The Bailout Failed, What Happens Next?

According to the article in The New York Sun the final vote on the bailout was 207 for and 226 against.  141 Democrats voted for it; 94 Democrats voted against it.  66 Republicans voted for it; 112 Republicans voted against it.  There are a few things that need to be considered in viewing this vote:

1.  The wisdom and foresight of our founding fathers in setting up two branches of Congress still amazes me.  The entire House of Representatives is up for election every two years.  The Representatives have to be conscious of public opinion, and public opinion was overwhelmingly against this bill.  Representatives in solid seats obviously don’t have to worry, but many of the southern Democrats ran as conservatives in the last election and cannot afford to vote yes.

2.  Congress will never admit that this downward spiral began with the Community Redevelopment Act in the 1970’s which was enhanced in the 1990’s.  Any attempts to curb the foolish lending practices stemming from this act were blocked by Democrats receiving large amounts of money from Fannie Mae and Freddie Mac.  Until we hold Congress responsible for bad legislation, we will never get the budget under control.  Incidentally, as I write this, Yahoo Finance is reporting that Fannie Mae and Freddie Mac are facing a federal grand jury investigation into their accounting practices.

3.  Having said the above, I believe there are ethical members of Congress.  Hopefully, they will lead the way out of this mess.  There were a few alternative plans offered by conservative members of the house.  Hopefully, now that this huge transfer of wealth to the government has been rejected, some of these plans will be looked at.

4.  I don’t know what the correct answer to this problem is, but I feel strongly that a bigger federal deficit is not the answer.