Why I'm Glad the Bailout Failed

You don’t have to be a financial genius to realize that we are experiencing economic upheaval in America. Just turn on the TV or check the internet — every newscaster and pundit is talking about the current crisis and looming disaster. Only time will tell if this is a hiccup or the start of a downward spiral. To have even a basic understanding of the situation, you better brush up on sub-prime loans, derivatives and credit markets and know the difference between AIG, Fannie Mae, Freddie Mac and Bernie Mac. (Sorry, I couldn’t help myself!) Once you get a grasp on the idea that there is a problem, you hear the word BAILOUT. What a great word! We can get this whole mess fixed and stabilized by writing a $700,000,000,000 check! Where do I sign? True, the solution might not be quite that simple but even if the bailout plan passed and the credit markets came unstuck, is that really what we want?

Maybe we have talked too much about how to get out of this mess –the market and political factors behind it — and not enough about what really got us here. Maybe this whole situation is a result of a much bigger problem. Maybe the reality of not finding a quick-fix on Capitol Hill will be a wake up call, an alarm persistently saying “look deeper!”

The root issue is not illiquidity in the credit market or fat bonuses for CEOs. The issue is discontent. A dissatisfaction with what we do have drives us to keep up with the Joneses, our neighbors, coworkers, bosses and the family we sit next to in church. Want a HD TV, the iPhone, iPod, a Disney vacation, the latest fashion and the newest MacBook? Just open a new credit card – easy as that. Or what about owning a home? Gone are the days when that purchase was marked by significant achievement and effort. Those feelings have morphed into a God-given right. We deserve not just any home, but the biggest home we can afford the payments on. Don’t mind that we are paying only interest and in three years the rate will jump to a gazillion percent! Our insatiable hunger has led many of us to do whatever it takes to get whatever we want, whenever we want it. A discontented heart often leads to greed – always wanting more and never finding it enough. And the credit market only made it easier.

So when talk of a bailout comes along, of course we want it! It’s our “get out of jail free” card. It makes everything okay and keeps the train rolling down the tracks we have been laying for years. It feeds the monster — instant gratification without any hitches.

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It would probably do us good to not get what we want and develop some discipline. Revolutionary, isn’t it! I know that discipline might sound like a bad word but the average American saves less than one percent of their income. Less than one percent! If credit stops flowing like a raging Colorado river, people would be forced to save for a down payment, buy something only when they have the money, or resist the urge to automatically upgrade to the latest and greatest.

We don’t like to be deprived. That’s the American way, right? Maybe we have forgotten that a life devoid of personal responsibility ceases to be free and is simply a slave to its bloated desires and unmet cravings. America is indeed a land of opportunity. We should be careful to not mistake opportunity for obligation and a free ride.

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