In my last post I blathered on about how the Feds should give the 'people' the handouts rather than unload it on the very institutions which had a large roll in getting us into this mess in the first place. This lay theory was explained to me over lunch with Jon, who makes his living in the world of real estate, and I did not hesitate to further it to my son. Charlie's a sophomore Econ student at NYU, and he's a damn sight smarter than I am, thanks to the genetic input from his mother's side of the family. He tried to explain to me how I was full of shit, but come on, he's just a sophomore. Then he sent me this article http://www.businessweek.com/bwdaily/dnflash/content/jan2009/db20090123_308231_page_2.htm from Business Week, and now I think I'm convinced.

When I ran this past Jon he responded with the following:

Interesting article that is quoting a whole bunch of knuckleheads – er.. excuse me economists from academia (like they spend any time in the real fucking world).

I guess I just may be stupid but if people pay their debts to lenders (instead of buying a new pair of Levi’s) I don’t see how that is not capitalizing the banking industry in the same way that a big fat TARP check from treasury does – only without “bad debts?” Kind of Like a Recycling Program? Shit even if fuckers like you and me “saved” the money for a rainy day, unless we put under the mattress, it still winds up in the bank and is capital (yes with an interest cost) that can be lent to people and businesses. And as I said at lunch the other – those that choose not to pay their debt, or don’t’ have any can and most likely will just “blow it” on fun and exciting things…. and I guess that’s bad too.

I'm still as confused as ever. And when the politicians get through with it, complete with huge injections of their own political dogmatism, I'm not so sure Jon's all that far off the mark.

I guess all we can do is wait and see.