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Main Street gets government help too

Andrew Samwick

TEXT OF COMMENTARY

Kai Ryssdal: Seventy-two hours later, it's not like people are less angry about the Wall Street rescue package. Or in the vernacular -- the bailout. Helping Wall Street with Main Street's money. Maybe the events of the last few days have persuaded more people that we're all in this together. And anyway, commentator and economist Andrew Samwick says Main Street's been getting its fair share of help all along.


Andrew Samwick: We're hearing more about the virtues of Main Street and the vices of Wall Street during the current financial market meltdown. Now it's true that once-respected financial institutions have turned themselves into dens of greed, corruption, and incompetence. But Main Street has been leading a life that is far from virtuous, and the federal government has been bailing it out for years.

Consider the so-called stimulus package passed in January. The largest part of that legislation mailed $600 rebate checks to low- and moderate-income households. The government didn't raise taxes elsewhere to fund these checks. So, at best, private debts went down by about a hundred billion dollars while public debts went up by the same amount.

But when we apply these principles to financial institutions, we call it a bailout.

Since the sweet spot of the Internet bubble a decade ago, the federal government has run annual budget deficits rather than raising taxes to pay for its spending. The American reaction to higher income has been to boost consumption. Were deficits not such an easy option, public or private spending -- or both -- would have been lower. This is really no different than an explicit bailout -- we have moved our debt to someone else's account.

Who is the mysterious financier who has been bankrolling our binges? People like to point the finger at the Chinese or other foreign investors who have purchased the government debt resulting from budget deficits. But these investors will eventually be repaid from future tax revenue.

Ultimately, it is future generations of taxpayers who will be left to pick up the check for our consumption binge. Even before Bear Stearns collapsed, our children were going to finance the bailout of the excesses of Main Street.

Ryssdal: Andrew Samwick is a professor of economics at Dartmouth College. He used to be the chief economist for the president's Council of Economic Advisors.

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A NATIONAL GARDEN WITHOUT GREED

A healthy National Garden needs good seeds, good earth, and proper fertilization, the solution is not to give funds to the bad fruit that have already grown into the corruptions we have witnessed, but to invest in a new base idea at the main street level, the people of heart that are in despair. Start with two individuals with simply new ideas, keep it simple.
This individual will not be effected by sponsorship, nor over powered by any laws, nor involved with lobbyist, or persuasion of any type. Once this clean new power is developed, the National Garden will flourish.

However, the second individual should have power by governing to assure integrity for the purpose oversight to re assign a replacement upon self retirement only.

As a seed starts in the beginning of growth and spreads its roots among the Nation. The wealth in Nation will over come the process of elimination of bad fruit. Congress needs to secretly appoint an individual to hand out funds in a person to person bases, in the solemn trust, on main street, for small businesses.

Laws must be created to outlaw corporate existence.

Stop all franchising, sub lets, and businesses that exceed profit amounts that shock the conscience of the People of the United States. They have failed and need to be removed from the books.

Should an existing business go out of business, then nothing should be allowed by the tax payer to "rescue" anyone, just note that the business is a failure and business schooling is required to enhance the future of the company or future company, if pursued.

This type of decision will assure the companies full conscious decisions in the future to be keen and for the benefit of the nation.
Imports and exports will be scrutinized for long life product qualities, integrity, and honest monetary dealings.

Once an individual reaches a set savings, 1 million dollars for every household member. the business must be given to the next family with the same member count. (the true meaning of supply and demand): Should a family adoption occur a million dollars will be added for the support of each adopted member added.

This will negate the greed of certain type individuals the have ruined this great country. Laws have been made under duress, by the buddies of these corrupted entities.

If I was given 700 Billion Dollars for MAIN STREET it would not be given to the same sharks that have taken this country by storm.

Mr. Samwick's claim that "Main Street" got greedy and lived beyond its means, just like Wall Street, is fatally flawed. "Main Street" incomes: those for low and moderate income Americans, has gone down in the past 20 years; and quite precipitously in the past 8. Those in the highest brackets: like those banker CEOs who ran their companies into the ground and want the gov't to bail them out, have skyrocketed.

I was appalled by the comments of Mr. Samwick but not surprised by his association with the Bush Administration. It is failed economic thinking as presented in this piece that shows exactly how our government has gotten into this mess. I love how Mr. Samwick boils the mess down to one or two components when in reality there are more like 20 or more. An institutional economist, I understand that the economy is a complex system. Neoclassical economist usually discount the role of institutions such as government in our economy.

