Madam, - I wholly disagree with Tuesday's Editorial, which proffers support for broad, pre-emptive action by the US Federal government to halt a correction in troubled financial markets.
The plan, as drafted by Treasury Secretary Paulson, is reckless, dangerous, ill-conceived and inappropriate under the current circumstances. In essence, it gives the US government unlimited power to intervene in markets, with no regulatory control or meaningful oversight.
Even if such a solution were to work in the hands of responsible government, the very idea of giving this small group of neo-cons, who have time and again proven their ability and willingness to deceive, dissemble and mismanage should scare all of us much more than the prospect of even a more severe economic downturn.
But the deeper reality is that we cannot rely on government intervention - however well intended - to correct financial markets in this way. There is a huge, systemic cost to propping up a rotting financial sector rather than let the market has flush the illness from its system.
It is also incorrect to imply that the current crisis threatens the poor and vulnerable most of all. In fact, it mostly threatens those rich and greedy investors who are its ultimate authors, and that is why the Republicans are rushing to intervene.
Once before, this US administration has sought to use fear to undermine the institutional safeguards which keep the powers of the federal government in check. Now it falls to the Democrat-controlled Congress to ensure fear does not cause the US to act in a manner we may all live to regret. - Yours, etc,
GRAHAM STULL, Brussels, Belgium.
Madam, - It appears that Peter O'Rourke (September 23rd) still uses the "long-scale" numerical system, in which a billion is defined as a million million. However, the "short-scale" numerical system, in which a billion is just a thousand million, is now officially used in most English-speaking countries, including Ireland, the UK and the US.
While there is no right or wrong numerical system to use, it is essential that the same system is used consistently when comparing numbers. Mr O'Rourke estimates that there is up to $9 billion worth of bad mortgage debt in the US, and goes on to compare that to "governments all over the world doling out hundreds of billions to various financial institutions". As the word "billion" means two very different things in those two examples, this leads to a completely invalid conclusion.
Mr O'Rourke's estimate of bad debt translates to a staggering $9 trillion ($9,000 billion) when expressed in the short-scale system, compared with the US government's proposed $700 billion rescue package. So I sincerely hope that Mr O'Rourke has significantly overestimated how much bad debt there is in the US. - Yours, etc,
JACK NORTHWOOD, Murrumbeena, Victoria, Australia.