Posted by
dieneces on Friday, September 26, 2008 5:26:01 PM
Jim DeMint, SC's Jr. Senator, has made some very elegant arguments against the Paulson-Bush bail-out. He made three points that are worth considering. First, along with many economists, he questions whether this action is merely a band-aid that will bear ill effects in the long-run(1).
Second, he explains how this bail-out is largely politically motivated: he said that the China, the US's biggest banker, contacted the Bush administration and told them that if this crisis continues they will turn the spighot off. If you take DeMint at his word, this would be quite alarming to many beaurocrats.
Third, DeMint proposed another way to stimulate the economy - deeply cut the corporate and capital-gains rate. To this point, there is much objection; critics say that it's this 'voo-doo', supply-side economics that created this situation in the first place (which is utterly false). To them, I make one simple point: an investment that yields 3% APR would end up yielding over 25%+ if both taxes were suspended. Similarly, if an investment was losing 3% of its value per year, that would be conmpletely turned around to the tune of a 19%+ gain. Imagine what that would do for jobs, expeditures, etc
Of all our federal representatives, he has been most clear-minded and honest that I've heard on this matter. This is one man about whom South Carolinians can be proud.
1- http://online.wsj.com/article/SB122238888884077341.html