The following question was recently posed by the Realtor.com Blogging Team:

Polls show 83% of Americans feel the Country is on the wrong track. What is your opinion on Friday night’s debate and the future of our economy?

I have to say I’m sad for the American Economy.  It’s not going to shrivel up and die, but it is going to hurt (a lot) before it gets better.  No matter what happens this is a cycle that we must go through - it is too late to change the circumstances that put us here, and any bailouts are ultimately just bandaids on our broken legs.

We need fundamental changes in how business is done.  Fundamental changes to how our economy works.  Fundamental changes on what people are allowed to do with their companies.  There needs to be a way for the INTENT of a law to mean more than the specific wording.  Specific wording is how loopholes are found…loopholes are ways to circumvent the intent without technically being able to be held liable.

No, this is going to be a long and drawn out process, and I fear the more we bail companies out that are unable to sustain themselves, the longer and more drawn out and ultimately more painful it will be.

I see a very strong parallel between the economy and selling a home in a downward trending market.  Your best bet is to cut your losses, price aggressively to move the property quickly, and realize that you’ll be better off doing that and selling NOW for slightly below market, than holding on to a price that you probably won’t get only to chase the market down and ultimately sell for less but with significantly more holding costs down the line…

The bailouts and bandaids that the government is considering are short term “feel good” fixes to long term and worsening problems.  Just like having a higher list price on a home makes the seller FEEL good while ultimately hurting their bottom line by forcing them to chase the market down, or just deal with the bed they’ve made and keep the house.

Our economy needs to cut its losses, and no it won’t feel good, and yes it will hurt quite a bit to re-break the bone, re-set it, and stick it in a cast so it can heal…but unless that is done - I fear our economy will be crippled for the long-term…and that is sad when it is preventable.  Companies that stay in business  are those that make good decisions, companies that don’t, don’t.  We create the world we live in - we create our future by our actions in the present…just as these companies created their present by the actions in their past.  Bailing them out will 1) be a bandaid and 2) encourage more recklessly risky behavior.

What’s the phrase when it comes to gambling with money you don’t have?  Oh yeah…don’t.  If you don’t have the money to lose, stay out of the casino.

These companies didn’t have the money to lose, and they went to the casino, they bet big, and they lost.  Now “Fat Tony” and “Jimmy Fingers” are coming after them to collect and they’re crying foul.  That’s not how it works, my friends.

If it were, I’d be at the casino betting with other people’s money and not being worried about whether I lose or not.  Oh yeah - and when I say “other peoples money” I mean yours.