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View Full Version : Economics Bailout to cost $700 billion


banyon
09-20-2008, 09:34 AM
US administration proposes $700 bln, 2-yr rescue plan
1 hour ago

http://afp.google.com/article/ALeqM5gUzqTEIao4ZHSEu8AeNx3l_CctbQ

WASHINGTON (AFP) ó President George W. Bush's administration has proposed a 700-billion-dollar bailout of the troubled financial sector over a two-year period, according to a draft proposal sent to Congress and released Saturday.

The unprecedented plan would give Treasury Secretary Henry Paulson sweeping authority to buy up to 700 billion dollars of tainted mortgage-related assets to stem a grave financial crisis, said the draft law, posted on US media websites.

"The Secretary's authority to purchase mortgage-related assets under this Act shall be limited to 700,000,000,000 dollars outstanding at any one time," the draft law states.

The plan also allows for an increase in the public debt limit, to 11.3 trillion dollars, and grants the treasury secretary powers to buy, sell and hold residential and commercial mortgages as well as securities based on those mortgages.

The extraordinary authority would expire in two years but would permit the government to hold the assets purchased for as long as the Treasury Department believes is necessary, it said.

The rescue calls for the purchase of assets only from US-based firms and grants the Treasury Department legal immunity from any lawsuits as part of the bailout proposal.

It remained unclear how the government would manage the assets it buys. But under the plan Paulson would have authority to turn to private financial institutions to carry out the operation or create other bodies to purchase mortgage assets and issue debt.

News of the proposed rescue plan fueled a powerful market rebound on Friday.

Donger
09-20-2008, 09:37 AM
Bailing out the gullibility of my fellow citizens, nice.

banyon
09-20-2008, 09:40 AM
Bailing out the gullibility of my fellow citizens, nice.

What is that supposed to mean?

Donger
09-20-2008, 09:41 AM
What is that supposed to mean?

Sub-prime loans.

chiefforlife
09-20-2008, 09:47 AM
While I dont like this at all, is there any other way?

banyon
09-20-2008, 09:47 AM
Sub-prime loans.

Thank God there was no unfounded speculation or undue risk taken by financial institutions in this matter.

Donger
09-20-2008, 09:48 AM
Thank God there was no unfounded speculation or undue risk taken by financial institutions in this matter.

There's no point in having a seller if there aren't any buyers.

Programmer
09-20-2008, 09:49 AM
While I dont like this at all, is there any other way?

You can't ask that, the trend is to attack the action regardless of if there was another way or not.

What was the option if there was no action taken?

Programmer
09-20-2008, 09:50 AM
There's no point in having a seller if there aren't any buyers.

Can't use common sense here, it's all got to blamed on the administration.

prhom
09-20-2008, 09:51 AM
I'm kinda pissed that I missed both the real estate boom, making a killing off selling subprime loans, AND getting myself bailed out of a bad mortgage. The only thing I'm gonna get is the tax bill for all of that -- great!

jAZ
09-20-2008, 09:51 AM
Bailing out the gullibility of my fellow citizens, nice.
Who was gulible?

chiefforlife
09-20-2008, 09:52 AM
When Iraq pays us back, we will be fine...

banyon
09-20-2008, 09:53 AM
There's no point in having a seller if there aren't any buyers.

Right and if the financial institution finds one of these gullible suckers, then they should be held totally blameless for leveraging that mortgage 30 or forty times over knowing that it wouldn't be repaid. I mean it's free money, right?

Donger
09-20-2008, 09:55 AM
Right and if the financial institution finds one of these gullible suckers, then they should be held totally blameless for leveraging that mortgage 30 or forty times over knowing that it wouldn't be repaid. I mean it's free money, right?

Blameless? No. There's plenty to go around, including the people who couldn't or wouldn't read their loan documents.

Donger
09-20-2008, 09:55 AM
Honestly, I don't see why Democrats would be upset about this bailout.

tiptap
09-20-2008, 09:59 AM
Main street people bit and lost on a real tangible asset as opposed to upstream repackaging, by security firms, in order to avoid prudent right off that would hurt the bottom line and their bonuses for executives.

banyon
09-20-2008, 10:01 AM
Honestly, I don't see why Democrats would be upset about this bailout.

I don't know why Democrats aren't upset, but I'll agree that they're not upset.

For everyday Americans though, it's nothing but a raw deal.

Donger
09-20-2008, 10:03 AM
I don't know why Democrats aren't upset, but I'll agree that they're not upset.

