One Clear Dot

The good news about the new version of the financial bail-out that passed in the Senate yesterday is that is allows for FDIC insurance caps to temporarily go up from $100,000 to $250,000. Not that I’m personally impacted. The 100k had me covered, but I think it gives a lot of people out here living regular lives more of a sense of security when it comes to keeping our money in the bank.

Another additional that a lot of “every man” types might like is the extension of the expiring deduction of state and local sales taxes on federal returns. Of course, that’s another tidbit that does not impact me – Florida does not take state income taxes and I do not have local taxes where I live.

There are tiny issues, though, in light of what the bail-out really accomplishes. In a nutshell, the government has agrees to let financial institutions sell them troubled assets, mostly mortgage-related. Yes, our government is going to buy the stupid mistakes made by private businesses. The businesses are getting quite a deal – finding a buyer for their irresponsible business dealings. And, in the end, it will be the common taxpayer who has to add a little more to the pot via higher taxes. Don’t let the politicians fool you – it’s the middle American who will feel the pinch when all of this is over.

Middle income Americans are not the ones who will be saved from foreclosure. We will be expected to keep paying our mortgages, no mater how difficult that might be. If we cannot, we will lose our homes. In the meantime, people who had no business buying homes (or at least home that cost so much) will find relief from their economic nightmares and still get to keep said homes. The Looney mortgage companies who were willing to give a loan to every cretin who could slide through their doors will stay in business. Yes, a lot of people will win with this new bill, but it won’t be the average American.

Posted on October 2nd, 2008 by onecleardot
Filed under: Finance