Current Article

Published September 23, 2008

The World's Largest Collection Agency

I don't know if I had one of those "aha" moments yesterday evening or a "duh" moment. Whichever, I suddenly realized that if Bush's program to buy up much of the "toxic" bad debt left over from the Wall Street mess goes through, the United States of America will have become much more of a socialist nation than it already is. Uncle Sam will cease being a mere symbol of American pride and patriotism and instead will become the CEO of the world's largest collection agency and we the people will become the share holders.

We are on the brink of purchasing a $700 billion bundle of bad debt, just like all collection agencies, on the off chance that we can resell it over time and make a profit. Whether we can even break even will depend largely on how much we pay for this bundle of bad debt and what it is really worth in a very weak market. If we pay mere pennies on the dollar, doesn't that still leave our financial institutions largely depleted of capital? Aren't we simply transferring this massive debt load from the shoulders of those who caused it onto the taxpayer?

By the way, if you're one of those "taxpayers" who have run up massive personal debt of your own by buying a home you can't really afford, parking a new bass boat in the driveway that you didn't pay cash for, surrounding yourself with material goods purchased on maxed out credit cards, then you are also one of those who helped cause this mess.

Also, consider what other effects this buyout plan carries with it. If we are already running a $400+ billion deficit we can't spend another dollar on anything unless we either borrow it from China or print it. Either way, the national debt goes up, along with prices (inflation), and the value of the American dollar goes down. The legislated limit on the national debt will need to be raised to $11.3 trillion dollars and Bush may become the first president to reside over trillion dollar national deficit. Now there's a legacy to die for!

Folks, this is serious stuff and the last thing we need is for the president and congress (Democrats and Republicans) to rush head long into a hastily conceived strategy that drives us closer to becoming a third-world Banana Republic dependent on the charity of the world. Like I said in an earlier column, Economics 101 didn't prepare me to divine a solution to this debacle but it did allow me to recognize what's wrong.

By the way, socialism is when the government gains control of the means of creating wealth. And what means of wealth is there any greater than the financial sphere?

greenfieldohio@gmail.com