Y!A - Is the Economy going to get better now that the bailout plan is in place ?

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First of all, I'm not a college graduate or in college or planning to go to one. I did however have the opportunity to go to any Ivy League college, but refused based on the current System of Education's failure to truly educate people to be more than just pawns of society. I'll leave to you to judge my merits.

Now, as far as the economy goes, let me begin by saying that in my opinion, the best study of economy is that which analyzes social, psychological, political and economic trends, and the connection between them, for the longest period of time.

The overall failure to predict and avoid the current crisis is a direct consequence of failure to follow the above model. Let me explain:

If you look just as far back as the Great Depression and the period of time between then and now, you will observe that society has been in an relatively perfect vicious circle.

Relatively shortly before the Great Depression, there was an economic boom. I'm not going to go into the details because I don't feel like writing a book. But society started to "evolve" extremely fast. People started to "trust" the system more and more. As a consequence of this great "progress" people started to rely on credit too much. People started to take too many chances. Now, let me try to explain something about taking chances.

When you take a chance, it is based, or should be based, on exterior facts that assure you that you're more likely to succeed in taking a chance than failing. So, if you take a chance based on me, and I take a chance based on another person, and that person takes a chance based on someone else, and so on, then it only takes one single screw up to mess everyone up, which, in terms of logic, means that the risk has become much greater.

Now, apply this to a point in time where everyone is taking chances. It doesn't matter whether there's a good reason to take chances. If you add too many chances together, the risk becomes so great that the chance of success becomes almost non-existent. Think of it like this, what's the chance of getting a number in a 6 faced die once? 1/6. What's the chance of getting it twice? 1/36. So you see, the more you connect chances together, so that one becomes dependent on the other, the more you increase the risk, in an exponential fashion, to be precise.

What about the period of time between the Great Depression and today?

To summarize, we have gradually regained the "trust" on the system. We have gradually recovered from the fall and achieved a high level of "progress." And up until shortly before this crisis, we were finally "evolving" extremely fast again. All this led people to once more start taking too many chances. And once again, the result was that the risk was extremely great. And once it failed, it affected everyone.

What does this have to do with the bail out plan and whether things will get better.

As an old saying goes, "after the storm there always comes the calm."
Of course things will eventually get better, partly because of the bail out. However, when we look it in terms of long-term instead of short-term, the question we must ask is:

"Have we finally learned to perceive the line between taking risks responsibly and putting the well being of everyone in extreme risk?"

If we learn, then, once we get out of this crisis, we can make sure that we don't fall in another crisis, which could be much worse, be it 5, 10, or 50 years from now.

One thing that is important however, is that we don't rely solely on the government to regulate how much risk we can take. Business will always find their way around regulations, be they "20th century" or "21th century" regulations. The average person needs to be aware of society and the economy, and be able to know when they are taking too many risks, so that if this should be the case, they can see the problem coming and avoid it.