Bailout Denied - Significant Consequences Likely

Congress has just rejected the economic stimulus package. They were afraid for their jobs. They did not want to pass a that could be deemed to bailout wealthy Wall Streeters and investors just some five weeks before an election. While they want to keep their jobs, they have failed to realize that everybody else would also share that sentiment, and probably won't be able to now.

The market is forecasting the future with its big loss today. Needless to say, the consequences of this action are real and they are serious. First, we can expect a slew of bank failures over the next week or two. We will see bank runs like those at Washington Mutual and Wachovia. These banks will not be able to sell their assets to raise cash, and they will fail. Credit markets will remain locked up, affecting the ability of large borrowers and small borrowers alike to expand businssses or buy a car.

Awll sorts of economic action will be affected. Layoffs will increase, house prices will decline steeply, small businesses will fail, restaurants will close, etc.

Ask you kids for their history books - then look at the pictures from the Great Depression in 1929. That's where Congress has led us.

I always thought that we were going to go back to the stone ages, but I fear that the Islamic extremists were going to send us there. Bush protected us from them, but he couldn't protect us from the Republicans in Congress.

Whoever thought that our own Congress would cut off their noses to spite their faces. They were warned. They did it anyway.