(7-10 min read)
By now, most of you have seen the news and the talks about a "Bailout Plan" or a financial meltdown of the economy. A plan of some type is what most experts (that would not be me) agree we need. What exactly is it? Ok, I will tell you in plain English. Nah let us make that "Keeping Up" Lingo.
Let's look at your home and all the many faucets you have. You have one in the bathroom, in the kitchen, outside your home and so on. Now let us say you wake up the next morning and want to take a bath or shower. This is not any ordinary morning this is a morning of firsts. You have your first new meeting with your new boss or first class at school with a new teacher. You turn on the faucet and nothing comes out, now that you have no clothes on you grab your robe and whisk yourself over to the kids bathroom.(in my case good luck) After stepping on a few Lego toys and rubber ducks, you attempt to turn the water on again. To no avail, a drip comes out. Now what do you do? You basically need a 700 Billion Bailout plan. Well in your case a shower. You could go to your neighbors, but heck your clog caused theirs to become slightly clogged as well.
You find out later from the rooter guy what caused all the clogging. You would go on learn about a couple of little plastic balls that your son wanted to test out in all of the bathtubs in the house. That risk your son took unknowingly caused a jam in the water flow. Alternatively, in our economy's case, our cash flow has your son's plastic balls in it and they are called the bad loan balls. When there is no money from loans that went bad, somebody has to pay for the loans. Can't go to our neighbors' overseas because they got some of our bad loan balls as well. Can't go to your relatives Auntie and Uncle Fannie and Freddie Mac, because they are the ones who passed the balls around to the rest of the neighborhood. When you don't have money or the confidence to loan out what little you have left then nobody gets any money. The result is no more school loans, no more car loans, no more home loans, no more construction loans, and no more business loans. Quite frankly what is happening now is there is not enough money, because somebody has to hold the bad loan money balls. The Federal Chairman said, "It's no longer about pure economics, it's about psychology."
Where did the 700 Billion number come from? Well experts say 700 Billion is still very short and will not totally cure the bad loan balls, but they said they had to start somewhere. What congress wants (and the reason the bill is still not signed) is simple if we (taxpayers) have to be taxed somewhere down the line to hold the bad loan balls we should get a cut of the pie when the drain becomes unclogged. Did I mention somebody somewhere at some point would have to pay for all not some of the bad loan balls?
Keep n' Up Until next time
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