Bailout Bushwhack

I don't know about you, but I'm still not convinced that the bailout bill that is being forced upon taxpayers is going to curb the economic crisis enough to be worth the $700 billion in debt that may be needed to implement it.

This bill, now passed by the Senate, brings to mind the now iconic Wendy's commercial with the tagline: "Where's the beef?" If you've got friends or co-workers or family members claiming you're the fool for not supporting this bailout plan, ask them if they've seen this classic Wendy's commercial that, for me, sums up the lack of details on how this bailout will actually work. Lots of fluffy bun, no beef!

I'm certainly not alone in my skepticism. Last week, I asked readers whether or not the bailout was a good idea. Most of you who responded indicated you were against it. Here are some of your comments:

Lucy H. Terry from Kansas City, Mo., wrote: "Bush led us into Iraq based on hysteria and bad facts stemming from 9-11. Now he's hyping this 'crisis' into a taxpayer financed fiasco. I'm sorry, but I just don't buy it, and I'm urging my representatives in Washington not to buy it either."

"I feel that there are other ways to solve the problem!" said Zula Lyon of Welsh, La.

Nassau, N.Y., resident Tom Leonard wrote, "I would rather see the problem solved from the homeowner side. I oppose the current bill and prefer a 'trickle up' approach to solve this problem. I fear we are trying to cure a fever by performing an enema."

"We live simply, pay our bills on time and pay credit cards off each month when we use them," Gail Bradford wrote from Minnesota. "Now we have to pay for someone else's mistakes?"

Randy Johnson of Weymouth, Mass., said, "It's time to let the cards fall where they may. No investor bailouts. No more good money after bad with no oversight or accountability."

There were a few readers who favored the bailout bill.

Ray Merlin in San Antonio, Tex., wrote: "If we can bail out the people of New Orleans and Galveston, why can't we bail out the people who were seriously harmed by the instability of the stock market?"

"My pet peeve on this is the misuse of the term bailout," wrote Stephen Rhode of Milwaukee, Wis. "It's a flashpoint term that can incite irrational negativity. Investment would be more correct and I'm for it. It won't be perfect. But it will achieve the objectives."

I'm still interested in hearing your views on this bailout, or whatever you want to call it. Please send your comments to colorofmoney@washpost.com. Put "Bailout Bill" in the subject line. And please include your name, city and state. I generally do not post comments that do not include such information unless there is a compelling reason to withhold it.

Do You Get It?

Post Business columnist Steven Pearlstein says we don't get it. In his column They Just Don't Get It (Sept. 30), he says that America's now stagnant economic growth "threatens to bring down the global financial system."

My colleague says the only way to overcome this current crisis is to "have governments all around the world borrow gobs of money and effectively nationalize large swaths of the financial system so it can be restructured, recapitalized, reformed and returned to private ownership once the crisis has passed and the economy has gotten back on its feet."

And who will be left holding all that debt?

Or perhaps we just need to trust that our elected officials and federal regulators know what needs to be done now after they've led us into financial trouble.

Well, many Americans aren't buying it.

In Fear and Distrust Run High (Sept. 30), Post staffers Joel Achenbach and Ashley Surdin write the "Emergency Economic Stabilization Act of 2008 in the end was a $700 billion piece of legislation that few people could truly love, and it offered citizens from across the ideological spectrum a little something to hate."

This is an interesting read showing that, in fact, we do get it. We're just not sure "it" -- the bailout -- will work.

What Does This Economic Crisis Mean For You?

Americans all over the country have been submitting their economic questions to the Post. Some are worried about their mortgages; others are concerned about the bailout and their savings and investments.

We've answered a number of questions from readers in a series entitled Q&A: The Crisis and Your Pocketbook.

Have a question that hasn't been answered? Send it to us.

Personal finance reporter Nancy Trejos wanted to tell the stories of these fretful readers. Read about how this crisis is affecting some of them in The Financial Crisis and You (Sept. 28).

One woman, Cynthia Shank is worried about her individual retirement account. "I'm afraid to look," she says. In the last nine months, her IRA has dropped by roughly $100,000. The fifty-one-year-old single woman is already struggling to make ends meet with a mortgage, $16,000 worth of credit debt and a student loan that will be due soon. Shank wrote to the Post asking how she could rebuild her retirement savings. Trejos responded with expert advice for her and others.

The Great Depression Guru

Does it comfort you to know that Ben Bernanke, chairman of the Federal Reserve Board, is an expert on the Great Depression?

Post columnist Richard Cohen is comforted.

Read Topical Depression (Sept. 30) to find out why.

Bank Failures

I've been getting e-mails from people worried whether or not their deposits are safe. I understand the fear but it's unnecessary if you stay below the FDIC deposit limits, which may be increased if the bailout bill is ultimately passed into law.

When Washington Mutual was taken over by the FDIC and then sold to JP Morgan Chase, nothing really changed for customers says Kiplinger's contributing editor Kimberly Lankford.

Lankford has an account at the bank and she says "Nobody lost any money on deposits at Washington Mutual" even if they had more than the FDIC insured amount in the bank. Here are some details about what the acquisition means for Washington Mutual customers:

* Use of ATM cards, checks, debit and credit cards, online services and branches continues.

* Direct deposit and automated payments are still the same.

* WaMu customers should continue to send their credit card and loan payments to the same place.

* Loan terms are now governed by contract, but will remain the same.

For more information, read What the WaMu Collapse Means for Its Customers (Sept. 30).

Many people are now worried that their bank will fail. So how do you choose the right bank or credit union? Ask the Experts has the answers:

* Steven E. Richardson, Partner with Potomac Financial Private Client Group in Fairfax

* Annette Simon, Principal at Garnet Group in Bethesda

* Terence E. Burns, President and founder of Campion Wealth Management in Vienna

You Asked

We talked about the economy and my Color of Money Book Club selection in last week's online chat. Here are answers to some of the leftover questions submitted during the chat:

Q: These days does being diversified mean putting half your money under the mattress and burying the other half in the back yard?

A: That's funny, even if what's happening isn't laughable. But to find out what it really means to be diversified read my recent column on the subject What Happens When We Forget To Diversify.

Q: How much truth is behind the President's statement that failing to bail out Wall Street will result in economic chaos? Is there substance to this message, or is he trying to scare the public into supporting Paulson's plan? What are alternatives to the current bailout plan?

A: All good questions and best to ask your representative. To find out who represents you in Congress or to write to your representative with your thoughts on the economic rescue plan click here and type in your zip code.

Q: I just found out my wife is pregnant with our first child. Is there a rule of thumb for how much we should have saved up in baby-related expenses for the first year or how much our expenses will increase? We have very little debt, steady incomes, and currently have an emergency fund with about 4 months of living expenses.

A: What you spend will depend on your income, health insurance coverage and savings. Obviously the big costs are diapers or diaper service, formula if your wife doesn't or can't breastfeed and medical costs. Just a tip, I breastfed all three of my children because the milk was free!

Post staffer Cecilia Kang wrote about how expectant parents can prepare financially in High Expectations (Dec. 17, 2006).

Here's an online calculator that offers an idea of how much you might spend raising your child up until age 17.

You are welcome to e-mail comments and questions to singletarym@washpost.com. Please include your name and hometown; your comments may be used in a future column or newsletter unless otherwise requested.

Charity Brown contributed to this e-letter.