How the Government Bailout of Failing Companies Enslaves our Children and Grandchildren

The pit of economic bleakness looks like a black hole into the future to those attentive to the recent indiscretions of the federal government. I am concerned about the future of our national economy not primarily because of the predictable dramatic failures of private companies in recent weeks, but because of the government's responses to them. Risky business deserves most of the blame for the crisis, but government regulation, particularly Congress' delegation of monetary authority to the Federal Reserve company and the Sarbanes-Oxley Act of 2002, also deserves much of the blame. Now what do the politicians propose as a bipartisan remedy? More risky government spending and more government regulation!

The recent failure of Ameribank, the twelfth federally insured bank to fail this year, the failure of mega-mortgage companies Fannie Mae and Freddie Mac, the bankruptcy of investment company Lehman Brothers, the demise of Merryl Lynch, and the colossal failure of one of the largest insurance companies in the world, the American International Group (AIG) - all this would be traumatic enough without a government response that irresponsibly wastes taxpayer money and devalues the dollar,  

The $85 billion dollars bailout of AIG last week was a move so stupid that only a bureaucracy with no personal wealth invested could do it. With this move, the government is taking over a half-trillion dollars in worthless mortgages and other bad debt by failing institutions. And this, politicians are calling an investment? This is the largest intervention ever of the federal government into private industry. Fannie and Freddie will cost the taxpayers between $300 billion and one trillion dollars. (A trillion dollars, to put it into perspective, is the wealth of a million millionaires.) The taxpayers have also been forced pay $29 billion to take the risk for billions of dollars of bad investments by Bear Stearns. On September 24, Congress loaned $25 billion to "struggling U.S. automakers," a request that banks wouldn't touch because of its risk. This handout was endorsed by the Republican and Democratic presidential candidates. There was also over 2,322 pet projects tagged to the September 24th bill which totalling $650 billion dollars, designed to rape the taxpayers' bank accounts to help the incumbants get re-elected. The politicians from both classes continue to spend, spend, spend, deficit or no deficit.  

Our founders tried to prevent this kind of Communist intervention into the free market with the Tenth Article of the Constitution, which limits the central government to designated duties and gives all other obligations to the states or the people. Is there any constitutional authority for the federal government to take over private industry? No. These bailouts are unconstitutional and therefore unlawful.  

It's so easy to be risky with someone else's money. Imaging a weekend of gambling somebody else's millions in Las Vegas - wouldn't that be fun? If you lose the money, it wasn't yours anyway. Think about all the friends you could make by handing fistfulls of money to fellow-gamblers, and all of the carelessness they could exhibit since it was not their money they were gambling. How giddy with compassion our politicians and bureaucrats get with our money!  

Some of these failing companies, such as AIG, attempted to get private investors and banks to loan them the money they needed to stay afloat, but were unable. Why? They were not sufficiently profitable. Their investments were risky. Their income and equity could not sufficiently guarantee that the loans requested would be repaid. The books showed that they were unlikely to be able to pay their bills and keep their promises to investors. It was just too darn risky.  

Unable to get loans from banks and free investors, the free-market demanded that these companies liquidate assets in order for them to compete. The free market was demanding that AIG's CEOs and automaker executives cut their million dollar bonuses, sell unprofitable assets, lay off employees that were less profitable to business, and make dramatic cuts of employee benefits. Isn't that the fiscally responsible thing to do when your bills are greater than your income? Spend less, sell something, and get out of the red and back in the black, right?  

But the politicians and bureaucrats are more concerned with votes this year than they are with wasteful spending of the taxpayers' money, which sting won't be felt for many years, so they have something to gain in handing out billions of dollars to companies who could not get private investors to give them the money. Just look at how many people will remain employed and keep their homes as a result of the government bailouts of those failing companies! Aren't those politicians just so heroic and caring?  

We are naive if we actually expect those rescued by the government bailouts to actually keep their jobs. What wishful thinking! It took five days for a government bureaucracy to get water to the Superdome - do we actually think that bureaucrats can keep these companies afloat better than the executives in the private sector? The government just postponed the inevitable collapse, and made it much, much more costly for Americans.  

Now, the companies that are more fiscally responsible and, hence, are not struggling in the free market, will now be handicapped in the market by these competitors who are taxpayer-subsidized. Imagine McDonalds receiving hundreds of billions of dollars in taxpayer funds. How could Burker King and Wendy's compete? And McDonald's, unrestrained by the level playing field of the free market, will not liquidate to cut costs to survive in the free market, and so their administrative salaries and benefits will remain artificially elevated. The rule that determines which company survives is not who works the hardest, treats customers and employees the best, or who keeps income over debt, but it becomes the company that has the most political connections and effective lobbyists in Washington, D.C., legally plundering the taxpayers' treasury to keep their company heads above the competition.  

