Sunday, June 21, 2009

Drop Dead California!

Will the Federal Government now bail out failing state economies?

We have a disturbing trend developing in the country. Companies starting with Fannie Mae and Freddie Mac, our financial industries, and lately our automotive industry have been proven to be grossly mismanaged and an unbearable burden on our economy. We desperately need these institutions to liquidate and free up their capital so that the market can adjust. Instead we have been told time and time again that these companies are 'too big to fail'. So we have handed these failing, mismanaged companies hundreds of billions of borrowed dollars with the misled idea that they will somehow become profitable enterprises. These companies are rather 'too big to bail out' and if we don't realize this soon they may drag the entire country down the drain with them.

When will we realize that this money doesn't exist? We don't have a big pot of money to hand out to these failing institutions. The federal government is piling up so much debt right now to fund our own bloated budget, our bail outs, and government stimulus packages that only a fool would believe that we will pay it off. How much longer are other countries going to be stupid enough to lend to us?

Our government is like our crazy drunk uncle who is always getting involved in Ponzi schemes. Not only has he squandered his own fortune but he is in debt to his eyeballs. The problem is, our insane, inebriated uncle has the PIN number to our savings account and is funding his schemes with your and my money and future. When will the public reject this?

California needs to make massive cuts right now to become a functional government. Borrowing money to bail out California would be even more disastrous because it would set a precedent to other states who are sure to require cuts in this environment also.