TOO BIG TO FAIL?

When do we stop using taxpayer’s money to save financial institutions that made bad decisions?

In today’s American, the one thing you can expect from Government, is if you are a big company that took unnecessary risk and gambled with people’s money and lives, then you will be rewarded with bailouts – so far over $ 3.5 Trillion worth of bailouts.

Tallying up the "true" cost of the bailout is difficult, and won't be known for months if not years. But considering $3.5 trillion is about 25% of the U.S. economy ($13.8 trillion in 2007) and the U.S. deficit may hit $1 trillion in fiscal 2009; hyperinflation and/or sharply higher interest rates seem likely outcomes down the road.

At the very least, the possibility of the U.S. losing its vaunted AAA credit rating - which determines the Treasury's borrowing costs - cannot be discounted.

As Americans and global champions of choice; hoping to make a difference in world politics, we should be asking when is it going to be enough? When do we stop helping institutions that are playing a part in our demise?

A great part of our history has taught us that we are a nation that was built on taking responsibility, standing accountable and always being the beacon for better decisions than those around us. For that reason it is incomprehensible to allow financial institutions (who have got us in this mess) to dictate the direction this country and world should take.

Last week, CIT was on the brink of collapse. The financial lender, which had already received $2.33 Billion of TARP, was refused another lifeline from the Government. A $3 Billion rescue from its debt-holders may still not be enough to prevent bankruptcy. What is interesting in all of this is the fact that the Government decided CIT was big enough to fail - whereas Wall Street institutions, which hold toxic debt from mortgages, credit default swaps and collateralized debt obligations, had to be rescued. CIT, which finances American businesses despite its failures, does not hold the above toxic debts.

I do not think we should have another taxpayer bailout for CIT, but I do see the discrepancy between one organization and another. It appears that the Government want to throw taxpayer money at the top tier of companies, who in turn award their failed leadership with bonuses.

This terrible disconnect is hurting the hard-working American businessperson and dividing a country into those that deserve Government assistance and those that have to learn to fen for themselves. The average American feels a disincentive to work when he sees people getting rewarded for failure at his expense.