For everyday Americans though, it's nothing but a raw deal.

They can't be upset. Government intervention is not only expected, but preferred in many cases.

tiptap
09-20-2008, 10:05 AM
The Dems are going to go home and I don't think they will go back after the week end ready to rubber stamp. They can't afford to let the Bush administration set the timing for this.

tiptap
09-20-2008, 10:06 AM
They can't be upset. Government intervention is not only expected, but preferred in many cases.

Not for Wall Street with their complicity.

RINGLEADER
09-20-2008, 10:08 AM
$700b? That's what they're telling us. I suspect it will be much higher.

They really didn't have a choice, however. Without clearing off the balance sheets you would have seen lending stop and then there would have been a fairly immediate impact on business, then jobs, then the overall economy.

I wouldn't lay the blame entirely at the feet of those who obtained sub-prime loans. Sure they have some responsibility but the ability to give bad loans to unqualified borrowers is where the problem began and both parties are responsible for that mess.

Donger
09-20-2008, 10:10 AM
Not for Wall Street with their complicity.

Ah, I see. Government bailouts are fine for the buyer, but not the seller.

Zero personal responsibility?

RINGLEADER
09-20-2008, 10:10 AM
The Dems are going to go home and I don't think they will go back after the week end ready to rubber stamp. They can't afford to let the Bush administration set the timing for this.

If the Dems don't rubber stamp it then the entire economy will fail and fail rather rapidly. The Dems play politics with this at their peril because, like it or not, if they don't approve it the results will be tied to their actions (or lack thereof).

Donger
09-20-2008, 10:12 AM
$700b? That's what they're telling us. I suspect it will be much higher.

They really didn't have a choice, however. Without clearing off the balance sheets you would have seen lending stop and then there would have been a fairly immediate impact on business, then jobs, then the overall economy.

I wouldn't lay the blame entirely at the feet of those who obtained sub-prime loans. Sure they have some responsibility but the ability to give bad loans to unqualified borrowers is where the problem began and both parties are responsible for that mess.

I agree completely. I would, however, like to hear someone (anyone) also lay some of the blame on the recipients of these loans.

RINGLEADER
09-20-2008, 10:12 AM
Ah, I see. Government bailouts are fine for the buyer, but not the seller.

Zero personal responsibility?

Not to get in the middle of this guys but the who's at fault ship has sailed. It is smart to create a fund that is large enough to remove the uncertainty from the markets regardless of who and how we got here.

tiptap
09-20-2008, 10:15 AM
This is like WMD and immediate threat.

jAZ
09-20-2008, 10:16 AM
Who was gulible?

Donger?

tiptap
09-20-2008, 10:17 AM
Yes let's rush end now. No I say wait until the new administration and let them shape the solution. We have an election to determine the priorities in this.

Donger
09-20-2008, 10:17 AM
Donger?

Yes?

tiptap
09-20-2008, 10:19 AM
Not to get in the middle of this guys but the who's at fault ship has sailed. It is smart to create a fund that is large enough to remove the uncertainty from the markets regardless of who and how we got here.

That is convenient view. Can't we at least remove the captain.

jAZ
09-20-2008, 10:21 AM
Yes?

Who was gulible (other than me for letting you push me into repeating myself when the question has been avoided twice already)?

banyon
09-20-2008, 10:21 AM
Ah, I see. Government bailouts are fine for the buyer, but not the seller.

Zero personal responsibility?

What government bailout for the buyer is on the table? AFAIK it's just "congrats, here are your foreclosure papers".

jAZ
09-20-2008, 10:22 AM
I agree completely. I would, however, like to hear someone (anyone) also lay some of the blame on the recipients of these loans.
Talk to Andrew Sullivan.

RINGLEADER
09-20-2008, 10:22 AM
That is convenient view. Can't we at least remove the captain.

:shake:

OK. Let's do it your way. I hope the Dems don't approve it because it might help one political party over the other.

You really would cut your nose off to spite your face wouldn't you.

Try reading up on the subject. There's a lot of information out there. I'll even help you with one that has some good behind the scenes information about what went down.

http://online.wsj.com/article/SB122186563104158747.html

tiptap
09-20-2008, 10:24 AM
We did do it your way. And now you want to advice me again.

Donger
09-20-2008, 10:25 AM
Who was gulible (other than me for letting you push me into repeating myself when the question has been avoided twice already)?

