Thursday, April 02, 2009

It Better Work

Talifaitasi W. Satele

Over the last few months, I’ve been in utter shock at how fast America has turned away from capitalism. Everything President Obama and Democrats (and some Republicans) have proposed and enacted has been done in the name of saving the economy.

While their policies go against everything I observe to be true, deep down inside, I am hoping…no, praying, that it all works out. Like you, I have a family to feed, bills to pay, and a future to fulfill.

But these big government policies are doomed to fail. For what ails the economy cannot be cured but through its sickness. The economy cannot gain until it has realized what it has lost. In other words, we have to allow those who made the wrong choices to suffer the consequences before we can even begin to think we could prosper once again.

And it’s not that those wrong choices imply the people who made them are bad or evil; it’s just that those choices didn’t work out.

Homeowners across the country were in a rush to sap the equity out of their homes, because loans were then easy to make. No documentation required. No proof of income. Credit scores were not even relevant. All in the name of some social-economic mission.

But in the end, someone has to pay the bill. No matter how a loan was structured, when the lender didn’t receive from the borrower what he expected from his investment, there was a loss realized in the market. Someone had to pay for that loss. It was either the person who did the lending or the person who borrowed.

The only way we could have avoided this crisis was for borrowers to pay their loans as expected. But how could borrowers pay their loans in a economy that was fueled by those loans?

It’s like watching a dog chase its own tail.

And every policy from the stimulus package to every single bank bailout has been done in a futile attempt to trick the market into believing a price doesn’t have to be paid. It’s as if prosperity were only a matter of borrowing or printing money.

It’s that type of mentality that makes me sick.

When I eat rice, I think about the farmer who planted it; I think about the guy who packaged it; the person who shipped it over; and the entrepreneur who took the risk to inventory it; and then sell it to me. Then I remember that nothing in this world is free.

Yet all these big government policies from the federal government say otherwise.

All I have to say is that, in the end, it better work!


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