Cost of Economic Recovery- 2 Trillion Deficit?
The cost of economic recovery, beyond the solution of bankruptcy, is beginning to impact the national deficit in a large and burdensome way. Already many experts have become concerned that the ballooning national deficit could render both the dollar and the treasury bill far less secure than they once were. People should keep in mind that the value of everything is relative to other currencies, commodities, securities, and anything else of value, and the rate at which we are printing and spending fiat money may well come back to haunt us in the years ahead. But in the end there are potentially only two consequences to our crisis- a dramatic slowdown or dramatic inflation to bring us out of dramatic slowdown.
Many people have speculated that bankruptcy was not a viable option for the Big 3 automakers because of the lack of confidence bankruptcy would have brought to their customer base. Customer relations would plummet as people would be psychologically unsure of whether there would be support for the autos they purchased in the future. However, this is likely more psychological than rational. The specter of bankruptcy raises in the immediate consciousness the idea of failure, even though failure would have likely been imminent without bankruptcy, and bankruptcy would have possibly saved all 3 companies from oblivion. So it is a psychological reaction based on ignorance more than a reflection of the reality of a Chapter 11 bankruptcy solution.
