Today, the House Republicans torpedoed a financial sector bailout that would've cost the American people $700 billion. I have mixed feelings on this. While I detest seeing the value of my 401K and other investments hurtling down in value, I don't like the idea of a government bailout bill of this magnitude.
Considering the cost of the War on Terrorism and if Barack Obama becomes President, the potential cost of a universal healthcare bill, a $700 billion bailout seems unaffordable, without new revenue streams (i.e. income tax hikes) being proposed by the Democrats. At some point, there needs to be some fiscal responsibility coming from the Legislative and Executive branches of our federal government. It was the House Republicans who fired the first shot across the bow that they would not betray their conservative roots.
While confidence in the markets is shaky at best, a bailout would've meant another step toward socialism. If we are truly a capitalist nation, we need to allow poor performing companies to fail.
Although the Dow Jones, the NASDAQ, and S&P look ugly right now, I believe in the next 6-8 months, these losses will all be regained and beyond. Despite the confidence crisis in the markets, now may be a great time to buy low on stocks and beef up your portfolio with some bargains.
The U.S. market and economy overcame the unprecedented 2001 terrorist attacks that crippled our nation with fear for six months. We can certainly overcome bank failures. The United States of America is a strong, resilient nation and we shall overcome adversity once again.