There is an argument that the cost of the bailout should be weighed against the cost of a bust.
Does this mean the US, in case of a bust, should be welcome to the Third World Club? It remains to ask who will benefit from US economic difficulties, will it be China who will jump on US markets abroad?
It seems that for the US government the bailout is a matter of life or death. As a powerful country with a very ramified economy, it will be unthinkable that it will ask for international help to phase out its current troubles. This seemingly economic tsunami is unlike Katrina disaster which make the USA for the first time in its history to accept international aid to cope with it. The US economy to save itself and the economies of other countries need restructuring at every major financial institutions for them to go regularly smoothly, creating benefits and not not unsustainable losses.
The issue of bailing out banks will certainly hit the tax payers as the money needed for social projects will be channeled into banks that in the first place let things go wrong.
The bailout should be the last surgery to save a sector from a chronic situation that is likely to affect the rest of the world, knowing that the US economy counts 20% of the international trade. Otherwise a global crisis will spread like fire hitting the US economy and other economies beyond.
Perhaps there should be a mechanism by which the government can retrieve the $700 billion when the bailed out banks return to a healthy state. It won’t make sense that banks will continue to have a pat on the back each time they are in trouble instead of a slap on the hand each time they go knowingly go wrong. Taxpayers don’t just have the right to know where their money goes but the right to ave their say on how it should be spent.
This issue is surely a big headache for Obama and McCain in this presidential election period. It’s the biggest test for them to show the voters to what extent they can be up to big challenges.
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