It seems like nobody wants this bill to pass except for the president, bernanky, paulson and a few others. Economists almost unaminimously agree that it is a bad idea, tax payers are pissed as hell and letting their congressman know it, both republicans and democrats aren't exactly thrilled over it, and yet it's being pushed and pushed hard as the solution that needs to happen NOW.

Do you think that this thing is going to go through, or will another route will be sought?

Do you think that it should go through? Or is there a better way to prevent economic collapse?

 

I'm no economist, but it seems like it's a bad idea all around. It will create immense national debt that may not get repaid, other countries may not be willing to buy tons of US bonds with the dollar getting weaker and weaker, a huge increase in taxes isn't going to help an already struggling economy, and the treasury certainly doesn't need to start printing more money. To me it seems like inflation would be almost certain, but again my understanding of economics isn't what I would call "deep" so much as "rudimentary".

I've heard alot of alternative plans to the problem. And it seems to me that a much cheaper and safer solution would be to invest billions (though not hundreds of billions) into buying preferred shares of stock warren buffet style in failing banks (which would no doubt piss off other investors, but it wouldn't piss off the entire country) while at the same time passing some kind of legislation to prop up the housing market so that fewer loans will go sour. It wouldn't be a perfect plan, but it seems better than spending hundreds of billions buying out loans, unsupervised (no doubt buying the loans at an inflated cost thanks to lobbyists and an utter lack of supervision or accountability) with a great chance of never getting the money back.

 

Or hell, why not just insure their debt rather than outright buy it? Provide a security net so that the banks don't have to panic. That would elimate needless purchasing of potentially bad loans, while preventing the banking system from locking up.

Point is there are alternatives to a plan that nobody likes. I just hope they find it.

 

What does everyone else think? Are there better plans? Should congress just hurry up and find an agreement on the 700 billion dollar bailout? Do you think they will even if they shouldn't?

I'm mixed. I also don't know much about the economy so I can't really argue over the finer details. Obviously I'm against the very thought of the idea that taxpayer money from middle class and poor Americans will help bail out companies where high paying executives made bad decisions and yet the working Americans don't get bailed out when their bad decisions lead to foreclosures or worse.

But something has to be done. Unfortunately these companies are too big to fail.* The $700 billion proposal Paulson wants where he isn't held accountable for how he spends it is ludicrous however and definitely should not pass.

*I was listening to the radio earlier and Senator Sanders made a point I really liked about the statement that they are "too big to fail". If these companies are too big to fail they are too big to exist. Once the economy is fixed we need to find ways to insure this won't happen again and that may entail making sure no company gets this massive or entrenched in the financial system that its' collapse could cripple the economy.

I do not like this bill. I do not think it will pass. However, I don't know what will happen, it is a toss up as to how things will end up. At least the House Republicans are "standing" in the way of this. Truthfully they have no power if the Democrats wanted to pass this bill. No Welfare for Wall Street. Let's hear what alternatives the House Republicans come up with in the next day or two.

Its fine to promise alot of money but installments are a better idea with full executive control and authority. DO NOT give the Finance Seceretary a blanket in terms of judicial or executive oversight over the spending.

With conditions such as severely restricted pay for executives (performance based?) and priority for all those homeless customers who are fucked through no fault of their own these should controlled.

I honestly don't know whether it would be worse for this bill to pass or for this bill not to pass ...

If the credit markets end up getting any worse there will be large companies that are forced to close their doors because they will simply be unable to gain access to the credit they need to handle their day to day operations; if this happens you would see an instant spike in unemployment and we would be in an instant depression.

At the same time if this bill does pass the American tax payer is going to be stuck paying a debt that they did nothing to earn (for the most part); this will result in higher inflation/higher interest rates and slower ecconomic growth.

 

I think everyone would feel a lot better about passing a massive bill if we saw alternatives.

nationalize all of them.  if a child misuses a toy...you take it away.

I am sure a modified version of the bill will eventually pass. Everyone will trumpet the bipartisan support it received, and they will laud our elected officials for working together to stave off a crisis. It should not pass, however, as it will be a disaster of epic proportions.

It should not pass - for many reasons.

Can't explain all the reasons why but I read market ticker denninger. he can explain it much better.

That's not true, they simply cannot agree on how the bill should look like.

I really would like to see as many investment bankers on the street as possible begging for some cash. (Bastards got more Christmas money than a good engineer in a whole year despite having NO FREAKING IDEA WHAT THEY WERE DOING)

But if the financial sector collapses the economy goes with it. Economists say the bill is basically a good idea (and if everything works out ok it doesn't COST 700b since the debt they would buy is worth the price in most cases. If they do it ok its more like throwing an enormous amount of liquidity into the system to end the whole bloodletting. But its a huge amount of money and if everything collapses anyway its thrown down the drain.

PS: Buying it makes much more sense than insuring it. Insuring means the government would take all the risk of a collaps because they would have to pay for all defaults. But they wouldn't get any money back when the crisis is settling and things perk up. Normally debt is repaid after all.

It's a simple problem blown out of proportion. We are in this mess because we spent money we didn't have. You can't solve this problem by spending money we don't have. Simple.

If you run your credit cards up so high that you can't pay your bills, writing checks with no money behind them does not solve your problem.

The Government is trying to keep this bomb from going off. The only problem, is it has already gone off. You can't step in after the fact, and fix things.

You fix the government like you fix your own problems. Stop spending money, try and get a loan (from other countries), and start paying off the deficit. When you bring in more money then you spend, you then have the option to bailout sectors of the market. When you are not responsible with your money (like the feds), you don't have this option. Making money out of nothing to pay off a debt is always a bad idea.

Oh, and for those that might not know. The reason the figure is 700B, is because that's all the money the Treasury is authorized inject into the economy at one time. I am sure if this passes, we will be spending a lot more then 700B.