Monday, September 29, 2008

US taxpayers saved, financial markets sink

The Democrats could have passed the bill on their own - to take US$700 billion from future taxpayers to bail out the foolish borrowings and foolish lendings by US banks, encouraged implicitly by a central bank that kept extending the money supply - but even they couldn't be convinced. Too many saw their constituents demanding why they should be forced to bail out Wall Street. Many more Republicans said the same, and reacted to the lies that this was the result of "8 years of economic mismanagement" as rich little leftwing Democrat Nancy Pelosi bleated. Democrats want this to be painted as the fault of Bush and the Republicans, but their hands are far from clean. This goes back before Bush and even before Clinton - it is a longstanding problem of government growth in the money supply, and the long held belief that the government will step in.

So, according to CNN the Dow Jones has plummeted 7%, it is about time to do some bargain hunting.

Obama and McCain don't know what to do. Obama is trying to make hay from it, McCain is trying to say Obama would spend even more taxpayers' money on new programmes.

The truth is both look like less than Presidential material at the moment - neither give the public confidence in the economic future. Gerald Warner in the Daily Telegraph says that as McCain and Obama both supported the package, US voters chose "none of the above" in putting huge pressure on Congress to say no.

For now the taxpayers have won the battle - the question is what the cost of that will be in the short to medium term.

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