The Credit Industry Is to Receive $800 Billion in Payday Loans

Even giants such as the mortgage industry and other areas of consumer credit such as the credit card companies, student loan foundations, and the auto industry need payday loans this year. There is an $800 billion bailout plan for them to use as capital after the $700 billion bailout of Wall Street after their massive failure to manage their companies’ business responsibility.

It seems as though it is really unfair to do this, especially after the near collapse of the American economy over the last few months, and it seems the government is willing to give some emergency cash to them instead of the American people, in keeping with the theory of supply side economics, which has been a hallmark policy of the last thirty years. It has its critics, and they are certainly right to be so; in certain ways, supply side economics doesn’t entirely work, or at least not as well as payday loans.

As much as it would seem that this is a bad idea, it can really work

One of the leading forces in what’s called macroeconomics, or the study of government and world economies and trade, was a man named John Maynard Keynes. One of Keynes’ biggest contributions was his position that an increase in spending is key during periods of recession, because it stimulates growth in economies better than conservation.

The bailout is textbook Keynes: the $800 billion stimulus puts capital back into the markets.  Even though it may seem that we’re only giving it to ourselves and then paying taxes on our own tax money, we’re getting something for it: we get to re-capitalize the consumer credit market. We can get loans for purchasing homes, cars, and perhaps the most important of all, for college educations. The author of this post would not know a thing about Keynes or economics if it were not for government student loans when I need money for my education.

It is through that very sort of program that others like this author and many, many others, that allows us to have the privilege and gift of a higher education, to cultivate educated, informed, and rational, critical minds to better ourselves, our families, and our society. Many of us desire to see the extra money from the bailout go towards: to give the next generation the same, or better, opportunity to pursue the same, for the good of all mankind. It is vital to the future of America and our children that they do so.

Those who don’t study the past will be doomed to repeat it

Government stimulus and payday loans for recapitalization has worked before. Had it not been for the stimulation of the New Deal, it is possible that the Great Depression could not have been surmounted and overcome for decades longer than it took. Now, many of us, also including this author, are in favor of a self regulating, responsible free market – less government intervention and the best product and price benefiting both consumer and producer/retailer, but these payday loans are for the good of everybody.