Great move, rejecting that bill yesterday. Upcoming reirees paid for the inaction by losing more than a trillion in retirement savings. Net loss to the average joe for doing nothing -- around half a trillion now (after factoring in the $700b in 'savings'). It'll get waaaay worse too. The ultimate cost of doing nothing may be that 7 or 8 out of 10 upcoming retirees will just have to work another 10 or 20 years to catch up to what they're losing. Or they'll have to reduce their quality of life by cutting out some frills, like eating.
But wiping out people with retirement savings is only a small part of what is likely to happen without some cash-infusing bill. Probably at LEAST a million businesses will go out of business. 10 million people or more will be thrown out of jobs (and won't be able to find a new job), so we'll have to fork out hundreds of billions to keep those people alive and doing something constructive rather than resorting to thievery or worse.
The people thrown out of their jobs (and virtually no job will be safe) will obviously be unable to make THEIR mortgage payments, so they will default, dragging down everyone's home prices and causing another wave of foreclosures. It's a self-reinforcing cycle if we don't break it by filling the gap in the credit markets.
If you already own a home, but want to sell it, you won't be able to without credit availability, unless you find someone rich who can pay cash for it. If you want to BUY a house, you won't be able to, unless you have the cash. Same for cars, and student loans, and small business payroll, and home improvement loans, and so on. Forget all of that. If you rent, your rent prices will climb, because when people can't buy houses, they MUST rent (or live in a tent), which drives up rental demand/prices.
So, we the people saved $700 billion. And what will doing nothing cost the fat cats: they'll retire with fifty million in the bank or whatever. Their quality of life won't change a bit. But what will happen to the normal joes if we don't reignite the credit markets? Well, people with jobs are screwed, people with homes they want to sell are screwed, people who want to own a home are screwed, people who need a loan for college are screwed, people who had planned to retire anytime in the next 10 years are really screwed, small businesses are screwed, and so on. In effect, everyone is screwed.
I think the cash infusion would have worked, and we didn't have to waste trillions of dollars worth of normal joes' money to "get" the fat cats, who aren't going to be affected no matter what we do or don't do. The ones who REALLY pay by us not passing that bill (or one like it) are everyone who ISN'T rich. Rich people don't need credit, or jobs, or retirement accounts, or mortgages -- the very things we are destroying by trying to make them pay. It's like confronting a robber. You shoot yourself in the leg and then yell at the robber, "Hah! Got you, sucker!" Uhhh, okay, sure. But who's the one who walks away without a limp?
The President is everywhere this morning talking about how dire it is that we pass the bailout.. ugh.. yeah, sure, the same people who got us into this mess, the same people who said a month or two ago that the economy was fine- now they're scaring everyone to get bills through (a bill that gives them more dictatorial powers btw and IMMUNITY from being prosecuted for anything associated with the economy) This bailout seriously is an economic version of the Patriot Act, and again, they're using scare tactics to try and get it through..
It's true the yuppies have no sense of the worth of a dollar.. 