by Paul Kemp

Created on: December 17, 2008   Last Updated: January 13, 2009

1) Our country can't afford more debt. More federal debt means more interest for future generations to pay for this ill-considered public heist.

2) It rewards the culprits. What you reward, you get more of. What caused this Bubble was unnaturally low interest rates by the Federal Reserve, to pump up the economy after the Dot.com bust. The Fed looked the other way while unwise lending practices (with the cheap money they provided) re-stimulated the economy to exteme and dangerous levels. To save the banks, insurance giants, auto industry, etc., by bailing out those who took unwise chances with their investors' money will only send the message that such "irrational exuberance" is tacitly approved by the Fed and our government. It will become standard practice here, but the world's other buyers of American debt will not fail to notice this clear signal that "financial piracy" is the policy of the U.S. We will be cut off from the credit markets of the world as a result, which will be our downfall.

3) It represents theft from the good citizens and businesspeople who pay their loans, don't lie when they apply, and don't act in such a reckless way that they require the innocent public to bail them out. This sends a bad signal to the honest people, as to how they should conduct their financial affairs.

4) It subsidizes bad business practices and keeps alive businesses that should receive the punishment of the market, to go out of business so that they can't continue to harm investors and creditors.

5) It will prolong the agony of a depressed economy, as it deleverages and figures out what bank assets are really worth. It will keep Zombie businesses alive and they will continue their uncompetitive practices.

6) The federal government can't print or borrow enough money to shore up an overbuilt, overpriced housing/finance industry. If it tries anyway, we will find out what hyperinflation is. This will relegate the USA to the status of a Third-World nation, with no one willing to lend to us at favorable prices.

7) Congress has focused on the wrong problem: There is no shortage of credit; There are too few trustworthy, creditworthy borrowers who qualify for the legitimate credit channels.

8) The bailouts further separate our society into the super rich whom the government will not allow to fail (no matter how foolishly they do business) and the unsubsidized working class and poor, who get stuck with the bill. This creates resentment and potentially rebellion down the road. Social

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