The people who signed sub-prime loans, obviously.

banyon
09-20-2008, 10:26 AM
The people who signed sub-prime loans, obviously.

You don't get how this happened at all.

tiptap
09-20-2008, 10:27 AM
You need to go slow enough for me to follow the money. If I am uninformed, I won't trust the advocate of wall street to be balanced.

Donger
09-20-2008, 10:28 AM
What government bailout for the buyer is on the table? AFAIK it's just "congrats, here are your foreclosure papers".

From what I've read, the Democrats are insisting that the bailout include provisions such as "mortgage help" to avoid foreclosures.

Donger
09-20-2008, 10:28 AM
You don't get how this happened at all.

Please feel free to educate.

banyon
09-20-2008, 10:30 AM
From what I've read, the Democrats are insisting that the bailout include provisions such as "mortgage help" to avoid foreclosures.

As well it should if we're going to bail out big business. Personally, I'm not for bailing out either, but it should be balanced either way.

jAZ
09-20-2008, 10:30 AM
The people who signed sub-prime loans, obviously.

Well, two people sign the loans (lenders and borrowers). Which are you talking about?

Donger
09-20-2008, 10:32 AM
Well, two people sign the loans (lenders and borrowers). Which are you talking about?

The borrowers. Perhaps the government can spend a few hundred million on a modern-day PSA of "buyer beware."

RINGLEADER
09-20-2008, 10:33 AM
We did do it your way. And now you want to advice me again.

I don't want to advice [sic] you -- you can believe whatever you want to believe and vote for whoever you think best suits those beliefs as you should. All I'm saying is that if this isn't signed into law in the next week there will be a full collapse of the markets that teetered on the brink of collapse last week.

And it should be noted that, once this is law, pretty much all of the economic plans that either candidate has right now are going to be rendered moot.

Donger
09-20-2008, 10:33 AM
As well it should if we're going to bail out big business. Personally, I'm not for bailing out either, but it should be balanced either way.

My views aren't dissimilar. I would like the blame to be shared, however.

RINGLEADER
09-20-2008, 10:35 AM
The borrowers. Perhaps the government can spend a few hundred million on a modern-day PSA of "buyer beware."

The NINJA loans shouldn't have been requested by a large portion of the people who received them. But, then again, the de-regulations in place to prevent their issuance in the first place should never have been sought or signed into law. And both parties are responsible for that irrespective of what the candidates say.

jAZ
09-20-2008, 10:37 AM
Bailing out the gullibility of my fellow citizens, nice.
The borrowers.
Where in the opening post or the Bush/Paulson proposal does it talk about or what of that $700B will be spent on bailing out borrowers at all?

banyon
09-20-2008, 10:38 AM
Please feel free to educate.

AMY GOODMAN: How did it get to this point? How did it go beyond insurance?


NOMI PRINS: In AIG and in Lehman and with Merrill and every other company on Wall Street that has faltered or is faltering, itís about taking on too much leverage and borrowing to take on the risk and borrowing again and borrowing again, twenty-five to thirty times the amount of capital, the amount of money that they had to basically back the borrowing that they were doing. Human regular borrowers cannot do this. This is something that is an item only of the banking industry.


And not only was all that borrowing happening, but there was no transparency to the Fed, to the SEC, to the Treasury, to anyone who would have even bothered to look as to how much of a catastrophe was being created, so that when anything fell, whether it was the subprime mortgage or whether it was a credit complex security, it was all below a pile of immense interlocked, incestuous borrowing, and thatís what is bringing down the entire banking system
http://www.democracynow.org/2008/9/17/us_seizes_control_of_aig_with
or:

http://www.chiefsplanet.com/BB/search.php?searchid=224889

or

<embed id="VideoPlayback" src="http://video.google.com/googleplayer.swf?docid=-9050474362583451279&hl=en&fs=true" style="width:400px;height:326px" allowFullScreen="true" allowScriptAccess="always" type="application/x-shockwave-flash"> </embed>

banyon
09-20-2008, 10:39 AM
My views aren't dissimilar. I would like the blame to be shared, however.

When one party is the far more sophisticated and informed in a transaction, that's not really fair.

Donger
09-20-2008, 10:42 AM
Where in the opening post or the Bush/Paulson proposal does it talk about or what of that $700B will be spent on bailing out borrowers at all?

It doesn't, as far as I know. I was responding to the Schumer's words:

"Sen. Chuck Schumer, D-N.Y., called the proposal "a good foundation," but raised concerns it "includes no visible protection for taxpayers or homeowners."

