Goverment is stupid

I believe that we all recognize that government is a stupid entity. However as I times goes by I am consistently floored by the degree to which government is stupid. Lets take the TARP that we just so recently got. They set aside 700 Billion dollars to buy up bad assets of the banks so that the banks could go on about their business of lending money to people again. The government in turn would hope that those bad assets would eventually turn good, or at least better, and they wouldn't lose too much money on them. This was an admirable plan.

The reality was that this money was used to buy stock in the banks. What the hell. The thing is that the banks don't need more money. The problem with banks is that they made bad loans, these bad loans are weighing in on their solvency. WE CANNOT PUMP ENOUGH STRAIGHT CASH INTO THESE TROUBLED BANKS TO MAKE THEM SOLVENT. This is a fact.

The reason that we did not buy the bad assets that are destroying the banks solvency is that they were going to be to cheap. We would have purchased them for about 20 cents on the dollar. For that price the banks go out of business. If the government pays more for these assets it artificially inflates them and is essentially creating inflation. If the banks take the money they right down the costs until they are broke.

So we recognized that the TARP (Troubled Asset Relief Program) wouldn't work the way we wanted it to.

What do we do next? That's right we come up with a Bad Bank program. Basically the Bad Bank program would purchase all these bad assets that the bank has that is crippling them and making it so that they aren't able to lend money to people... wait a second. Isn't that what the TARP was? No that couldn't be right. We couldn't possibly be coming up with the exact same program, we already wasted 350 Billion bucks on this how could we set aside a different 900 Billion to do the same thing that we already recognized wont work, that would be silly.

But anyway, what about this stimulus plan. Seems like a good idea right. That seems like it ought to help us fix the underlying issues that are affecting us in this recession. You see the reason that we are in a recession is that the house prices fell out the bottom, which dropped the value of the loans the bank had, which made lending difficult to do when the banks recognized that they wouldn't be able to make current big loans, which meant that companies couldn't get loans for payroll, which meant that people would have to get laid off, which drops the GDP because people tend to spend less money when they don't have income.

So the stimulus plan which will help us get out of this recession- sod the lawn. Wait what was that, what does sod the lawn mean, that must be a metaphor, that we will sod the lawn of the american industry hoping that with time and appropriate moisture it will take root and our economy will flourish again. No they are going to literally sod the lawn of the Washington Mall.

What the hell.

Oh that ought to fix the root problems that stem from the problems in the housing area. $980 Billion dollars of spending for contraceptives, yard work, food stamps, and various and sundry other solutions that DO NOT address the problems we face today. Thats like loading up on tea and honey during an influenza out break rather than vaccines. Lets address the symptoms of the problem rather than the cause, shall we? Thats all I got.

PAX