Letter from the Editor

Tuesday, September 30, 2008

The bailout math

Doesn't the idea of giving $700 billion in our money to bail out the Armani suit crowd just warm the cockles of your heart? Granted, I don't know what cockles are... but mine for one are unwarmed.

How many zeroes in 700 billion? - carry the eight, divide by the square root of Britney Spears' measurements, it's, um, well, in technical terms, a buttload.

The Bush Administration and Congress hasn't been able to figure it out, but that's okay. The e-mail political geniuses are doing even worse.

By now everyone who isn't herding goats in Kazakhstan has seen the e-mail "A U.S. Citizen Bailout," by businessman T.J. Birkenmeier, a self-styled "creative guy and citizen of the republic." He's being hailed as a visionary all over the place.

"I'm against the $85,000,000,000.00 bailout of AIG," he writes. "Instead, I'm in favor of giving $85,000,000,000 to America in a We Deserve It Dividend. To make the math simple, let's assume there are 200,000,000 bona fide U.S. Citizens 18+.... So divide 200 million adults into $85 billon that equals $425,000.00. My plan is to give $425,000 to every person..."

Smashing! Peachy, even. But sadly, someone missed fifth grade long division. $85 billion divided by the 200,000,000, comes out to a whopping 425 bucks, not $425,000. (I figured this up while taking my shower this morning, so don't mind the math being done on damp Charmin.)

Sorry, $425 is not enough to bid on Britney's used chewing gum on e-Bay, let alone solve an economic crisis.

And even the $700 billion financial industry bailout package figure that has been thrown around would amount to a couple grand per person, not a million dollars each as another of these popular brainiac e-mails making the rounds misfigures.

No wonder our economy is messed up - and no wonder we keep getting duped by our own government. No one can do simple math, let alone fill out their own tax form.

Or, more likely, no one bothers to check to see if whatever we are told is true, even when something sounds incredibly too good to possibly be true. We just forward it on as "fact."

I hope you haven't all spent your $425,000 yet.

Of course, these people have their hearts in the right place, if not their decimal points. And if the government wants to send a little cash to us instead of AIG or Wall Street, I'm cool with that.

When a whole lot of people can barely afford groceries or to fill up their gas tank, they probably aren't losing a lot of sleep for displaced Wall Street fatcats who played a little fast and loose with others' 401K nest eggs.

We also have to face facts. Last I heard, our government was $50 trillion in hock counting IOUs on Social Security and such shenanigans - compared to some $14 trillion it takes in for a year. It doesn't have the money to bail anyone out.

How much is $700 billion? Enough to buy Denmark and Saudi Arabia put together (in fact, more than the grosss national product of 212 out of 224 countries.) Or, 12,962,962 Corvette convertibles. Counting on my fingers, it seems the proposed bailouts at this moment add up to almost the total of all industry bailouts previously in the history of the United States.

And handing out a trillion dollars to the financial system wouldn't change anything, most especially the reckless pursuit of predatory lending that largely got us into the mess we're in. The debts are bound to fail, at an increasing rate, and even a trillion dollar bail out isn't going to change it. There's a lot of things wrong, and none of it can really be fixed with a bailout.

As our local Upper Des Moines food pantry director well puts it, "everything is going up but the paychecks."

Even deeper than that, it has been two generations since we were a society that knew how to save. Even if we tried, our system is no longer set up for it. Our savings accounts pay 1% interest and CDs maybe 3 percent, while we pay out perhaps 7 percent interest on a mortgage load, or up to 17-20 percent on a maxed-out credit card. Investment is now a form of gambling, not saving, and sometimes, we lose big.

We spend all we have, and never satisifed, then run up the credit. The average household with a credit card balance owes nearly $6,000. Pile on college debt we couldn't pay off in a lifetime. Take out a loan on any terms to have the home or car we want, no matter if we could realistically pay it off or not.

My grandfather's financial strategy was pretty simple. "If you can't afford it, don't bother wanting it," he said.

But today it's apparently fine to be a deadbeat dad, or to not bother paying back taxes, medical bills, college debt, credit card debt. Wait for one of those "pennies on the dollar" commercials to bail us out, or the few responsible taxpayers left to carry the burden for all the rest. And we wonder what went wrong...

Look, no one is going to hand you a big wad of money and make it all better, no matter what your e-mail sayd. We have to change, and so does our government.

First, be American, buy American. If we still make anything here, put an American tag on it so people can see it. Eliminate sales tax on goods made in America, double the tax for stuff made overseas. That should be a good kick in the pants to the traitor companies that left to take advantage of slave labor elsewhere.

Oh, and sorry, we're not going to prop up every government in the world and fight everyone's battles any more. You have an earthquake or a flood, we'll be part of the help crew in an instant. But politically, it's time to care care of our own needs at home first. The one bailout we need is the one to bring our soldiers home as the heroes they are. That war is won.

And by the way, if congress and the president can't honestly balance a budget for a fiscal year, they don't get paid for that year. We suffer, they suffer. Watch the difference that makes.

Okay, shower's over. If I had a better hot water heater, maybe we could figure out what's wrong with music today. Guess that will have to wait until tomorrow morning.