Donger
09-20-2008, 10:44 AM
http://www.democracynow.org/2008/9/17/us_seizes_control_of_aig_with
or:

http://www.chiefsplanet.com/BB/search.php?searchid=224889

or

<embed id="VideoPlayback" src="http://video.google.com/googleplayer.swf?docid=-9050474362583451279&hl=en&fs=true" style="width:400px;height:326px" allowFullScreen="true" allowScriptAccess="always" type="application/x-shockwave-flash"> </embed>

Surely you are not asserting that sub-prime loans and people living with debt well beyond their means aren't responsible for this situation, are you?

patteeu
09-20-2008, 10:44 AM
Not to get in the middle of this guys but the who's at fault ship has sailed. It is smart to create a fund that is large enough to remove the uncertainty from the markets regardless of who and how we got here.

Amen. Just as in the 9/11 attacks, it's important to understand how this happened, but it's counterproductive to get caught up in the blame game. The important thing is to figure out what to do next.

Donger
09-20-2008, 10:45 AM
When one party is the far more sophisticated and informed in a transaction, that's not really fair.

I didn't say it was "fair." I said that the buyer also shares responsibility.

Mr. Laz
09-20-2008, 10:47 AM
Go Big Government!!!!

jAZ
09-20-2008, 10:47 AM
It doesn't, as far as I know. I was responding to the Schumer's words:

"Sen. Chuck Schumer, D-N.Y., called the proposal "a good foundation," but raised concerns it "includes no visible protection for taxpayers or homeowners."
Kudos to you for admitting your post in response to this thread has nothing to do with this thread.

KILLER_CLOWN
09-20-2008, 10:50 AM
Dodd: US financial system near meltdown

Press TV
Saturday, September 20, 2008

The US may be days away from a complete catastrophic meltdown of its financial system, says Senate Banking Committee chairman Chris Dodd.

“I’ve been here 28 years. To listen to the language of last evening, we maybe days away from a complete meltdown of our financial system,” AFP quoted Dodd as saying while referring to the late Thursday meeting of the US Congressional leaders with the US Treasury Secretary Henry Paulson and the Federal Reserve Chairman Ben Bernanke.

Senator Dodd noted it was “one of the rare moments, certainly rare in my experience here, that Democrats and Republicans decided we needed to work together, quickly.”

“We’re talking hundreds of billions,” Paulson said ahead of talks with Congress on details of the massive rescue effort, unveiled initially late Thursday.

Stunned by the depth of the economic meltdown of the US financial institutions, Congressional leaders pledged a quick vote on the rescue plan.

“I figure it will be at least half a trillion,” Richard Shelby, the Ranking member of the Banking Committee, Housing and Urban Affairs Committee, told ABC news network.

“But if you look at what the Fed has already done, and the extension of power to Treasury to deal with Fannie Mae and Freddie Mac, I believe we’re talking about a trillion dollars,” he added.
US President George W. Bush has admitted confidence in the US economy has been shaken as he promised more tax dollars to save Wall Street from bad debt.

“Confidence in our financial system and in its institutions is essential to the smooth operation of our economy, and recently that confidence has been shaken,” he said

The government plan provides an immediate $50 billion to shore up strained financial markets. A state-sponsored organization will then be given hundreds of billions more in government money to buy up bad debt accumulated over years of unregulated lending by the US financial services sector.

The Fed has spent hundreds of billions of dollars in the past year to stabilize the financial markets, including $180 billion swap lines extended Thursday to five other major central banks.

Early September, the Treasury Secretary announced that the government was seizing control of ailing mortgage finance giants Fannie Mae and Freddie Mac that supply almost half of all mortgages in America to prevent a collapse that would have seriously damaged the world economy.

Last year these two mortgage companies’ sustained losses of more than $14 billion, as so called ’sub-prime’ homeowners defaulted on their mortgage repayments. The bailout of these two financial institutions could cost up to $200 billion.

http://www.presstv.ir/detail.aspx?id=70011&sectionid=3510203

banyon
09-20-2008, 10:51 AM
Surely you are not asserting that sub-prime loans and people living with debt well beyond their means aren't responsible for this situation, are you?

If you are talking a comparative negligence scenario then I think I would go something like 5% on the homeowners, 95% on the investment banks buyng and speculating and borrowing against the bad loans.

There have always been people who defaulted on their mortgages, there haven't been investment banks doing the sorts of things with these mortgages that were done.

