Bullshit. Neither the American nor the European government have given money to bankers. They have LENT it to them. Because otherwise the whole economy would have nose-dived. The difference to China is that we have the infrastructure. The States would need to invest more into maintaining it but in General the streets, ports, powerplants etc. are there. A Chinese nation that still has a billion dirt-poor citizens and which is growing at 10% annually simply needs much more.
I like living in a rich, democratic nation with clean rivers opposed to a pretty autocratic nation where a hundreds of millions of peasants are still in third-world conditions and the rivers will eat the flesh from your bones. (Although its a good thing that they get richer, hopefully also more democratic)

NJ5 said: gomezc said: Hmmm...go figure. Imagine what could get done in the U.S. if money like that was well spend on constructive projects. Exactly... Imagine what could be done for example in terms of energy independence. I mean true solutions, not just the lame "drill baby drill" which won't ever do much to help (according to the US government's own studies).

 

 I was researching about renewable ebergy sources yesterday and I was shocked to see how many people have genine ideas for renewable energy but just can't get the backing. Presumably because it is not a comercially viable option for companies to invest in.

Often at interest rates below inflation, meaning they are indeed giving money away. What about the plans to purchase bad mortgages from banks? Unless you believe there will be another similar bubble in the housing market, that also amounts to giving money away.

Not the one we need, or as much as we need, and in many cases the one we do have needs upgrading. It's worse in the US which is more dependent on oil and cars than Europe. Where's the infrastructure to withstand oil prices as high and higher than the last spike which got curtailed by the recession?

Sure, but what does that have to do with this thread?

@steven787:

Perhaps not much after all ;)

 

In Europe the conditions were pretty good for the government. The interest is pretty much what loans did cost before the whole bubble. Don't know about the conditions in the States. (Although they outright bought AIG and will get money from their investment if the company survives this). Money may be lost but this is hardly stimulating the economy. These plans include giving money to buyers not to banks.



They don't do this yet, do they? Its definitely not happening in Europe, here government intervention works on two levels: Investment in banks (buying parts of them) and guarantees for interbank lending. But yes if they do this and the market drops they will loose money. But that is also not the stumulus package but an attempt to keep the banking sector and with it the whole economy from drowning.



I just wanted to put the "China's response puts the Western governments to shame" into perspective.

To tell the truth I haven't quite kept up with those news (it's harder to find info for some reason).

But regarding the US again, check out today's headlines regarding government-owned Fannie Mae and AIG:

Fannie Mae reports $29 billion 3rd-quarter loss

$29 billion lost in a single quarter, whereas their record yearly profit happened in 2005 at $6.3 billion. Seems hard to count on breaking even on this one.

AIG loses $24.5 billion in the 3rd quarter, requires more gov support

I wonder how the "taxpayer will profit" plan is working out considering things like this. Looks like BS to appease the masses to me. The only ones profiting are the bank owners who were Too Big To Fail ™ and the homeowners who were/are living above their means (until they get kicked out of their houses at least).

 

The problem NJ5 is that the whole economy would have gone down the drains if they wouldn't have rescued AIG. Not just the US but the whole world. So they didn't have much of a choice. Anbd its hardly a stimulus package that is increasing bankers wealth.

The shareholders of AIG got nothing. The shareholders of Lehman lost all their money ...

Yes some money will be lost. And they will not get their money back in the short-term. But its hardly stuffing the pockets of bankers and shareholders. In Europe every CEO and board member who takes public money is limited to 500k earnings (still a nice sum but much less than before)

If you look at bank equity you will see that bank owners lost more than half their money. They may be profiting from their investment being saved from total destruction (with the exception of Lehman who got nothing) but they make no party and the owners are mostly Retirement funds from everybody. Not some rich guys,

well considering how far their infastructure is compared to ours.... I really think in their case it was a must.

Kyros said: The problem NJ5 is that the whole economy would have gone down the drains if they wouldn't have rescued AIG. Not just the US but the whole world. So they didn't have much of a choice. Anbd its hardly a stimulus package that is increasing bankers wealth. The shareholders of AIG got nothing. The shareholders of Lehman lost all their money ... Yes some money will be lost. And they will not get their money back in the short-term. But its hardly stuffing the pockets of bankers and shareholders. In Europe every CEO and board member who takes public money is limited to 500k earnings (still a nice sum but much less than before) The only ones profiting are the bank owners If you look at bank equity you will see that bank owners lost more than half their money. They may be profiting from their investment being saved from total destruction (with the exception of Lehman who got nothing) but they make no party and the owners are mostly Retirement funds from everybody. Not some rich guys,

But I agree that they should rescue AIG. I just think that it should be more controlled, and that it should be accompanied with investment in infrastructure which otherwise won't happen in this economic climate. The governments are (so far) successfully stopping economies from total collapse, but that's not enough.

You're right that shareholders are losing a lot, but that's not the case with many bank executives (of course they might also be shareholders, but that's kind of independent). It's a good thing if you're right about that 500k limit in Europe though.

Yes, and in our case too. Otherwise my prediction above will come true and we're all screwed.

You're right, I just am nervous when governments throw lots of money at things I will have to repay with my taxes when I am older. I am still annoyed about a Easter German port that didn't have one customer. Ever. (The German version of the bridge to nowhere) Although the States could really use some more investment on infrastructure.

The Ghost of RubangB said: We just voted for a bullet train in California that will use renewable energy and create a ton of jobs in California, and it barely passed. Many people thought that spending money on infrastructure was a bad thing to do during the economic crisis, as opposed to a way to get us out. This train will be cheaper, safer, faster, and cleaner than the old ones. California and China know what's up.

 

Well surely the money's got to come from somewhere right? That's why people didn't want to buy out the banks, so why would they want to increase spending on infrastructure?