Friday, October 3, 2008

Stop the meltdown


If the U.S. House again nixes a $700 billion rescue of the U.S. financial structure for the same inane reasons as Monday's thumbs-down, calamity will spread.

The crucial vote is today. Instead of a three-page Treasury plan, the new proposal is more than 400 pages, attached, perhaps fittingly with a touch of mocking satire, to the "Paul Wellstone Mental Health and Addiction Equity Act of 2007," containing new ground rules for paying mental health bills, containing another $1.7 billion in goodies to satisfy congressmen and named after the late U.S. senator who died in a 2002 air crash.

Some intractable opponents still denounce any rescue as "socialism."

However, there's reality. Businesses large and small are finding it tough to obtain credit needed to operate and to employ people who pay for mortgages and household budgets. Tighter credit means consumers can't finance new cars and appliances, leading to business failures.

One painful example of the ripple effect was news that stunned 1,000 U.S. colleges and private schools this week. The $9.3 billion Short Term Fund into which they put cash for investments was shut down. Schools were informed they could withdraw only 57 percent of their deposits, the rest over time until 2011.

If the House vetoes the plan again, even good businesses may fail as funds for operations dry up. Banks will go, too.

Congress was derelict in enabling the financial community to play fast and loose with investment schemes.

Now Congress must speedily authorize remedies for mistakes it made—or everyone, not just the greedy or guilty, will suffer unimaginable consequences.




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