What is the Long Term Economic Impact of the Bailouts and other Federal Spending?

Several months ago, the United States economy struggled through weeks of turmoil as corporate giant Lehman Brothers followed Bear Stearns in closing shop due to ill advised investment strategies. Mammoth organizations, once thought unshakable, were suddenly becoming unviable as they became insolvent. But when organizations seen as critical to the U.S. economy began to buckle, such as AIG and The Hartford, panic set in.

In response to this crisis the federal government issued over a trillion dollars to banks, insurance companies and other qualified institutions within specific industries. The rational behind the feds effort to “inject liquidity” into the economy was to solidify institutions that were “too big to fail.” In other words: let’s delay painful economic consequences by engaging in the same activity which caused the problems. The crisis was caused by pretending value exists when in fact it didn’t – printing more dollar bills at the Fed doesn’t create value, it only dilutes the dollar and creates inflation.

As the national debt’s stratospheric amount equals near a dollar amount close to the entire US gross domestic product, it’s apparently a “perfect” time to initiate health reform which carries a price tag in the trillions of dollars. Like the opinion reflected in the article sets forth below – this spending is not only economically irresponsible, it’s reckless. Perhaps somebody can give me hope that notwithstanding the aforementioned facts that America can remain an economic power going forward. The article referred to in this blog can be found here: www.americanbankingnews.com/2009/08/30/will-business-and-banking-bailouts-kill-the-american-economy/