. February 24, 2008 SouthAmerica: It seems to me that today the entire American Capitalist System it is on life support and on intensive care. Today, the United States the country itself depends on borrowed money from other countries to keep its economy afloat. For a number of years the American economy has been going through one financial crisis to another â and from a bailout to the next. Without government bailouts it seems to me that the American capitalist system is becoming obsolete, and probably would collapse without heavy government intervention. The principles of laissez-faire and free market economy that the United States used to hype around the world and wanted to impose and preach as gospel for other countries to adopt it - it is completely broken. But the reality is that the US market economy is running into trouble repeatedly and time after time the US government intervene with massive bailouts. Today to better understand how the US economy works â we can describe it as the âBailout Economyâ â that is the best characterization for people to understand how the US economic system is working today. The old idea that the free market economy system was the most efficient, productive, and so on â it is becoming very clear for most people around the world that it is not true in the real world. Without US government subsidies for many industries, and major bailout the US economic system canât survive. The US government humongous federal budget, combined with major government industry subsidies, and massive economic bailout it is getting to the point that very soon people will start asking questions about the future viability of the American capitalist system. And if the system it is in the process of dying a slow death. The idea that free market economics created the most efficient allocation of resources went down the toilet after the savings and loan scandal of the 1980âs, the trillions of US dollars that went up in smoke during the telecommunications and dot com meltdown in the early 2000âs, plus all the other bank, and insurance company bailouts that is becoming a routine for the US economic system to be able to operate - and that is costing trillions of US dollars to the taxpayers. (trillions of dollars in borrowed money from people from around the world.) Right now the American capitalist system it looks like a dying system â a system that is being kept alive only by a bailout after another. In a Nutshell: Today the main feature of the US economy is the major US government BAILOUTS that the US economy can't survive without it. ***** A âMoral Hazardâ for a Housing Bailout: Sorting the Victims From Those Who Volunteered By EDMUND L. ANDREWS Published: February 23, 2008 The New York Times WASHINGTON â Over the last two decades, few industries have lobbied more ferociously or effectively than banks to get the government out of its business and to obtain freer rein for âfinancial innovation.â But as losses from bad mortgages and mortgage-backed securities climb past $200 billion, talk among banking executives for an epic government rescue plan is suddenly coming into fashion. A confidential proposal that Bank of America circulated to members of Congress this month provides a stunning glimpse of how quickly the industry has reversed its laissez-faire disdain for second-guessing by the government â now that it is in trouble. The proposal warns that up to $739 billion in mortgages are at âmoderate to high riskâ of defaulting over the next five years and that millions of families could lose their homes. To prevent that, Bank of America suggested creating a Federal Homeowner Preservation Corporation that would buy up billions of dollars in troubled mortgages at a deep discount, forgive debt above the current market value of the homes and use federal loan guarantees to refinance the borrowers at lower rates. âWe believe that any intervention by the federal government will be acceptable only if it is not perceived as a bailout of the bond market,â the financial institution noted. In practice, taxpayers would almost certainly view such a move as a bailout. If lawmakers and the Bush administration agreed to this step, it could be on a scale similar to the governmentâs $200 billion bailout of the savings and loan industry in the 1990s. The arguments against a bailout are powerful. It would mostly benefit banks and Wall Street firms that earned huge fees by packaging trillions of dollars in risky mortgages, often without documenting the incomes of borrowers and often turning a blind eye to clear fraud by borrowers or mortgage brokers. A rescue would also create a âmoral hazard,â many experts contend, by encouraging banks and home buyers to take outsize risks in the future, in the expectation of another government bailout if things go wrong again. If the government pays too much for the mortgages or the market declines even more than it has already, Washington â read, taxpayers â could be stuck with hundreds of billions of dollars in defaulted loans. You can read the entire article at: ource: http://www.nytimes.com/2008/02/23/b...scp=3&sq=Edmund+l.+Andrews&st=nyt&oref=slogin .