October 1, 2008 — As members of both political parties have attempted to deal with the crisis on Wall Street and the federal bailout legislation, it's also important to realize what it may mean for average Oklahomans. Regardless of whether you support or oppose the bailout, and people can take either position in good faith, the legislation will impact the country for years to come.
Here's how: 1.The $700 billion will be borrowed. That will increase the federal deficit, which is likely to result in a raise in interest rates because when the government borrows more money it often has had the impact of increasing interest rates. Higher interest rates will make it more expensive to buy a house, which will likely slow down the construction and real estate market, meaning the bailout will not result in a quick fix.
2.At a time when the nation's infrastructure is crumbling and everyone agrees that roads and bridges need to be repaired and built; the $700 billion will make it more difficult to do so because the government will be less inclined to borrow even more money and increase the deficit further. This will leave the roads and bridges to continue deteriorating.
3.If health care is your issue, the chances that more coverage for the uninsured, elderly, or disabled will be provided is more remote for the same reason. The $700 billion spent on the bailout means existing programs will not receive new funding and the creation of new ones will be more difficult.
4.The No Child Left Behind legislation, which has been controversial because of the lack of funding, is almost certain to be inadequately funding because of the bailout. It means that program almost certainly continues to be an unfunded mandate on schools and that the possibility of expanding special education programs for special needs children is not going to occur. Once again, when the government borrows $700 billion that means there's less money available to be spent on schools.
5.If you would like to have a tax cut, the bailout makes it much more difficult to do so. Giving tax cuts with borrowed money is always questionable, but with the bailout coming from deficit spending it means tax cuts will either be off the table or paid for with borrowed money, which would only make the deficit greater.
So, just as it took several years and even World War II for the country to come out of the Great Depression, notwithstanding all of the governmental efforts that were made, so, too, will the existing crisis have an impact for years to come. There is a cost of doing nothing and there is a cost for doing something. To do nothing would potentially put the country at risk. We don't know.
The bailout legislation, however, is going to effectively limit the ability of the federal government to address other issues and it will impact not just those of us who are currently taxpayers, but our children and possibly our children's children. It's just one of the realities of the circumstance that the country faces regardless of your position on the bailout.
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