We have been hearing a lot in the news lately concerning the use of Taxpayer money to bailout failed financial institutions.  On the surface this may seem ludicrious to see mis managed companies receiving tax money.  When you look further into it, however, you will realize that the amount that is being offered is less than what is spent on a country thousands of miles away which has no effect on you and the purchases you make today. 

Let’s look at several scenarios.

Scenario #1  The government does not provide support funds to the banking industry and some of the banks fail, while others buy them out making larger conglamerate banks and fewer to compete.  Instead of being able to “shop” for the best deal in mortgages or loans or even savings accounts you will have the choice of only a few.  Your interest rate will rise, if it hasn’t already, to pay for the bad debts that were issued.  The oil industry is in that situation now.  There are only a handful of refineries and all the gasoline comes from them.  they are reaping the profits of “passing along the cost of oil”.  Do we want this in the financial world as well?  I don’t think so….

Scenario #2 - The government buys the risky loans. (the ones that should not have been granted in the first place, but were allowed due to lack of regulation)  The amount is spread out over several years, money is paid back by the debtors, since everyone is not defaulting, just late. The financial world does not have to recover the loss, so your credit limit and interest rates stay stable.  The economy continues on.  No matter how you look at it, the public is going to “PAY THE PRICE” for the failures. 

Which way is better?  You chose!!!!!!!!!