US GOV'T BAILOUT of Banks
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Can you give some evidence, examples, or other proof of this?
My understanding is that prior to 1930's the idea was that the government should have a hands off approach to the economy and let things work themselves out. Many said this is the exact reason why things got so bad.
Great Depression - Wikipedia, the free encyclopedia
With an active federal reserve and treasury and these bailout plans, a depression should be avoided.
It amazes me how knee-jerky you all are blaming the Republicans for the bank failures especially when McCain sponsored a 2005 bill warning of this collapse (that the Dems blocked) and there is so much evidence of Obama's ties to Lehman Bros and Fannie Mae.
In fact, Obama was the second leading recipient of money being doled out by Fannie Mae and Lehman lined his greedy pockets as well.
In fact, Obama was the second leading recipient of money being doled out by Fannie Mae and Lehman lined his greedy pockets as well.
I agree, its bs, this crap happens all the time so w/e life will go on. If I needed the money and had the opportunity to make a lot of money by selling people crazy mortgages and not assuming any of the risk, I probably would. But businesses shouldn't be able to do crazy stuff like that, it should have been more regulated because people are stupid and will actually take these stupid mortgages.
Regulation is the death of capitalism. The USSR had a heavily regulated industry, and it collapsed because consumers were not allowed to dictate supply and demand. The state is incapable of deciding for everyone what they can and should buy, and at what cost.
The market is self-regulating. People need to lose their houses (that they have not, and cannot pay for) and the people who created a market for these derivatives and securitized debts need to go broke. When there are consequences to bad investments and business, people don't engage in it. How many people sell goods for $1 that cost them $2 to make? Answer: ZERO.
But when the government creates moral hazard by promising to bail out the losers and cheaters, it becomes more profitable to cheat and lose, than to work hard and honest to win.
Regulation is not the answer. The government should be uninvolved. That would make a lot more players behave honestly, knowing there is no one to save their bacon when the shit hits the fan.
In over 100 years of intense regulation, the government is no more capable of controlling the market than it was 200 or 2,000 years ago. The bubbles are getting bigger and more frequent, and people can't connect the dots. They can't see that regulation is increasing the turbulence and making it last longer.
This is all just protectionist BS by Paulson, the former Goldman Sachs ripoff artist. Your wealth is being stolen from you (unless you are buried in debt) in a transfer from Main Street to Wall Street. The sad thing is, you are justifying getting yourself raped. It's like Stockholm Syndrome.
I think that's possible, but I don't see why tax payers wouldn't be able to pay off the debt over time. The government could possible make a profit on some of this too. The current plan for AIG is to give them a loan of 85 billion at something like 10% interest + the government gains control of 80% of the company. If that actual works and keeps AIG afloat (I'm skeptical) but then the govt will make a lot of money off of that.
We are moving to a socialist government. No more free housing.
We arn't even bailing them out, we are just helping them out temp.
Its also kind of scary to think that the FDIC has only has 50 billion in there accounts, and they said they need more money to to cover the costs of these banks failing. Were will they get this money? They will print it.
I really dont have an option other then they shouldn't "bailed out" those banks. Let them fail. let this thing sort itself out other then having the government buy and control everything.
Yes its time to invest in gold and ak-47s
We arn't even bailing them out, we are just helping them out temp.
Its also kind of scary to think that the FDIC has only has 50 billion in there accounts, and they said they need more money to to cover the costs of these banks failing. Were will they get this money? They will print it.
I really dont have an option other then they shouldn't "bailed out" those banks. Let them fail. let this thing sort itself out other then having the government buy and control everything.
Yes its time to invest in gold and ak-47s
Think rationally. If you have lost trillions of dollars, can you wipe out those losses by creating trillions on a computer and depositing those in your bank account?
Honestly. Think it through. Where is the money coming for this? The US is already running a massive budget deficit, and has $50+ trillion in unfunded long term liabilities. How are these banks being bailed out?
When you post back a decent answer, or that you don't know, I will explain it to you. But I want to see you admit ignorance or use your brain. It's not my job to provide answers when you have the internet at your fingertips.
