The Bailout Bill

So I’m not entirely sure how I feel about the bailout bill. I know I’m not at all happy about it, but I think—I think—it’s better than nothing, if not even remotely what I’d want. Instead of tweaking the Paulson plan and adding a bunch of tax breaks, I wish they’d blown it up and started from scratch and made it something which actually made sense. But, no surprise, they didn't. And I think I think the situation is serious enough that this not-great bill is better than doing nothing, which doesn’t seem to be an option, at least not without serious repercussions. So the bill in its current incarnation wouldn’t be my druthers—hell, it wouldn’t even be in my top five list of things I’d like to see done. But then I don’t get to make these calls. Yet.

But then I ran across this list of things which could be done with the same amount of money. And just as folks point out that we’re not giving away the $700 billion, per se, but are investing it in our financial infrastructure, so would the following list be an investment that would pay enormous dividends. If the United States of America single-handedly eradicated poverty worldwide for years? The number of people worldwide wishing to do us harm, even willling to die to do so, would plummet. It would be a phenomenal boost to our national security.

And that’s without getting into nutty idear that it’s just the right thing to do.

I know, I know: whatevs.

The arguments for a bailout to avoid systemic collapse are of course genuine and persuasive, but so are the arguments for aid and against standing by and allowing a child to die every 3 seconds, or a woman to die in childbirth every minute. To put the proposed Wall Street bailout into perspective. $700bn:

· Would clear the accumulated debt of the 49 poorest countries in the world ($375bn) twice over
· Is almost 5 times the annual amount of extra aid needed to achieve all the Millennium Development Goals on poverty, health, education etc ($150bn a year)
· Is about 7 years of current global aid levels ($104bn in 2007)
· Is enough to eradicate all world poverty for over two years (UNDP  calculates it would take $300bn to get the entire world population over the $1 a day poverty line).

On the other hand it’s

· only a quarter of the cost of the Iraq war ($3 trillion on Joseph Stiglitz’ calculation )
· a half of annual global military spending ($1339 bn)

Comments

[J]

You know, these past few months, we've had a total of four bailouts. It's the most bizarre, convoluted, unimaginable thing. I mean, the gov't-- our gov't-- has basically terminated Bear Stearns, Indymac, Wamu, Lehman Bros., and Merrill Lynch. Investment banking is officially no more. We, the American People through Sec. Paulson, control 80% of AIG, whom we're lending money to at 12% interest.

. . . And now we're proposing to buy "risky" mortgage backed securities. $700,000,000,000 worth? About 10% of which are already in default? We're proposing to buy these securities at "fire sale" prices? About 20 cents on the dollar?

On principle . . . this is just so weird. This isn't what a government should be for. This move would essentially turn our tax dollars into a huge hedge fund (this is the sort of thing hedge funds invested in during the last couple of years). Yet . . . investment wise, it seems like we have a good chance of making money in the long run. Although, it is a heck of a risk.

I like the idea of eradicating global poverty. It seems like something we should do as human beings. But truth be told, I'm a lot more afraid of healthy, entitled-feeling, self-medicating, video-game-playing terrorists in this country than I am of ill, half-starved, war-torn, technologically illiterate terrorists hundreds or thousands of miles from our boarders. To me, appeasing the first is an investment in national security, saving the second is humanitarianism.

[shannon]

That is just incomprehensible, sad and depressing.