The FreeDictionary.com defines the word “bailout” as “a rescue from financial difficulties.” That was the term used to describe the initial government action and spending that occurred while Bush was still in office. We were told at the time that the $750 billion raised and appropriated by Congress at the behest of the President and his folks at the Treasury was to prime the pump so that cash-strapped banks and other institutions could begin lending again—entities deemed by the government “too big to fail.” And of course, it seemed plausible—and I only use that word with reservation—that because many of the lending institutions were in a jam due to failed mortgages and other similar loans (otherwise known as “toxic assets”) mostly due to government rules and regulations as dictated through Fannie Mae and Freddie Mac, they (the government) help clean up the mess. Of course, when the government gives out money, it comes from you and me.
And once the financial industry got their hands on this “bailout” money, other industries—most noticeably the automobile industry—decided to follow suit and came calling with outstretched hand looking for some, too. A business model based upon endless credit to keep production going to pay for expenses incurred previously and no cushion to fall back on, coupled with labor unions unwilling to give the slightest concession, is nothing more than the proverbial “sword of Damocles,” ready to drop at the first wrinkle. In this case, when the credit markets dried up, so did auto sales, as many people suddenly lost the ability to borrow because there was no money left to lend. At this point, we know that a “small” amount “bailout” funds have been funneled to the automakers, but we still hear that several are on the brink and in need of much more. The question is whether more money will really help fix the problem, or simply perpetuate systemic problems for another day? The same question applies to the financial institutions noted above.
As we moved down the road from the Bush Administration to the Obama Administration, it appeared that the word and notion of a “bailout” lost its luster. Time for a new word… The FreeDictionary.com defines “stimulus” as “something that acts as an incentive to (someone).” As you all know, following the bailout came the “stimulus” with a promise to “jump start” the economy. I guess it only seemed right—if “priming the pump” didn’t work, a “jump start” would come next. Of course, what came next was the stock market continued to tank and peoples’ money continued to evaporate—along with even more jobs. It seemed that the only good thing about “stimulus” was that it made for good fodder for jokes.
“Yo, Doug, feelin’ ‘stimulated’ today?” Of course the answer is, “Not really. But I AM getting bleeped…”
Uh-oh– Time for ANOTHER new word… and fast! Enter the term “recovery.” Ah yes, a much more positive word. Maybe this will be the one that gets the job done for Team Obama as they seek to “fix” the economy. Again, let us turn to the FreeDictionary.com, which defines “recovery” as “the regaining of something lost.” How perfect. As the government continues to dole out our children’s grandchildren’s great grandchildren’s money hand over fist, it can now claim to do so all in the name of going back to the way things were. Or something like that…
So what is the Obama Administration seeking to regain? While you might believe they are seeking to rebuild the mighty free market economy to what it once was before it got poisoned with the initial bad loans as forced by the government, think again. You see, for the Magic Obama and his merry band of socialists, whether you call the actions a bailout, a stimulus, or a recovery, it makes no difference because in the end, what we are witnessing is nothing more than a convenient excuse to grow government on all fronts at the expense of the private sector.
You don’t have to take my word for it, because, conveniently, we can go right to the horse’s mouth. As noted in this prior post, here’s a point regarding bailout/stimulus/recovery from a recent White House media statement:
“Speaking with state school superintendents from around the country [last week], Vice President Joe Biden and U.S. Department of Education Secretary Arne Duncan urged swift action and exceptional accountability in the disbursement of education-related recovery funds. The American Recovery and Reinvestment Act, signed into law last week, represents America’s largest-ever investment in education. It provides funding to prevent teacher layoffs today and train the educators of tomorrow, expands Pell Grants and creates a tax credit to make college affordable for every American, and invests in proven-to-work early education programs.”
Teacher layoffs?
Here’s the breakdown of where the “recovery” money will go:
“$48 billion dollars to help states balance budgets, with much of that money going directly into education. $31 billion dollars in Pell grants and tuition tax credits to make college affordable. $5 billion for early childhood. $25 billion in construction bonds for school modernization. $25 billion for Title I and Special Education. $5 billion fund to push reforms and reward excellence.”
As you can see, with Obama and the Democrats in control, everything will be fixed. Don’t you feel better now? You can call it a bailout, or stimulus, or even recovery. However you want to describe what’s happening, in the end, there is one fact that sticks out loud and clear: The era of big government being over… is over.