Bailout insanity

By Jack H. Knowlan Sr.

I should use the statement recently used in Speak Out: "Anyone with an ounce of brains should know better." But I won't.

I will say I was completely dumbfounded at the lack of insight, foresight, knowledge or logic of the majority of our elected officials. I want to again commend Republican Sen. Richard Shelby, Republican Rep. Ron Paul and the other Republican and Democratic representatives and senators who were smart enough to see through the $700 billion bailout bill and vote against it.

Here are some figures that show how insane it is:

• Total income estimate from all taxes, duties and other sources: $2.665 trillion.
• President's mandatory and discretionary budget: $2.902 trillion. Appropriations for Afghanistan and Iraq wars: $240 billion. Total: $3.142 trillion.
• Bailouts: Fannie Mae and Freddie Mac, $200 billion. AIG stock purchase, $85 billion. Bear Stearns, $29 billion. Auto industry, $25 billion. Money markets via mutual funds, $122 billion. Pork-filled, 400-page Wall Street and bank bailout, $700 billion. Total: $1.161 trillion.

The total of all this is $4.303 trillion. This, less the country's estimated income of $2.665 trillion, leaves a deficit so far for 2008 of $1.638 trillion, the largest annual deficit in history.

Since the government is already operating in the red, it can only pay these bailouts by borrowing and adding to the $9.7 trillion debt, for a total debt of $11.3 trillion, or by printing and circulating more currency in a highly inflated economy.

Printing excess dollars has already devalued the dollar to about 56 cents. Printing and circulating this $1.6 trillion bailout would have devastating effects on our economy. Since we are an import country and have a $4.5 trillion trade deficit, everything we buy and bring into this country -- including oil and fertilizer -- will cost at least 20 percent more.

The basic cause of the 1929 recession was printing too much money and making it available at low interest rates, which resulted in wild spending frenzies, speculative investments, mergers, acquisitions, overexpansion and overpriced stocks and houses.

This is exactly the problem we have today, and bailouts are only going to prolong it or make it worse.

It has been said that the sole purpose of the gloom-and-doom forecast by Federal Reserve chairman Ben Bernanke and Treasury Secretary Henry Paulson, just days away from a complete meltdown, was to postpone it until the next administration takes over.

Proponents of the bailout justify voting for it because 50 percent of the population is involved in the stock market. The other side of the coin is that 1 percent of the population owns 47 percent of all the stock.

Opponents say President Bush is socializing insurance companies and financial institutions and rewarding them for their failure, negligence and greed.

Jack H. Knowlan Sr. resides in Jackson.