Hoover and FDR were protectionists. Look up the Smoot-Hawley Tariff. Even the Federal Reserve admits it caused the Depression. But the public education system encourages an anti-capitalistic mentality, that only through state power and socialism was the Depression solved. On the contrary, the Depression would have been over in 2 or 3 years, if Hoover and FDR had not put in price fixing and created industrial cartels. By trying to prop up prices and wages, they created shortages which ground commerce to a halt.
Read this and understand it.
The Social Imperative of Sound Money by Llewellyn H. Rockwell, Jr.
Friedman was a monetarist crackpot. And Bernanke is a moron too.
Ask yourself, is it possible to print (money) out of debt? That is what Friedman and Bernanke argue. That when the economy goes into a recession, the correct answer is to debase the currency, and dump new money into the economy.
Well guess what happens when you dump more money into the economy? You dilute the value of existing savings. And it is impossible to distribute the money evenly, so whoever gets it first, gets to buy more goods and services than everyone who didnt get new FREE money, leading to shortages (contracting supply) which raises prices (inflation).
If you like to read, let me recommend Murray Rothbard's "America's Great Depression". It is a free PDF or you can buy it at several places online. It is a complete analysis of the Depression that should expand what you probably learned in public school.
I don't see how they can. In 1980, America was the largest world creditor. Not it is the world's largest debtor.
People are living off debt now. The Chinese and Japanese owe several trillion of the US debt, and they receive taxes in interest payments ($500 billion a year just in interest alone).
There are unfunded liabilities for SS and Medicare that total over $50 trillion. That money has also been raided and spent already.
You should look up "David Walker GAO Tour"
That's propaganda. They might make a nominal profit. Like how $1 in 1913 is worth $0.03 now. They might make money but adjusted for inflation, it will be a loss. It is impossible to convert bad debt and foreclosure into good debt, just as it is impossible to convert lead into gold.
Who is paying the inflated prices for government profit? The citizens who use AIG. So it's just another way of taxing. It's actually how the communists do it. You don't pay taxes, almost everything you buy a share or all of the profit goes to government.
Anyway, this conversation makes me nauseous. I gave you some things to check out, please make use of them. It is in your best interest to be informed.
Oh yeah, here is a hint too. Guess who gets new money and credit first?
Yep, the same people that want a bailout. The banks, Wall Street etc. That is where the FED releases new credit into the system. They get it first, and then charge you interest to get some of it in the form of loans.
Nice, ain't it?
Yep, the same people that want a bailout. The banks, Wall Street etc. That is where the FED releases new credit into the system. They get it first, and then charge you interest to get some of it in the form of loans.
Nice, ain't it?
Ok, thanks, I will do some reading and decide for myself.
Right now though, I think regulation, to a normal degree, is a must. We absolutely need agencies like the FDA. And people are stupid, so they should be protected from making stupid decisions that eventually affect everybody. I don't think businesses should be able to crash the entire system. I think that if we had adequate regulation this whole mess could have been prevented.
Right now though, I think regulation, to a normal degree, is a must. We absolutely need agencies like the FDA. And people are stupid, so they should be protected from making stupid decisions that eventually affect everybody. I don't think businesses should be able to crash the entire system. I think that if we had adequate regulation this whole mess could have been prevented.
Hopefully, you will be able to move beyond this. Regulation is always ex post-facto. It doesn't stop problems, it just tries to prevent them from happening twice. And even at that, it fails.
Look at the drug war. I think Nixon said it would be won by '74 or '76. How is that going? The FDA? Helps drive up the price of medications, and limits availability to needed experimental drugs. Also is starting to interfere with (cheap) natural product medicine.
Regulation and bailouts are socialism for the rich. Who do you think writes Chris Dodd's legislation? It's a known fact that his lobbyists write it for him, and he just puts his name to it.
The market is the sword of damocles over the heads of would be monopolists and rip off artists. What the government does with regulation, is convince you that if you let them hold the sword, they will drop it at the right time, but when the right time comes, they convince you to give a reprieve (bailout).
Don't get me wrong. This is an excellent racket. If you can get in on it.
Voting doesn't matter. Different ideologies, conservatism, neo-liberalism, socialism, also don't matter.
The run is run by elites and it is only their idealogy that matters. This is 1. the world must be run by an elite group of people and 2. they must be part of this elite.
