Today was supposed to be a historical day in Politics for a “good reason.” The Congress was supposed to pass a bill that would help the government buy up to $700 billion in distressed assets and bailout the US economy from another potential depression. Given the grave alternatives – it was suppose to pass with flying colors. But, it didn’t. Because, put simply, inefficient bad politics.

What upsets me the most is when you ask the average person about this bill they have an incorrect understanding of it. The media and bipartisan politics have labeled this as a “bailout for Wall Street’s billionaires” – but little do they know – this has a direct effect on the economy to everyone (whether you own a single stock or not). Except, all we hear is “Oh my god – $700 billion of taxpayer money going to save the Wall Street boys” – when it should be characterized as a bailout to get the US Financial system back on track. Let me break it down in plain English – the banks have frozen credit. Right now, it’s so hard to get a loan – even a person of my financial background would go through several levels to get approved, and the chances are given how tight things are – I wouldn’t get approved. So, what other ways does this affect the “real world”?

•    An 18 year old student trying to get a loan for college – will likely get denied

•    A small business owner who has to do payroll – and borrows money from banks for cash flow reasons – will unable to do payroll and will inevitably either shut down or layoff employees. (This is actually a “real example” that’s currently happening across the nation).

•    A family who actually wants to buy their first home and has good credit with a down payment – will likely get denied.

•    Entrepreneurs trying to start businesses and increase employment – will not be able to do so due to lack of capital.

•    Your credit cards will either get cancelled by the banks that issued them or they will likely drop your limit substantially.

•    Cost of day-to-day goods will skyrocket. We already know how expensive gas is? But – all indicators are showing that cost of food is now also skyrocketing.

Here’s the simple way to understand it. We run on credit – the US economy runs on credit. We need credit to survive day to day. When credit is frozen – the cycle stops. And that’s what’s happening now. We have reached a precipice. Today’s demise on Wall Street was a great indication of what is yet to come. The Dow Jones dropped 777 points (worst ever in history) – and tells us if we don’t do something, Armageddon in the world economy could be near. So, this package put forth wasn’t to bail the Wall Street rich – it was too free up bad assets on the banks – so they could now let people like you, me, the student, the small business owner, etc. borrow money again. That way – the cycle – the economy continues to operate in its normal course. Without credit – we’re pretty much screwed. In effect – we are already at a 6.3% unemployment rate. If a bill like this doesn’t pass soon – we’re estimated to hit a 20% unemployment rate soon.

I think the media and most importantly politicians have a fiduciary responsibility to get on camera and educate the average citizen how this fundamentally will affect them. That way, people don’t think it’s only going to save the rich guys on Wall Street. We’ve failed to do that. Heck, if people in America have lost faith in George Bush – they should have hired George Clooney to perhaps give an Economy 101 lesson on what this really means for everyone. A basic education on the merits of this plan is badly needed to change its current perception.

Before, the voting started today, the speaker of the house – Nancy Pelosi gave a bipartisan speech attacking the President and the Republicans for putting us in this mess. After the voting ended, the bill didn’t pass. The vote was 205 for and 228 against the legislation. The Democrats supported it while the Republicans didn’t, which is shocking since – The President and the Secretary of Treasury who brought this bill together are both Republicans. The Republican leader later went on the record and said they didn’t have their parties vote because Nancy Pelosi attacked their party in the beginning of the voting session. This is pretty pathetic. We don’t hire politicians to think with their feelings – we hire them to actually do a job. And today, they absolutely failed. While this bill was going to provide credit back in the economy and stimulate it back to its course – it failed. The Stock Market crashed today and erased $1.4 trillion in value (that is 2 times more than the actual value of the current bill) in just one day. Does Congress want to do the math here and start doing their job rather than playing high school games on who can be the bigger bully? This congress and governmental system is starting to have the similarities of a circus rather than a governing body. And, that doesn’t exude the confidence that we desperately need.

Every day of negligence from our government is costing us money. Today it wiped off $1.4 trillion of hard-earned equity created by us all Americans. I just hope we come to some solution here and a bill is passed soon – otherwise our economy is in danger of hitting another depression, forget about just a recession. I maybe too young to know what is like to be in a depression – but the history books leave me with enough information to educate me and tell me – that this is something we’re not ready for or want to take the chance of getting into.

Tags: bailout plan, congress, credit risk, depression, Dow Jones, financial system, george bush, george clooney, nancy pelosi, recession