Thursday, September 25, 2008

The Bail-Out - What's The Problem?

As I write this, there are men, men wearing suits, important men, who, in the corridors of power in Washington D.C, are deciding what to do about all the banks, investment houses, and whatnot, which have become insolvent in recent days and weeks.

If the taxpayers of America don't bail them out, then the entire American economy - and by extension the world economy - will collapse. So say the men in suits, the ones in the corridors of power in Washington D.C.

I - for what it's worth - think these men in suits are right in their evaluation of the potential economic apocalypse arising out of these banks, investment houses, and whatnot, going under, and that something must be done about it.

Not only do I think that something must be done, so do most of those Americans who think, notwithstanding that most Americans don't think. But sufficient numbers of Americans do think, and think enough to see that they will lose their jobs and houses and everything else they hold dear, if they simply allow these banks, investment houses and whatnot, to collapse, and they do nothing to save them.

It seems then, that financial help will be forthcoming, and the amount suggested is $700 billion dollars. This does seem an awful lot of money for America's taxpayers to pay. But is it really, all things considered?

Since the number of Americans, including corporations, who file tax returns, is approximately 100 million, each American taxpayer, on average, would therefore pay an extra $7,000 when next they file their tax return.

This works out to approximately $19 dollars a day on average. But, individually, this would be a lot less for those earning low incomes, and somewhat more for those who earn as much as John McCain or Donald Trump. The important thing is that it would be, like, affordable.

Consider that Americans spend $650 billion dollars a year for their national defense. But defense against whom? since what Americans pay for their national defense is more than what the next 45 countries combined pay for their defense.

By spending $650 billion dollars a year on guns, tanks, aeroplanes, rockets, and missiles, Americans are implicitly saying that the aforesaid next 45 countries pose a dire threat to America, and would invade continental America with their armies if Americans didn't pay $650 billion a year on defense. But is this not carrying paranoia to an extreme?

Were Americans, instead of paying $650 billion a year to defend themselves, to cut this to, say, $100 billion, the chances are extremely good that these next 45 countries would still not invade America, if only because America, being cut off from Europe and Asia by large bodies of water, would be a very difficult country to invade.

I suggest, then, that to cut $550 billion a year from the national defense, would be a risk which Americans can well take, and that these saved monies could be applied to the $700 billion to bail out Wall Street. This would leave a mere $150 billion, which, in view of all I've said, is, relatively speaking, piffling.

So I'm not worried any more, and neither, dear reader, should you be.