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Bailouts

September 12, 2008

On September 7th 2008, our country became vastly more poorer than the day before.  On that day the Federal Government took over Fannie Mae and Freddie Mac mortgage companies. Now I am no financial expert, nor do I claim to be one, but on broad terms, when the government starts interfering with certain markets, you know something bad was going to happen, and the government came to help, right?……No.

Something bad for some may have happened, a necessary cleansing of some of the bad loans and bad investments, a vital part of the cycle of the economy just as the earth goes through seasons. What the government basically did was prolong this necessary cleansing. It is kind of like stopping all the hurricanes for five years but not being able to control it when all the hurricanes from those years come bearing down on the same place at once. Not to mention the real reasons why they got bailed out. I am sure the legislators have some hand in these companies, and friends as well. On philosophic terms, since when is rewarding bad behavior part of a free market? Those companies should learn their lessons and fail. Since they did not fail, and since our government feels the need to control our economic freedoms, and consequences of it, we are now around 5 trillion dollars more in debt.

You would think it would stop here, right? I mean just think of the troubles we are going to have down the road, I imagine a much worse problem since this one has not been aloud to fail. What if the airlines go bankrupt? will the government come and save them as well? Since when are big companies in the free market ‘too big’ to fail? I mean before we know it the whole private, free market world and all companies will be ‘too big’ to fail. That is the day we have Socialism. It is closer than you think and the majority of us don’t even know it is happening.  Just in the past few weeks the auto-industry is asking for 50 billion in loans from the government. So not only do some want government healthcare, and loans, but now government cars? what is next?

It is sickening that we say we have free-market capitalism. If we need loans to open up stores, and those banks are owned by the government, than who owns what.

In Liberty,

Jon lauro

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