The Bailout – Benefit or Bane?

It is hard not to be skeptical about the US economy these days with the constant market fluctuations and the credit crisis putting many Americans on the pathway to poverty.  Recently, Congress passed the President’s $700 billion bailout plan to boost our economy, $250 billion of which is basically being given to financial institutions with no strings attached. 

What does this really mean for the average American?  Will this bailout really help to stimulate the economy like they are saying it will?  If you have any doubts (which you should), then read on and see why you should be skeptical of this newly passed plan to give us an “economic boost.”

Bank Executives’ Salaries Will Be Cut

According to the parameters of the bailout, bank executives will have caps on their salaries as long as the government is an investor in their institution.  This is evidently a preemptive major to ensure that CEOs don’t continue to make risky investments in an attempt to make massive bonuses.  However, no one seems to be questioning the fact that many of these executives and CEOs made hundreds of millions of dollars—even when their banks were going under.  How is it possible that we are bailing out people who make more money than most people make in their entire lives while families are losing their homes?

Taxpayer Burden

Ultimately, what it all comes down to is that the average American citizen will end up paying for the mistakes of the rich and greedy folks in the credit and banking industries.  The same people who lost their homes to these institutions will help nurse them back to health financially for generations to come.

New Loan Incentives

The government has once again offered banks incentives for boosting the housing market.  Am I missing something here?  I feel like Bill Murray in Groundhog Day—isn’t this exactly what got us into this mess in the first place?  Encouraging banks to start lending again when they mismanaged and plundered the middle-class coffers the first time around sounds like they’re being given permission to beat up the sick kid when he’s only halfway recovered.

Job Market Worsening

Even with all this money being put back into the economy (starting at the very top, mind you), the job market is flailing around, with no recovery in sight thus far.  Although gas prices have temporarily plunged and minimum wage recently rose to $6.55 an hour, the average working American can barely afford to make ends meet.  As their credit continues to get worse, the banks’ future appears to be brighter than ever.  Is anybody willing to bail out the average Joe?