What the Bailout Won't Do

Like most Americans, I've been closely watching as our leaders discuss and debate this bailout. I watched and listened to most of the debate in the House on Tuesday, and will be watching the Senate debate today.

I keep hearing over and over again how we must do something; that the cost of doing nothing is greater than the cost of this bailout. But I would have to ask our honored members of Congress, what will the cost be for doing the wrong thing? Panic and fear can not, and should not, drive these decisions and actions.

We have some great resources out there to fix this that won't use $700 billion taxpayer dollars. The discussions on the House floor Tuesday posed some potential solutions that should, at the very least, be looked into, investigated, and debated. We need to find the right fix, or the right 25 or 50 fixes, whatever they may be. (One proposed solution was changing the mark to market accounting rules. Another was studying the obviously successful actions taken during the Savings and Loan crisis and modeling a solution on steps taken then.) But after all is said and done, if we do need to throw $700 billion at the problem, let's make sure it lands where it needs to.

This bailout does not guarantee against further job loss. It doesn't contain any type of layoff freeze and job loss is the proverbial horse that already left the barn. At the end of August, 9.4 million Americans were already out of work. The potential provision to extend unemployment benefits isn't going to solve this problem. It would only give some of these 9.4 million unemployed Americans a few more weeks to find a job. But jobs aren't out there to find and they aren't going to magically appear in just a few weeks because unemployment benefits were extended. If we could get these 9.4 million people back to work, they will be able to pay their bills and mortgages.

This bailout doesn't fix the credit crunch. The bailout might give some liquidity to lenders and banks, giving them breathing room to lend money but it doesn't say they have to lend it. They could certainly, and prudently, just sit on their suddenly freed up cash.