by Carol G

Created on: September 18, 2008   Last Updated: January 29, 2009

I believe George Will would apply the term "lemon socialism" to the idea of the federal government creating a bail out for the banks. Lobbyists may be asking for this kind of protection, but the bail out money would come from the taxpayers in the long run.

If taxpayers support private enterprise, they should also receive dividends when the business is profitable again. Who will realize the profits financed through taxpayer's hard earned dollars? The answer may remain shrouded because despite pockets bulging with U.S. citizen's tax dollars, companies don't feel accountable for their expenditures.

A good example is GMAC. When they gave $500,000 to help their favorite college football team, some asked questions. The answer given by GMAC was that they don't feel that it's anyone else's business.

Why should socialism be applied to businesses and not the people? The tax dollars could be spent on insurance instead. Oh, wait a minute . . .the taxpayers will be helping the insurance companies, too. Although insurance still made huge profits after the hurricanes in Florida of 2004, they expect to take slip and fall cases, and leave the rest to the government.

I've listened to a lot of people talking on this matter. What the problem boils down to is people not doing their jobs. The risky loans, and supposed bail outs with credit cards should have seen some limits imposed by regulation if it were the place of the feds to get involved in private enterprise banking.

Greenspan traces the problem back to the instability of the housing market. Anyone involved in the real estate business over the past ten years can tell you about the housing bubble. My husband and I were looking for a retirement home to buy when we encountered tiny cubicle lots of approximately 90' by 70' going for $100,000 with no hookup to public utilities. We saw horrible shacks with flooring missing, and only a yellow tape across the area that exposed bare earth. The price for this vinyl sided beauty was $50,000.

Knowing that the businesses didn't look out for themselves, the idea that the federal government will take over banks'bad debt is almost ludicrous. If government subsidies can be alloted here and there to failing businesses, how can anyone be sure that these problems will be handled with foresight and the ability, or expertise needed to solve the bad debt problem. The ability to handle the banking business may have had credibility had someone in government who knew what they were doing enough to enforce some regulations.

At the most basic level, those who never had an intention to repay their loans should get some morals. I was visiting in a Florida city that had 10,000 foreclosures in one year. Many of these houses were purchased as marijuana growing facilities. On the six o'clock news, the police were depicted carrying out huge planters of marijuana from these formerly profitable establishments.

Now that the wide sweep of foreclosures is in full motion, the banks are in the desparate position of offering a $2,000 reward for not vandalzing the house that has been reclaimed by the bank. Ransacking has become a profitable business on top of not paying off loans. Another case where people could get some morals.

At this point, having the federal government create and entity that will take over banks' bad debts is like an overly indulgent parent whose kid never seems to grow up.

Learn more about this author, Carol G.
Click here to send this author comments or questions.