TheRealMafoo said: 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.

 

Best statement I've seen concerning this financial crisis.

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The free market has got us into this problem; it will resolve itself like every other financial crisis. If the US government try and remedy the problem with taxpayers' money, it sends a message to banks: do whatever you want and we'll bail you out when you go bust. Then the root cause of the problem (banks accepting too much risk to make quick money) will not go away and banks won't change their attitude or business practices (or executives, for that matter).

So, I'm against the bailout - not because they're spending my money (I'm not a US citizen) but because your government's actions will damage the world economy more in the long term.

I think it will pass though I really dont want it to. 700B$ is alot of money and I think they are just being careless with it.

I'm opposed to the government bailing out any private business. However, I'm not sure which is worse at this point :( Economists are all over the spectrum on this one.

If there are provisions to allow a return on our investment for companies that prosper under this bailout, then I would feel more comfortable supporting it. Interest free loans to the tune of 700B from the taxpayer make baby jesus angry.

A bit too simple. The low low low savings rate and high foreign debt of the US are also a problem but not the main course of the current financial crisis. (that's more some bad accounting surrounding sub-prime, credit default swaps ...)

Besides sometimes you HAVE to spend more money you do not have unless you want to implode the whole system. In the banking crisis 1929 the state didn't help and the treasure secretary said the system had to purge itself. That didn't work so well.

I hate my country so much right now, its just dying a slow death.

All because of the idiots running it, im moving to somewhere in europe if this keeps on.

You would be surprised we have plenty of idiots ourselves running our countries. The Scandinavian countries are well governed but goddamn nanny-states that try to tell you how you should live.
Italy, Greece are in a terrible economic mess.
Spain and Ireland have a bigger housing crisis than the US.
France needs lots of economic reforms and has a big minority of mostly arabic minorities that live in ghettos around the big cities.
And Germany had a decade of stagnation and low pay rises/ high unemployment. Now that we had one good year and idiotic tax rises (19% VAT) the economy is stagnating again thanks to the US.

So you won't find paradise here either.

i don't think anyone really knows what the bailout means for our future - least of all me. but from what i've read the bailout means a few things:

1. the 700 billion we put in now we should be back (either mostly or perhaps even with a profit) if the market rebounds.

2. the bad investments that the government would be buying are housing loans. by having the government buy them we can prevent the huge amount of foreclosures that would happen if we let the market take care of itself. and since the housing crash is the reason the market is tanking there is at least decent chance a bailout could really help our economy - no guarantee though.

3. with the president backing the bailout - democrats don't need republicans the agree on shit because they can pass any bill they want. the reason they don't and the reason the republicans won't agree is that NO ONE wants to accept the risk this bill carries. what if we spent 700 billion and nothing good happens?? the public won't be pleased and the republicans will have fodder to attack the democrats for years.

in the end i guess i think the same thing several of the pundits on pbs say: this is a really shitty deal - but the alternative is going to be a lot worse. the free market fucked us over and there is no way to get out of this without making serious sacrifices. thanks dad.

Kyros said: 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. A bit too simple. The low low low savings rate and high foreign debt of the US are also a problem but not the main course of the current financial crisis. (that's more some bad accounting surrounding sub-prime, credit default swaps ...) Besides sometimes you HAVE to spend more money you do not have unless you want to implode the whole system. In the banking crisis 1929 the state didn't help and the treasure secretary said the system had to purge itself. That didn't work so well.

 

I would agree with you if we were taking out a loan. We are not, we are just printing money and injecting it into our economy.

Here is an example:

If I had a county of 10 people, and each has $100, my countries worth would be 1,000 With each person holding 10% of it.

If I as the leader, said we need to buy a new capital building, and it's going to cost $500, I could do four things:

1. Earn the money. Meaning somehow add 1/3 value to my country.

2. I could tax the people, asking for half of what they have.

3. I could make new money.

4. Do nothing.

Side effects of each:

1. The 100 dollars each citizen has is worth the same amount, meaning I have not negatively impacted them in any way.

2. I have taken half of there income, but left the other half at the same value. $50 should buy what $50 bought before.

3. I have taken a country with only $1000, and now turned that into $1500. That means when the money enters the market. What used to cost you $100 to buy, will now cost you $150. I have lowered the value of everyones money.

4. I don't get a new house.

#3 is what congress wants to do, and it has the same impact of raising taxes. The problem is it's progressive. When I first spend the money (like Wall Street will do), my money is worth more then when it has entered the market.

In my example, if that $500 was to be given to one of my citizens, when he spends it in the market the 1st time, it's worth $500 when it finally gets to everyone else, it's only worth $333. This means the poor gets taxed more then the rich.

If we did #1 or #4, we would be doing the right thing.

#2 or #3 would be the wrong thing to do.

What we are going to do, is #3. Bad idea.

Edit: #2 is not a bad idea in general. Taxation is where money for the government needs to come from. In my example, taxing is fine. In the case of what Congress is trying to do (stimulate the economy), taxing is a bad idea. #3 is always a bad idea.

 

@TheRealMafoo

I think that is not correct. The bailout money is not simply printed. There are very narrow rules for doing that. It would be added to the debt of the United States by issuing new bonds selling securities etc.

It is true that this is the taxpayers money. On the other hand if things work out well it is not lost and will be repaid. While they will loose quite a percentage of the 700b package should they do it, simply because lots of this debt IS bad, the government will most likely make a dollar on two by bailing out AIG, since they now effectively own the company.

On the other hand if the whole financial sector goes down in flames the money would be lost and added to the already huge deficit of the United States.

This bailout plan would be disastrous. I hope Democrats and Republicans can come together and say NO to this deal. If the government should do anything, it should lower the regulatory capital requirements for the financial institutions. This would help alleviate the freeze in the financial markets.