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July 11, 2008

Who's going to bail out the US Treasury?

It's easy for Congress to spend money so freely; primarily because it's not their money. Spending gives them an opportunity to look like they're doing something useful. The reality, unfortunately, is that--more often than not--they're just making things worse.

Take the current crop of bail-outs, for example...

In return for making risky loans, risky investments, risky decisions, and engaging in risky business in the mortgage industry; Congress is considering or has already implemented huge safety nets to save everyone from the consequences. While this is presented as help for homeowners the reality is that much of this "assistance" will arrive in the pockets of Wall Street insiders and large investment firms. It seems that "capitalism" in the United States has devolved into a system where businesses are permitted to keep their profits, but all losses are shouldered by the US Taxpayer.

This is fatally flawed.

In true capitalism a business or business practice fails or succeeds on its own merits according to market forces. When a failure occurs it initiates a "realignment" and stronger competitors rise from the ashes of the failed sector. In the quasi-socialist capitalism-in-name-only system that's developed in the United States over the past century we now have a situation whereby market failures are prevented by the federal government, and failed sectors are propped up by taxpayer monies. This results in weak and barely-functioning zombie industries where capitalism would've created strong and robust new ways of doing business if only the market were left to its own devices.

So I'd like to know: Who's going to bail out the US Treasury? When everything fails because of decades of gross financial mismanagement in Washington, D.C. who's going to come to our aid? Will the manipulators in the finance sector withdraw a portion of their ill-gotten wealth from bank accounts in Switzerland or the Cayman Islands and rescue us? Will the defense contractors that bilk our government daily ride to our aid? Of course not. They'll be sipping tropical drinks on their private islands, trying to think of another country to loot and pillage, while the United States of America lists sharply and then sinks under the waves of history.

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