordinate them. And in say five or ten years from now, well see if they made any money, and if they didn't then we'll ask the corporations to pay for them then.
Now keep your eyes closed, and picture the government with 700 billion of worthless assets. Now the Bill maker has to make another law to bail out the first and second laws. Then a couple years later he has to make another and another and another??!!??!!
Now the lawman has to ask himself why this all happened. And his answer could be Well maybe I should have not intervened?
In all seriousness, I have to ask why these lawmakers with a bailout plan such as this, did not think about their plan? I sure would if I were responsible for 700 million, and not have to intervene again? Wouldn't you?