On the other hand IT WILL hamper the ability of the government to borrow funds in the future when people are in trouble.

In fact the only way I can really see one ascribing to the bailout is IF one were to subscribe to the idea that increasing federal debt is a kind of ’starve the beast’ agenda designed to ultimately force fiscal discipline by pushing the US government closer to a default ‘end game’…. I realize some fiscal conservatives believe this; I reject the approach as immoral.

Notice that the CBO’s own projections suggest we are accelerating towards this ‘end game’ of US federal insolvency faster and faster. (The Federal Reserve has already said we are moving towards insolvency fast– not even including the unfunded $55 Trillion Medicare liability) And then realize these projections are based on the overly rosy assumption that federal tax receipts will continue to increase- an assumption I think everyone can agree is wildly optimistic at best (California is learning this fallacy right now).

FYI- even if the US stops ALL activities in Iraq and Afghanistan tomorrow (est. annual savings $185-200 billion/year), the US government will still run a deficit… I suspect our deficits will be MUCH larger than these projections with dropping tax receipts from increasing unemployment/falling asset prices and increasing entitlement spending.

Personally, I think we have passed the tipping point and after the US dollar carry trade unwinds, foreigners will increasingly realize that the US population is politically unable to make the tough rationing choices needed to prevent a cross boarder capital flight- California’s inability to reach a budget compromise is but one example of what I think will increasingly be played out all over the country… remember American foreign borrowing as a % of GDP is likely to INCREASE if we do not make tough choices soon.

And if we do not cut unproductive uses of capital and unproductive uses of tax revenues (the combined state, local and federal government represent almost 50% of all economic activity in America), but instead continue to focus tax dollars on preventing human suffering- at first interest rates will increase as we try to persuade foreigners to lend us money (of course this will further contract the economy as productive capital is crowded out for unproductive ‘compassionate’ capital) but eventually, our dollar will collapse. And when that happens, our suffering will be just like Argentina’s in 2001.

We can pay now or pay later but (imo) either way we will pay.

The truth is many people do not share this value. And while I am sure others care about their kids and grandkids, I know of people who have chosen a new car (on credit) vs. paying for their child’s college education. It is simply their values.

Many people ARE NOT willing to accept pain now for reward later- even if they say otherwise when you ask them.

Someone better figure out how to solve the tragedy of the commons here in a multicultural society or….??? Well, who really can predict the future?

Your premise is essentially the same as mine, although mine is stripped of the eloquence, satire and Fey/Palin worthy parody.

Wall Street would have stampeded sooner or later. The people are waking up that they’ve already been robbed and their last remaining commodity is their vote, and so they’re talking and demanding.

More please.

I agree that any equitable rationing plan needs to begin with a clear and well established statement of the principles by which rationing decisions will be made. I have discussed this at length in my book, and have even proposed a fundamental statement of ethics for rationing. If you don’t want to read my book, I have posted a reasonably complete outline of my proposal on my other website. Her’s a direct link to the relevant page: http://guthealthcare.com/fixing-it/how_to_ration_healthcare.html

Rich

I would like to add that the combination of Medicare price controls and high inflation may cause the Medicare system to stop functioning, at least for some specialties. If inflation is high enough, this could occur within a year or two. The public and our hopelessly corrupt and incompetent government assume that as long as doctors are seeing patients, everything is fine. But physicians know that a crisis is coming, and they should think about how they will deal with it.