The run is run by elites and it is only their idealogy that matters. This is 1. the world must be run by an elite group of people and 2. they must be part of this elite.
Ok, I think I understand most of your points guerilla, but I still disagree with most of it. Or in other words I don’t think inflation will get radically out of control to the point where money is useless as a result of this. Maybe I’m wrong, I honestly don’t know, but I think we will be ok 5-10 years from now without having to go through a brutal depression.
The government can afford to sit on these toxic assets, which allows the banks to recover. Then the fed can raise interest rates to combat the inflation and we are basically back to normal. Tax revenue increases because the economy gets better. The new president manages the deficit and imposes new regulations to keep lending responsible.
Honestly I don’t know a whole lot about economics and especially not politics. But I find it hard to believe that the ideologies and theories that existed prior to the great depression are accurate. I guess time will tell though.
The government can afford to sit on these toxic assets, which allows the banks to recover. Then the fed can raise interest rates to combat the inflation and we are basically back to normal. Tax revenue increases because the economy gets better. The new president manages the deficit and imposes new regulations to keep lending responsible.
Honestly I don’t know a whole lot about economics and especially not politics. But I find it hard to believe that the ideologies and theories that existed prior to the great depression are accurate. I guess time will tell though.
There is nothing wrong with disagreeing with me.
You think, or you know? My opinion is not based upon gut instincts or well wishes. I'm talking about measurable, historical effects of propping up a failing market by flooding the economy with massive amounts of liquidity created not by production, but by literally typing a number into a computer.
If everything is ok in 5/10, you'll be smarter for having thought this thru. if not, you'll be kicking yourself in the ass. But I wouldn't risk not preparing for a bad outcome. Whatever TV and radio you listen to, you're not hearing the other side of the financial experts who are screaming that this is bloody murder, and potentially the setup for a huge meltdown.
Who is the government? It's you. The government represents you. So can you afford to sit on the bank's toxic assets? Can you afford to buy junk derivatives that are pretty much worthless with your hard earned cash?
The banks can't "recover" until these bad debts are liquidated (taken off the market at a reduced cost or zero). All the government has done, is said, "we'll take all of these worthless securities, and we'll spread the losses among 300 million citizens and a few thousand foreign investors. They will eat the losses for you, and you can clean up your balance sheet".
In other words, you and everyone you know, is paying off the bad decisions of the banks. And most insidiously, you will be paying through inflation, so your savings will debase, and your purchasing power will shrink. You're actually going to lose some of your standard of living in order to make this happen.
That's the theory. But in an economy with defaulting houses, and a stagnant growth profile, high interest rates will be suicide. It will be like the early 80s all over again, people will be walking away from their homes. Remember, these people getting bailed out, already can't afford their interest only, zero down low interest rate mortgages. Who says they will be able to afford them in 2 or 3 years if rates triple? Not to mention that they will be paying $500k mortgages on $300k properties. Who thinks that is likely to happen?
Taxation is theft. The more tax the government takes, the less capital there is for growth in the economy. The government should be slashing spending and taxes right now, instead of buying up toxic debt it can't afford.
The President doesn't manage the economy. He has no constitutional authority to do so. The Congress and Treasury are supposed to be responsible for fiscal and monetary matters, not the private FED or the President. If the President is running the economy, that's pretty much a monarchy.
Well, no recession lasted longer than 2 years generally prior to the Depression. Once the FED showed up, the gold standard collapsed twice ('33, '71), and there were Depressions in the 30s and late 70s.
What you find hard to believe, admitting you don't know, is not worth a damn. There is nothing stopping you from educating yourself. Find out for your sake. Know for sure. Guessing and hoping and thinking won't put shoes on your feet and food in your belly if the shit hits the fan.
This plan is a two-edged sword. It will help us get out of the housing crisis and hopefully put a bottom to this recession but in the end, all the people who got us in the situation got a free pass on this one, thus leaving the taxpayer with the bag to hold.
I think we should start a Congressional White Caucus.
Seriously though:
This proves the genius behind the Obama campaign management. How those guys were able to spin this the way they did to shamelessly point the finger at the Republicans prove just how bold (or soon to be proven: stupid) they truly are. People will either eat it up, or see Obama for what he truly is: someone not to be trusted.
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