A few things have obviously changed in the last few days. The bailout was passed. It appears the biggest offenders are being rewarded substantially for their misdeeds. And some $100 billion in pork got pushed through.

That’s a great question, and one that no one in the media seems to be discussing.

The best alternative we have is to do nothing. It’s going to be bad if we do nothing. We’re going to have quite a pullback in the economy, and the stock market. We will most certainly go into a pretty bad recession which could last a year or two.

During that time, the economic deadwood will wash away. Market unjustified businesses will collapse and lots of people will indeed be out of a job. Since I work in the financial sector, this probably includes me.

What you will see during this time of economic “turmoil” is the dollar regaining its rightful place in the world. It will once again become the preferred currency to hold and buy. Investment will pour into this country, as it once did. People will see that the deadwood is gone, and what’s left is a strong, REAL economy based on solid and sound fundamentals, and not magic or “hope”.

This will likely spur a real economic boom, as opposed to the fake ones we have been seeing over the past decade or two. Real economic booms (like after WWII, Industrial Revolution, etc.) don’t bust. Economic laws are like physics. They cannot be changed, or altered by man regardless how much “hope” we have that we can affect “change”. Just like a rubber band, you can pull and stretch those laws. But just like a rubber band, the more you pull and stretch, the more it’s going to hurt WHEN it snaps back. It will always snap back.

In short, if we go for a “bailout” right now (and I’m sure we will have one by this weekend), we set ourselves up for a much harder fall down the road. Hyperinflation will occur, as it has every time any government has fired up their printing presses in the hopes to try and change economic law. They will kick this down the road a few years by passing a bailout. But remember, the more you stretch the laws, the harder it’s going to hurt when it breaks.

Regardless if you believe anything I say above (which is basically traditional Austrian Economic theory by Mises, Rothbard et al) keep in mind the things that Brad says in his post. If we somehow were able to wave a magic wand and fix this with no consequences, we have at least a half dozen more crises coming down the pipe that are going to require government spending (and printing) FAR, FAR beyond what they are talking about with this one.

It is good to see someone who thinks like I do, and to know that I am not alone

Congress is the warm water fueling this financial hurricane and they are poised to stoke it up even more.

You are spot-on about the root causes of the mortgage loan mess (federally subsidized insurance programs are also a root cause for the mass migration of Americans into hurricane prone coastal regions – we seem to enjoy underwriting foolish behavior.) I was just discussing this exact point yesterday with a real estate broker.

My family is already living in many of the ways you suggest.

I’ve long been a believer in minimizing debt and cutting out unnecessary spending. My wife and I take out cash for our living expenses every week so we don’t get into lazy spending habits with credit cards.

Your suggestions on learning new skills and bartering are also great habits in any economy. Unfortunately, my 401K doesn’t let me invest in gold (but they do have a real estate fund) and my smallish New York apartment doesn’t allow much room for stockpiling food.

Let’s hope that the worst of it isn’t as bad as we might fear…

Andrew Seltz
The Go-To Guy!
http://www.GoToGuyEnterprises.com

My wife has spent a lot of time lately thinking about what to do if the economy hits a rough spot. She’s been making a lot of her own products lately, and has talked about a few other items like getting a couple of chickens and starting a garden.

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And to even try for three times? That is considered enemy action. (see the Depression and S&L bailout for the first two)

Some good points here that i definitely agree with. To push this down the road a bit with some sort of “bailout” plan is to merely prolong, and strengthen the inevitable economic whiplash.