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Government Bailouts

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Jim Rahenkamp

Published: February 5, 2009

While millions of people were either directly or indirectly involved in the causes for A.I.G. and other necessary bailouts, if we were limited to only five words as the most responsible, they would be: Bill Clinton and Barney Frank.

While their motives were likely noble, their actions were fiscally suicidal. Change the rules so that the poor can become homeowners. Interest-only loans were even made to unemployed people who had no visible means of paying for the houses. If the taxpayer were to now pay for these mortgages, we would have beautiful socialism in effect. The person who is working or has money must pay for two houses; his and one for the person who does not have money or is not working.

President Bush urged Congress to further regulate Freddie Mac and Fanny Mae, the huge quasi government supported lending agency. Most of the Democrats thumbs-downed the proposal, while most of the Republicans supported further controls. Since Democrats controlled Congress, the proposal was dead on arrival. The chickens have now come home to roost.

We must not confuse "Bailout" with "Buy Out." Chrysler Corporation was bailed out and the taxpayer realized a large net profit. While several years will be involved, there is a reasonable likelihood that the taxpayer will ultimately realize a profit from the A.I.G. bailout.

Jim Rahenkamp
Avon Park

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