Tough times merit tough action

To the editor:

This country is in serious trouble. The basic problem is financial irresponsibility and spending more than we earn, resulting in a $9.5 trillion national debt.

Treasury Secretary Henry Paulson is recommending a bailout with taxpayer money, but there is no surplus taxpayer money. The government has to decide whether to borrow or to print more money.

Low interest rates have resulted in wild spending frenzies and borrowing for speculation, mergers, acquisitions, overexpansion and overpriced stocks, resulting in inflation and a devalued dollar.

If we bail out everyone who needs help, it is estimated to cost hundreds of billions of dollars. Where will the money come from? More borrowing or printing of money is not a good idea, because it would prolong the problem, cause more inflation and devalue the dollar.

There is no easy solution. Wall Street hopes for a huge federal intervention, and Paulson is leaning toward a massive bailout. Any bailout should be limited. Any bill introduced to allow bailouts should curtail excessive executive pay.

An increase in the federal lending interest rate would slow the economy but would prevent excessive borrowing for speculative investments.

A long-term correction should include tax reform, eliminating corporate loopholes, income-tax increases on a graduated scale for anyone earning more than $400,000 a year, eliminating tax breaks and subsidies except for manufactured goods that are exported and reducing spending by cutting back special projects and ending the war in Iraq. Any massive bailout will only make matters worse.

JACK H. KNOWLAN Sr., Jackson