Nightfyre
09-20-2008, 11:00 AM
:shake:

KILLER_CLOWN
09-20-2008, 11:09 AM
Apocalypse Now?: New world order could have devastating implications for Western nations

Last updated at 1:23 AM on 20th September 2008

Almost exactly seven years ago Al Qaeda terrorists targeted their hijacked planes into the Twin Towers at the heart of New York’s financial centre — and the world was transformed.

There were no deaths this week, but the effects of the carnage on the financial
markets will be far more profound and destabilising than the 9/11 atrocity.

For almost all of us, it will, I predict, be a change for the worse, and for a large
minority the consequences will be extremely distressing.

Here comes the apocalpse: Is the Western world entering a nightmare scenario, as depicted by Edvard Munch?

The Western world — Britain, Europe and the U.S. — has moved from excess to
austerity overnight. This week’s financial typhoon will savagely impact living
standards.

In due course, it will topple governments and lead to a permanent transfer of
economic and political power from Europe and America to the emergent and, in some
cases, such as China, semi-barbarous economies in the East.

I know I will be accused of being unnecessarily apocalyptic and irresponsibly
negative, but I believe that the greatest mistake we can now make is to
downplay the seriousness of the situation and bury our heads in the sand.

The seismic events which have seen the near-destruction of the investment banking sector and the collapse of insurance giant AIG are on the scale of the Great Crash of 1929.


That was such a disaster because it created conditions for the emergence of fascism in continental Europe and then World War II.

Although it is hard to predict the consequences, we should expect ramifications of equal significance — including the re-emergence of violent Far Right parties across the globe.

Some experts were talking this week as if the financial crisis was nearly over. They
could not be more wrong. The downturn has only just begun — and for most citizens
uninvolved with finance the consequences have not been felt at all.

But they will be felt very soon and very brutally. The British economy is in the same position as the Texan coast earlier this month as Hurricane Ike approached — apparently calm, with life going on as normal, but an almighty storm is raging just
over the horizon and heading our way with terrifying speed.

We can expect a sharp increase in personal bankruptcies. Yet the numbers will not peak until this time next year at the earliest.

Hundreds of thousands of people will lose their jobs, with many forced to sell their houses. Property prices will slump.

There will be extreme human suffering, panic and despair. Many careers will be
destroyed. This is considerably worse than the downturn of the early 1990s.

The orthodoxy from the British Government, the Confederation of British Industry and elsewhere that there will be a mild slowdown ending late next year is nonsense.

This crisis is vicious, dynamic and only just beginning.


Even those of us lucky enough not to lose our jobs and our homes will have friends and relatives who do.

Let us examine, first, the fate of City bankers from firms such as Lehman Brothers — all summarily dismissed when their firm went under this week.

They will receive no severance payment and almost no chance ever again of benefiting from the six-figure salaries and massive bonuses they have taken for
granted over the past few years.

That means they cannot service the huge mortgages they have taken out on hugely expensive houses. So this weekend they have become forced sellers — which means that thousands of new For Sale signs will be going up in London and the South-East
in the coming weeks.

Personal bankruptcy:Traders and investment bankers face an uncertain future

If these unemployed investment bankers had the misfortune to buy anywhere near the top of the market, they now face the prospect of personal bankruptcy.

This is because they will find that their houses are worth much less than they paid for
them, and will therefore be unable to repay their loan.

With so many vendors on the market obliged to sell at any price, it can be assumed that any London house will fetch 25 per cent less this weekend than it would have done this time last week.

Many of the younger bankers — those in their 20s and 30s with young families — now face utter disaster.

Of course, there is scant public sympathy for these former ‘masters of the universe’ who enjoyed good times.

But we already know that Thursday’s merger of Lloyds Bank and HBOS (supposing it
is completed: contrary to statements by Chancellor Alistair Darling, this is by no means certain) will lead directly to the loss of some 40,000 jobs among
bank workers.

There will be bloodletting on every High Street where there is both an HBOS and Lloyds outlet — one branch will undoubtedly be closed.


But that body-blow is just the start. Over the coming months, the financial typhoon will mercilessly spread outwards and wreak devastation on the economy.

Banks will foreclose on thousands of small businesses.Massive corporate failures are inevitable.


These disasters will then rebound on the financial sector, as company bankruptcies
and plunging house prices force fresh balance sheet write-downs and yet more sackings.

