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A bailout package to rescue all of us
Daily Herald Editorial Board
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Published: 9/29/2008 12:13 AM

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Of all the glimmerings to draw from the economic rescue package that is expected to go before Congress today, we're most encouraged by this: At last some measure of bipartisanship on Capitol Hill.

If ever there were a time, as John McCain would say, for Democrats and Republicans to come together as Americans looking out for the good of the country, this is it. If they truly can finish this job without political interference or consideration, particularly in the heat of an election season, well, maybe we all shouldn't be quite so cynical after all.

The old axiom is, the devil's in the details, and that certainly will be so in this case. The package, $700 billion, is a lot of money, an intimidating sum. The skies in Washington will be raining money, and everybody will be carrying buckets, not umbrellas.

A lot that of that money could be siphoned off in one wasteful or inappropriate direction or another, particularly given the historic inefficiency of the government bureaucracy. So stringent oversight is essential.

The possibility of misappropriation is only one of the dangers inherent in this plan.

As some have accurately noted, the package in the end pulls the government in the disquieting direction of socialism, pure and simple. For a short time, at least, it would put the government squarely into the banking business.

As described by the Associated Press, the government would purchase mortgage-backed securities and other bad debts, providing money to help troubled lenders make new loans and keep credit lines open. The government would later try to sell the discounted loan packages and, presumably, that would protect the taxpayer, perhaps even turn a profit for us all.

Some money would be devoted to a program that would encourage holders of distressed mortgage-backed securities to keep them and buy government insurance to cover defaults.

The package also would place limits on executive compensation for companies participating in the program, an impulse that is natural for virtually all of us but that nonetheless constitutes a worrisome precedent of government interference in the marketplace.

Yes, there are significant dangers inherent in this historic "bailout."

Yet, all of that said, what is the alternative?

This has been described as a bailout of Wall Street. And yes, it will bail out banks and other investment companies that used poor and greedy judgment in mismanaging their businesses.

But this really is about Main Street. It's about every one of us, and not just those faced with foreclosure or monthly mortgage payments they cannot meet. It's about the likelihood of a monumental recession if something is not done.

If there is no money to lend, the economy of this country essentially comes to a halt, and that would hurt every single one of us.

We congratulate President Bush, Treasury Secretary Henry Paulson (Barrington's own hometown hero) and the Congress on their efforts to avert that calamity.