Who exactly does Mr. Samwick think will pay for these deficits in the future, Wall Street? I doubt it and when Main Street has to step up I would not consider that to be much of a bailout. What the government is conducting is inter-generational injustice or more appropriately, tyranny. Given that most of the executives on Wall Street have already gotten their money and the bankers are definitely going to get theirs in the bailout it will be the children of Main Street, including mine, who pay for the failed economic policies of our government.

I agree that Main Street has been overextending itself but let us ask why? Easy credit, need for new places to put money for investments leading to the creation of loans that never should have been made and the desire to sell more and more goods. Combine that with a poor education system that rarely teaches us about finances and the economy. Not a good combination for those on Main Street.

Wow, that's one hell of a Main Street bailout. The government was worried about a slow economy and gives "Main St." $600 and urges us to spend this money. Even if your money didn't go to increased gas prices, higher food costs, mortgage payments, even if you put your money in the bank... Then the goverment decides to take saddle you with possibly two to three times what they gave you so they can bailout the people partly responsible for the "economic slowdown" in the first place.

Explain how Main St. was bailed out again? We didn't ask for $600 dollars. The only people the government was trying to help was itself and it's equally ridiculous idea that this would jump start anything, while the financial institutions with all this debt accruing just kept silent.

I'm sorry but Mr. Samwick failed with his role as chief economist and with today's commentary.

I somewhat agree with the concept that main street has been perfectly willing to turn a blind eye to irresponsible government spending. However, if your not an economist and you hear Dick Chaney say something to like "Ronald Regan proved that deficets don't matter"; then you believe him because he is telling you what you want to hear. Back in 2003, I was sharing an office two men who had gotten into the habit of listening to Sean Hanidy on the radio each day. Day after day I listened to Mr. Hanidy go on and on about how Amirica is the richest country in the world, and that other nations only criticized our lifestyle because they were jelous of our success. Day after day, week after week, "WE ARE THE RICHEST COUNTRY IN THE WORLD"! If you don't know any better, you begin to believe that it is your right as an American to have the most toys. I'm sure that there are a lot of Sean Hanidy listeners out there sitting on the curb of what used to be thier McMansion saying to themselves "what was I thinking"!

Unbelievable comparison. I pay allot more in taxes than $600, and the deficit we are in is more to do with Iraq and the failure of Bush to fund it. $600 doesn't bail me out of anything. How much in taxes does Goldman Sacks pay? And they get a reward for mismanagement on the scale with the war in Iraq! Too much.

Ok, I was driving along I-5 when this commentary came up via KPCC. I can not believe the audacity of the comparison between the bail out between Wall St and Main St.

Let's calculate the real number, shall we?
Pennsylvania Ave - 3T wasted on bailing out of the 51st state (Iraq).
Wall St - 700B (1st installment of many to come) + 85B AIG bail out + Lehman + ... = 900B
Main St - 100B for the stimulus package (1-2008) + 180B (supplement of 700B Wall St bail out) = 280B

Man ... Talk about progressive bail out. Me? Receive 0 dollar so far. This pisses me off, I haven't been bailed off, yet I am part of Main St.

What kind of balls does it take to compare the $600 dollars that about 1.7 million households received to the continuing give away of billions of dollars to a group of morally broken people and institutions?

You want to know why we have record dept. We can start back at the S & L give away under Reagan, then go to the tax breaks for the wealthy like the oil companies and a war were billions of dollars just go missing so Bush and Cheney’s buddies and can take us all for a ride. Now we are giving trillions to these very same disgusting people. You want to know what is causing the dept that children will be paying for decades if not longer you smug little weasel? Look in the mirror.

Why was I not surprised to hear that this man was one of Bush's economic advisors? One hundred billion in stimulus doesn't compare to what will likely end up being over a trillion in Wall Street aid. And what's worse, no one is talking about how the gap between the rich and poor is the largest since just before the economy's last major collapse. Supply-side economics isn't just useless, it's destructive.

This commentary was not only ludicrous, but insulting. By Mr. Samwick's logic, if a mugger takes my wallet at gunpoint, then hands me back one of my own $5 bills, I should consider -THAT- a bailout too. The government was not at fault for "not raising taxes" to pay for that, the government is at fault for its profligate spending and lack of accountability.

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