The New 700 Club

$700 billion. Just a few months ago the Democrats complained that President Bush had spiked our annual deficit to $400 billion. Now, with barely more than a month until the elections, the opposition party is helping the President nearly triple the deficit.

Is it a coincidence that the nation’s annual trade deficit is also $700 billion? Or that we spend $700 billion annually on foreign oil? Is there something to this fiscal numerology that we should investigate?

As of last night the Senate has passed a revised bailout. Of course, in true American fashion, they took something we can’t afford and made it more expensive. There’s a reason that all these foreclosed houses have granite countertops and Sub-Zero appliances.

Some time tomorrow we’ll find out if the House can stomach this $805 billion dose of economic Pepto-Bismol. Will the naysayers be remembered as geniuses or goats? Neither and both, assuredly.

No one really knows what the economy will do with or without the bailout. We’ve had 70 years to analyze the Great Depression and we still can’t agree what caused it. What makes anyone think we can predict what will happen now? We’d have better luck trying to predict the winning six Lotto numbers, which, come to think of it, might be a more viable long-term economic plan.

“Our banking system is a safe and a sound one,” Treasury Secretary Henry Paulson assured CNN less than three months ago. Now, though, we’re told that a failure to tuck $700 billion under Wall Street’s pillow will cause the economy to crash faster than Billy Joel in a bumper car, and make real estate ads read like the Dollar-Menu at McDonald’s. I’m all for listening to the experts, but when? Given that Paulson’s track record on pegging the economy is no better than, say, Paris Hilton’s, why shouldn’t we let the heiress spend the money? At least it will make for more exciting television.

Not everyone is sure that the failure to bail out the fiscal boat will cause any huge disruption. They say the government is crying wolf. Others say that the wolf is real and that the credit markets have already locked up tighter than the security at Brangelina’s day care center. Given the risk, it makes sense to believe the warnings. But does it make sense to lavish $700 billion on a Wall Street that has demonstrated all the social responsibility of a meth lab, while producing less in terms of tangible product?

The president and his advisors say we need the bailout to preserve the system and prevent further losses. But what are we preserving? A system so dependent on rampant personal spending that we’ve engineered a negative savings rate? A system so reliant on fiscal irresponsibility that, in the wake of the September 11 attacks, our only duty (according to the president) was to go out and spend money? I wasn’t around in 1941, but somehow I don’t think that was FDR’s message to the people on December 7, 1941.

We’ve been told the bailout is like putting out a fire. You don’t worry about the cause of the fire, you just extinguish it. But are we really putting out the fire? By bailing out the system and trying to prop up housing values, we’re not doing anything to fix the rampant consumerism that got us here. Maybe we’re not putting out the fire—maybe what we’re doing is trying to fix the collapsed roof, ignoring the flames that caused it. Sure, we can put another roof on our house, but if the fire still rages, it won’t last long. Is that what we’re doing with the bailout?

Nothing we do is going to return us to the days of $700,000 starter homes and annual cash-out refinancing paying for another set of Jet-Skis and flat screen TVs. Those days are over and the economic balm of bubble-supported consumer spending won’t be around to keep the containers of electronic mood enhancers flowing in from China. We can put off the inevitable for a while, but, like a drunk in a bar, closing time is coming. We might buy one more round for the table, but that’s just putting off the hangover that waits for us in the morning.