Sunday, June 26, 2011

Getting out of Debt: A Modest Proposal

Back in 2009 our government committed large sums of money to bail out failing financial institutions under the premise that they were “too big to fail” (or, properly speaking, too big to allow to fail).  These days it seems as if both the Executive and Legislative branches can talk about nothing other than our debt situation and the need to raise the debt ceiling.  The underlying argument in favor of increasing debt is that we have so many debts outstanding that limiting further borrowing would lead to default on at least some of our key loans, and the impact on the global economy would be disastrous.  In other words the United States is too big a player in the world to be allowed to fail through failure to pay off its debts.

So, if the United States Government responded to the dire situation of the banks when they were on the brink of collapse, would it not make sense for those banks (which seem to be doing very well these days, at least in the eyes of their shareholders) to bail out the government that saved them in its hour of need?

1 comment:

pcharmin said...

it would be a big help if the govrenment stopped them from scamming us.did you know that uncle sam lends the big banks money at zero % interest,then the banks since they are not lending it out put the money in to the treasury fund and uncle sam then pays them interest to use that money of course adding to the dept and tax payer burden AIN'T LIFE GRAND