The biggest financial bailout in history hangs in the balance today as House Republicans and Democrats lock horns over the small print.

Keith Fitz-Gerald says the political posturing and wrangling over the plan distracts from the key financial issues. Can America afford a $700 billion rescue package?

Keith says investors need to understand three keys points. A bailout will cause national debt to climb, the US inflation rate to soar and the US dollar to tank. Bottom line: Investors need to go overseas for growth and profits in the foreseeable future.

This from Money Morning USA:

Even in its revised form, the consequences will hang over us for years, and that means this is no time for investors to be speculating, nor is it time to put the proverbial “pedal to the metal.”

However, it is time to think about the following:

• Virtually any bailout plan – regardless of its format - will ultimately saddle the incoming president and the American people with trillions of dollars in debt that will actually dwarf the U.S. economy’s actual output as measured by gross domestic product (GDP). This means that investors must plan for much-higher interest rates – rates that are so high, in fact, that they could easily choke off U.S. growth well into next year.

• The dilutive effect of $700 billion – not to mention the additional trillions of dollars that still are not recognized as “problem assets” – will be extreme. U.S. inflation could spike overnight. And the U.S. dollar has a higher-probability than not of cratering from here. (We hope we’re wrong on this point, incidentally, but we’re not optimistic). This reinforces the investment case for commodities, in general, to begin moving far higher as we have suggested for some time, now.

• At the same time, global growth will continue. In fact, in the years to come, the world’s healthiest overseas markets could more than make up for the unmitigated disaster that America has become lately.

The bottom line is this: For the foreseeable future, global investing is the way to go.

We can make the case that things will improve in the United States one day and we’ll welcome the market’s return to normal.

In the meantime, however, more than 78% of the world’s economic activity is taking place outside U.S. borders. And that’s worth noting. According to International Monetary Fund (IMF) reports, China’s on track for 9.8% growth this year, and at least 9% in 2009. Taiwan and Brazil are projected to advance at rates of 4.3% and 4.8%, respectively.

So, it only makes sense to “follow the money,” even if we can’t pronounce where that money is going. Not only are the companies in many often-overlooked regions stable, many still are growing at double-digit rates.

For those of us who are north of 50 or closing in on retirement, it’s important to note that many of these stocks pay dividends that dwarf the anemic 2.5% average payout of a U.S. Standard & Poor’s 500 company. For instance, companies in New Zealand routinely pay dividends averaging more than 8%. Taiwanese stocks commonly feature dividend yields of 5% or more. Many pay even higher amounts.

We’ve repeatedly talked about how much of a difference dividends can make in your portfolio. But for you speed readers out there, here’s an investing fast fact: If you invest $50,000 in a U.S. stock paying 2.5% a year, you’d accumulate $64,000 in 10 years (excluding capital gains).

That’s a 28% increase based on dividends alone.

But that same $50,000 invested in a New Zealand exporter (with an 8.6% dividend yield) would leave you with $114,000 – a return of 128%, from the income alone. In short, by picking a stock with a superior dividend payout, you ended up with 78% more money over that decade-long stretch.

And that’s worth something these days – even if our own dollar might not be.

Source: Although Congress Squelches the “Paulson Plan” it’s Still $700 Billion to You and Me