With $700 billion dollars of government bailouts this year, the state is made to look like the Savior, but it is a false Christ who offers heaven for nothing, makes promises it cannot keep, excuses carelessness and irresponsibility, fattens its friends at the expense of everyone else, enslaves our posterity, and diminishes our liberty. Just as the serpent offered Eve wisdom and power if she would only take of the forbidden fruit, the false Christ promises paradise without cost. However, the fantasy fades and the true cost will be realized when reality strikes, and unfortunately, our kids and grandkids will bear the brunt of it.  

When the media speaks of the taxpayers footing the bill, we really receive an inaccurate misrepresentation of what is really taking place. It's not as if the taxpayers' money is sitting in the bank account of the U.S. treasury. The U.S. treasury owes much more money than they receive. The taxpayers' treasury is in red, trillions of dollars in the red. The last three years, the Federal Reserve company has created over $4 trillion in new money out of absolutely nothing! Although this gives politicians the money they demand to spend in the immediate, it creates an obvious long-term problem for the rest of us: it devalues the dollars in our accounts. When these trillions of freshly printed bills flood the banking system, the money already in circulation - your paycheck - becomes worth even less. The Federal Reserve, at the behest of Congress' lust for overspending, creates inflation which means that prices rise and your weekly paycheck purchases less. Our 401K and our savings accounts, even if it grows over time, will actually buy less when we cash it in. For example, if our savings increases 20% over 20 years, but the dollar is able to purchase 25% less goods then than it does now, then we lose. This is the natural result of the inflation-causing money-printing scheme of the private company, the Federal Reserve.  

This government-sponsored inflation postpones the time when the taxpayers have to pay back, with interest, what previous generations of politicians overspent. When reality strikes and the bubble finally pops - and it will! - the politicians in office now won't be in office then, and so they won't be pressured to justify their incompetent decisions in order to get re-elected. Democrats and Republican majorities alike just want to spend their way to re-election and print money or borrow when they come up short, devaluating the dollar and our saving accounts as a result, without regard to balancing the budget, respecting our God-given right to enjoy the benefits of our own labor, or the freedom-threatening crisis they will bring upon our children and grandchildren.  

This is why fixing Medicare and Social Security, government scams with unfunded liabilities in the tens of trillions of dollars doomed to bankruptcy before our toddlers reach thirty-five, just isn't a high priority for those running for office. The bubble will pop when the con-artists' terms (and, for many of them, their lives) have expired! They are counting on us to not pay attention that they cannot afford to keep their promises without going deep into the red and raising taxes on our children and grandchildren to rates comparable to the Communist U.S.S.R. Think that's an overstatement? Listen this month to the politicians' calls for more regulation to rescue us from the greed of Wall Street. What will ever more regulation and centralized planning do to our economies and our financial liberty? It will bring us Communist economies like the former-U.S.S.R., China, North Korea, and Cuba, other nations enslaved by central planners. The politicians prescribe more of the Marxist poison that got us into this mess.  

The politicians have argued that the bailout is "the lesser of two evils." The bailout certainly postpones what we are due to reap, but sooner or later, we will reap what we sow. We sowed silver spoons for all, mortgages we cannot afford, and political candidates who either do not understand or who have no commitment to the Constitution or the laws of nature and nature's God upon which are freedoms are founded. The harvest is nearing. If you expire before it is reaped, your children will reap it with interest.  

The Word of God says that diligence, generosity, and having lots of children (Psalm 127-128) is the path to prosperity, but we have bowed to a different Savior, haven't we? The counterfeit Christ offers birth control, abortion of "unwanted children," and state-distributed retirement funds through Social Security. Rather than have large families to bring economic security in our retirement years, we want to take estrogen and tie our tubes, and trust in the Almighty government to care for us when we are old. We worship what we serve, my fellow Americans. We bow to the author of the standards by which we live.  

Keep playing your video games, watching your TV shows, eating your buffets, sending your kids to pagan schools, enjoying your government benefits, and continue to imagine that your children and grandchildren will be as free as you. Continue to let the talking heads hypnotize you into thinking that the two political parties offer an authentic choice. Pay no attention to that rapidly rising tsunami on the horizon that will drown our children under either administration's policies.  

The government must exploit our apathy and our lack of care for our posterity in order to count on our support for them election after election, and we have not disappointed them. The freedom of our children and grandchildren may be the cost for our gullibility and careless trust of the federal government's centralization of power. The most ominous symptom of our malady is not the federal government's careless violation of the Constitution, their fiscal irresponsibility, and their bi-partisan usurpation of our God-given right to enjoy and spend our own wealth as we wish, but our lack of concern over this betrayal and exploitation.  

We would do well to heed the words of Ben Franklin that appear on the pedestal of the Statue of Liberty: "They that can give up essential liberty to obtain a little safety deserve neither liberty nor safety."