Saturday, October 04, 2008
No Interest Until Bankrupt
Saturday morning mail was full of the usual store ads in addition to the pre-Christmas charity requests. I keep hearing that the credit market is tight, so it was amusing to find a credit card offer, no interest until 2010 with a line of credit to 30K dollars. Heading for the shredder I glanced at the return address-WaMu-and I realize that I am being offered cash by a bankrupt entity. The political pundits have assured me that without this bailout, credit markets would freeze and businesses across the US would grind to a halt. I am not naive, my partner owns a small business, I know about cash flow. For larger corporations, I know that cash on hand determines their bond ratings and that sort of thing. I am well aware that money makes the world go round. I just don't believe that a 700 billion dollar taxpayer financed bailout is going to improve the economy so long as Americans continue to spend money they don't really have on things they don't really need. Banks have been happy to finance our shopping spree these past fifteen years and perhaps they too think that we can continue with all this deficit spending. I am not surprised. So does the federal government.