Financial Stabilization Is Worth the Bailout Burden
Oct 1st, 2008 | By Karim Rahemtulla | Category: Politics & EconomicsKarim Rahemtulla says a taxpayer bailout is preferable to the chaos that will ensue if it fails. By rejecting it, politicians would be condemning the electorate to soaring unemployment, a devastating credit squeeze and a lousy retirement.
More from Karin at Smart Profits Report:
I am dumbfounded. Those same naysayers who were clamoring “no bailout” will soon be clamoring for extended unemployment benefits. Either that, or they’ll wonder why they’re working an extra five years before they retire because of that “Depression Of 2009.”
I wasn’t alive during the Great Depression, but I know many who were. They still horde things today remembering how scarce everything was – even if you could afford it.
So let’s weigh the potential outcome. Yes, it’s quite simplistic, but it makes the point…
FINANCIAL STABILIZATION PACKAGE
NO STABILIZATION PACKAGE We pay an extra $2,300
We don’t pay an extra $2,300. But…
Unemployment shoots to 7% to 10%
Americans retire at 70, instead of 65 or earlier
Home prices plunge another 30%
The stock market falls 30% or more
Government Treasuries and CDs pay 2% or less
The list could go on. And all those who boldly said “no” to the stabilization package get to say at the end of it is, “Yeah, but we sure showed ‘em!”
I believe a stabilization package will pass – and soon. And personally, I’m willing to take on an extra $2,300 (which may or may not be paid back) versus an alternative that I know I don’t want.
But I guess there is a reason why Congress only has a 9% approval rating. They just don’t get it.
Source: Bailout: ‘Hey Buddy… Can You Spare $2,300?’
Karim Rahemtulla is one of the country's foremost specialists in options trading, and, along with Executive Director Julia Guth, a principal founder of Mt. Vernon Research, as well as the founder and editor of Strategic Income, The 400 Report and The Smart Profits Report. Over the past three years, his options strategies have cashed in winners more than 70% of the time. Karim is also an editor of Mt. Vernon Research's Xcelerated Profits Report, a monthly newsletter devoted to making money using the safest stock and option strategies to reap great returns. An internationally renowned options trader who's been dubbed a "Market Maven" by CNBC, Karim also sits on the Advisory Panel for The Oxford Club, and is a frequent contributor to The Oxford Club Communiqué. Karim was educated in England, Canada, and the U.S. and is fluent in several languages. He travels the world regularly to find the best investment opportunities for our members.
I hate to say it, but it seems like you’re the one who just doesn’t get it. There is no stopping the economy from coming back into balance- with or without a bailout. Supply and demand will reach equilibrium. Housing prices will fall, stocks will fall, unemployment will rise- all the painful things that pay the price of the excesses. The problem educated people have with the bailout is, they realize that printing money out of thin air is not a solution. Zimbabwe is trying to do that- see how it’s working out for them.