They're going to have an even bigger mess if we keep having bailouts, instead of just taking the hit now.
“They’re going to have an even bigger mess if we keep having bailouts, instead of just taking the hit now.”
ABSOLUTELY. It’s already going to be a nightmare...if we keep juicing things, it only gets worse. These past 4 years GUARANTEE that our fall will be incredibly vicious.
So what to do? We can control the dive if we tax ourselves to meet our spending demands. This means HUGE tax increases on the middle and lower classes. Those people will pay it, mostly. For example, if the federal tax were increased by a factor of 10, to $2.00 per gallon, people WILL still drive, and drive a lot. Yes, there will be a drop off in driving, and shipping costs will go up - so the government will not get 10 times the revenue, but they will likely get something like 7 times the revenue (or $150B per year). Same with a VAT (except more like $400B). Same with expiration of Bush’s tax cuts (at least $200B per year). Yes, the economy will dive - but that will only indicate that we’re starting to (again) live reasonably close to our spending levels.
The other option is to overhaul Social Security and Medicare. Make them means-tested, and REQUIRE children that have enough money to help pay for their parents (who otherwise would not have money). Only after those sources are exhausted would the government step in and provide a subsistence level of living. Since that will never happen, this option is hopeless.