As reported in the RepublicanAmerican newspaper, the demand for a piece of the $700 billion bailout fund has reached new levels of lunacy. Originally, the bailout was passed by Congress to rescue our banking system from collapse, but the idea of being bailed out with taxpayer money has apparently become very appealing to anyone who might have made a bad financial decision. Apparently, some of those individuals who locked in home heating oil at $5 a gallon earlier in the year feel some sense of entitlement for their bad call now that the same oil can be had for $2.40.
The RepublicanAmerican reports that:
“In July, when heating oil was approaching $5 a gallon and the so-called experts were saying crude was headed to $200 and beyond, millions of homeowners were flipping coins. Heads, they’d commit to pay $4.50 to $4.75 a gallon for heating oil this winter; tails, they’d gamble it wouldn’t going to $6 as predicted.
In Connecticut, heads came up about 200,000 times. And as soon as those homeowners signed contracts with their suppliers, crude prices crashed 60 percent in less than four months.
Today, heating oil can be had for as little as $2.40, c.o.d. As awful as those contracts are, they were signed by willing sellers and willing buyers. Legally binding contracts are fundamental if we are to have faith in our economy and the rule of law.
Heating-oil contracts have an excellent track record. In the last 20 years, for example, customers of Wesson Oil of Waterbury who signed oil contracts saved money in every year but two, including one in which they broke even. Last winter, when the average retail price was $3.31, those who reserved 700 gallons saved about $500.
The Independent Connecticut Petroleum Association and eight other energy associations want Treasury Secretary Henry Paulson to redirect some of the $700 billion allocated to ease the credit crisis to allow them and their customers to get out of their contracts.
Their hearts may be in the right place, but the feds already have bailed out the lending, financial and insurance industries.
Congress is poised to spend billions more to rescue borrowers who through stupidity or duplicity got mortgages they couldn’t afford.
The auto industry got $25 billion and this week was back in Washington for $25 billion more. Spendthrift states are asking for upward of $30 billion.
The list goes on. The retail, construction, electronics and tourism industries are reeling. The service sector is shedding jobs left and right. Should the feds bail them out, too? Where are they getting the money? Between deficits, long-term debt and unfunded entitlement liabilities, they (present and future taxpayers) are in hock for nearly $100 trillion.
Comparatively speaking, no person or company is in worse financial shape than the government, yet pain-averse Americans continue to go to the government for handouts or bailouts to indemnify their mistakes.
We don’t doubt that heating-oil retailers and customers would love to get out of their costly contracts. But what about investors who bought stock in AIG this year for $62 a share, people who three years ago purchased flat-screen TVs for twice what they’re selling for today, and millions of Americans who suffer buyer’s remorse every day?
Where does it end?”
Excellent article and there is no need to answer the last question posed by the author since it is obvious, as manifested by our collapsing stock market and economy. A sovereign nation’s credit rating and ability to pay its bills is no greater than the sum of its citizens earnings capacity. If member A of our society receives some sort of entitlement, by definition it must be paid for by some other member B. Member C, the government brings no money to the table; they merely sit at the table and divide the wealth between A and B.
A national government does not have an unlimited ability to borrow and spend without eventually defaulting on its debts and impoverishing its citizens.
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