Is our tax dollar being put to good use?

As we hear about more and more governmental expenditures with each passing day, some of us grow concerned as to whether we’re spending too much on things that will not pay dividends to us or our children, or those who follow.

Author John Hussman probes our spending policies and explains the consequences of what he argues is irresponsible spending by our government representatives in his article, “Time To Stop Squandering Taxpayer Money”.

Hussman discusses the managerial problems that our legislature is incurring while scooping out a bowl of bailout for failing businesses and trying to simply purchase away their debts.

This is my favorite part of the article because it is concise and crunches the numbers in layman’s terms:

“The course of defending the bondholders of insolvent institutions is not sustainable. Do the math. The collateral behind private market debt is being marked down by easily 20-30%. That debt represents about 3.5 times GDP. That implies collateral losses on the order of 70-100% of GDP, which itself is $14 trillion. Unless Congress is actually willing to commit that amount of public funds to defend the bondholders of mismanaged financials so they can avoid any loss, this crisis simply cannot be addressed through bailouts. Bondholders have to take losses. Debt has to be restructured. There is no other option – but the markets are going to suffer interminably until our leaders figure that out.”

Throughout the rest of the article the author explains how congressmen are actually deceiving themselves in attempt to throw a blanket solution onto the fire that we call a recessed and collapsing economy.

Hopefully decision-makers will begin to take heed to the reasoning presented in this column and we will find a way out of this labyrinth of confused spending. This will be of great importance, especially for those of us taxpayers who are already taking out a second mortgage.