Too big to fail?

I changed my mind; defense will have to wait.

Let me start this post by saying: I reject the notion of "too big to fail."

The Bush administration pushed through the TARP funds with the explanation that the collapse of the housing market was turning into a collapse of the banking industry, and these two segments of our economy were collectively too big to fail.

Nonsense.

It sounded good, and a lot of people were convinced. I, at the time, agreed that the collapse of the housing market plus the failure of the country's biggest banks was a recipe for Depression-with-a-capital-D. I didn't, however, think that TARP was a good idea, even then. The idea was that we would lend this money to the banks and then, when they were back on their feet, they'd pay the money back -- with interest! And then the government would use that money to pay down the deficit! And if you believe that, I have a lovely five acre plot of land on the island of Atlantis to sell you.

What really happened? Well, the banks got back on their feet (although they did so by taking TARP funds and then refusing to lend out any money, so the housing market fell even further and small business owners were up a creek; this is what happens when the government hands out billions of dollars with NO RESTRICTIONS on its use) and paid the money back to the government: $45 billion from Bank of America, $25 billion from JP Morgan Chase, a total of $116 billion repaid. It's a miracle! Now it's time for the government to pay down the deficit with the repaid TARP funds, right? Right?

Does anyone else hear crickets?

Oh, shocking! President Obama announced on December 8, 2009 that the TARP funds (an estimated $200 billion, which leaves us something like $84 billion short, given the repayment numbers) will now be used to stimulate job growth, including money for green jobs and alternative energy technologies. Wait, wait, wait. Hold up. Isn't that what the stimulus packages were for?

Note to the federal government: STOP SPENDING MY MONEY. The deficit is currently so high that it's the equivalent of $111,000 for each tax paying citizen in this country. If I ran my personal finances the way the federal government runs the nation's finances, I would be left with no choice but to drop off the grid and hope my creditors never found me, because there would be no way I could ever dig out of the hole. And the government would let me go under, because I'm not too big to fail. Furthermore: they should let me go under. They should ship me off to debtor's prison and throw away the key, because MY extreme irresponsibility should be MY problem, not the nation's. (For the record: I am not extremely irresponsible; our mortgages, car payments and student loans are our only outstanding debt. That sounds like a lot, and it is a lot, but my point is: no credit card debt or personal loans.)

Well, I believe in capitalism and the free market. These principals have served our country pretty well over the past 200+ years. No other country in the course of the world's history has gone from not existing to being the most powerful, richest country in the world in the span of less than 200 years. And how did we do it? We allowed companies to compete with each other -- in fact, we enacted antitrust legislation to force competition -- and let those who couldn't hack it go out of business. We followed a Constitution drafted by some of the greatest thinkers that ever lived, which clearly laid out what the federal government could -- and more importantly could NOT -- take under their auspices. In short, we lived like capitalists.

That's the opposite of what's happening today. Today, the government is directly running the automobile industry in this country, putting salary caps (and levying punitive taxes on bonuses up to 90%) on highly paid individuals, bailing out businesses who failed to be responsible with their capital, and attempting to take over the health care industry as well. None of these things are Constitutional, and Congress is deaf to the public outcry.