What Do You Think of the $700 Billion Bailout?

I’m not really sure what I think about the proposed $700 billion bailout plan as proposed to congress by President Bush a few weeks ago, but one thing is for sure, and that is that our financial services industry is on the verge of collapse and needed desperate bailing out by someone if they were to survive, and of course that someone happens to be the Federal government as of late. First we had the bailout of several large banks, and now the latest was with the largest insurer and financial instruments investor company AIG, and there are more lining up that will claim they need the government’s help.

I just have one major problem with this, and that is, where is all this money coming from? I mean we know that the government has emergency funds set up in place for things like this, but isn’t this going over even what the Fed’s deep pockets can responsibly offer without putting taxpayers way in the hole for years to come? It seems like this will definitely be falling on the shoulders of taxpayers over the next several decades, but what we don’t know is if this change will be fairly transparent and minute or whether it will be more painful than we think.

I have mixed emotions on the subject. As my dad, says, the government is trying to legislate away a depression and it won’t work. Nature will take it’s course and we were supposedly overdue for a massive market correction of sorts, however the government is wanting to smooth this over with emergency funds. Will this money work to bail out these major companies from years of abuse and loose lending practices and bad choices in subprime mortgage investment instruments?

I don’t have the answers, as most economists and experienced financial gurus do not either (I’m not putting myself in that category, trust me, I’m a novice at best, but an interested novice), but one thing is for sure. We must be in for a few years of turmoil and low markets, and it’s probably not going to be a good investment choice to get into any markets for the next year or so since the markets supposedly will not move anywhere but adjacent for a while. There will be rallies, but nothing long term until the dust settles.