Financial bailout to the rescue…eventually

We are anxiously awaiting Congress’s decision on whether or not they will spend $700 billion on an economic bailout plan. I am not going to spend this time debating the merits of the plan. In fact, I have a great deal of mixed feelings in regards to this bailout plan. My biggest beef is that Henry Paulson will instantly become the most powerful man on the planet. That makes me uncomfortable. But I digress…

Here is the message that I feel is important for people to understand. If the bailout is approved, then THAT DOESN’T MEAN THAT THE ECONOMY WILL INSTANTLY TURN AROUND. We are still in a very bad place. The financial industry meltdown was caused by many factors, and many of the factors persist. Don’t be fooled by this bailout. The bailout is meant to stop the problem from getting worse. We still have a long way to go to get better. This bailout will instill short term confidence in the stock market, but the market will eventually find its way back to its appropriate level. I have a pea-sized brain so let me use an analogy here. Let’s say that the sprinkler system at your office building starts spraying water all over the office for a number of hours. Everyone is panicking because water is ruining all the furniture, carpet, and electronics. The fire department comes to your office and shuts down the water after it has been spraying for 5 hours. Well the water has stopped, but there is a ton of clean up left. That is where we will be folks after the bailout. The water will have stopped, but our chairs will be wet. But, eventually things will be just fine. Just be patient. By the way, sitting in a wet chair isn’t very fun.

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