Unemployment — already rising fast and up 80,000 over the summer — is set to surge ahead and will increase well above the two million predicted by economists.

This will produce a vicious spiral. Every worker out of a job means less tax receipts and higher welfare payments.


In last March’s Budget (a work of fiction when it was published), Alistair Darling forecast borrowing this year of £43 billion. Even at the time, this figure was shockingly large.


It meant that only Egypt, Pakistan and Hungary among significant world economies had more profligate government spending than Britain.

As of this weekend, Government borrowing is out of control.

It will soar nearer £100 billion next year — more than double Darling’s estimate. This will cast doubt about Britain’s ability to finance our debt in the international
credit markets.

The International Monetary Fund has already warned Darling about his reckless spending. In the months to come, it will demand cuts in government spending, just as it did in the 1970s when the then Labour Chancellor, Denis Healey, had to beg for an IMF loan.


Warned: Government borrowing is twice Chancellor Alistair Darling's estimate and has bought a rebuke from the IMF

Darling will have to take urgent, painful action to reverse the splurge of recent expenditure — welcomed by financially ignorant Labour MPs — on public services, in particular health and education.

And whereas the responsible wing of the Labour Government, as it did in the 1970s, will support this prudence, the Left will call for extra spending to save jobs.

It is likely that the Labour Party will split on this issue — just as it did in the aftermath of the Crash in 1931 and again at the start of the 1980s. In the medium term, the only resolution to this debt crisis is a rise in inflation, as governments are forced to print money to fend off depression.


Savers should thus brace themselves for the return of double-digit price rises not seen since the early 1980s.

Driven by poverty, crime will also soar — particularly crimes against property. We should also brace ourselves for a return of political violence to the streets.


Certainly the British National Party will use the economic downturn to agitate against
immigrants, accusing them of having ‘stolen British jobs’.

The BNP made some striking gains at last May’s elections, and these will continue in the European elections next June.

This is the troubling prospect we face. But the worldwide consequences are just as
significant and we can expect the Euro to fail under the strain of economic collapse.

The Euro has never been tested by adversity. The single currency’s architects made one foolish mistake when they set it up ten years ago: they established monetary union ahead of political union.

In long-established democracies such as Britain and the United States, it is natural for one area of the country to help the other in times of difficulty.

For instance, there was no strong objection when taxpayers in the South were asked to bail out Northern Rock, even though its operations were concentrated in the North-East.


Fascist threat: Far right parties such as Jean-Marie Le Pen's FN in France could exploit the situation

However, that is not the case in mainland Europe where French taxpayers would refuse to contribute huge sums to bail out, say, the Italian banking sector.

That is why the Euro is likely to be destroyed by the coming economic storm — just as Britain’s membership of the European monetary system was smashed on Black Wednesday 1992.

The truth is that this week’s seismic events will come as a crashing humiliation to the European political class.

Like in Britain, this crisis will be exploited by the Far Right in countries such as France, Holland and Austria.

These countries have powerful neo-fascist parties which will relish recession, in particular singling out for blame ethnic minorities, just as the Nazis did in Germany after the 1929 crash.


The good news is that Britain — despite the efforts of Tony Blair and others — remains outside the Euro.


It means we can control our interest rates and allow the pound to depreciate, unlike so many European countries, some of which (such as Ireland) are already being devoured by recession.


Wall Street Crash: The US became more insular after the stock market crashed in 1929
But the biggest worry is what will happen in the U.S. Ever since the end of World War II, America has been the world’s policeman.


It has been able to play this role, and see off perceived enemies, such as Soviet Russia and Saddam Hussein’s Iraq, because for the past 60 years it has been the greatest global economic power.

The most important question facing the world today is whether the U.S. — already crippled by the estimated $2 trillion cost of financing the Iraq occupation — can afford to continue its global role.

The historical precedent is far from encouraging.

After the 1929 crash, the U.S. turned in on itself, resorting to protectionism.

It re-engaged with the world only after the attack by Japan at Pearl Harbour in December 1941.

It is too early to say for sure, but it is possible that America is at a similar turning point in its history.

President Bush’s decision to pour taxpayers’ money into so many bankrupt financial institutions has led to an explosion of U.S. national debt which will be hugely exacerbated by yesterday’s move in Washington.

As a result, U.S. global creditworthiness is in jeopardy, and it is likely that at some stage over the next decade the dollar will lose its unchallenged status as the world’s reserve currency.

There are signs that this process has already begun.

For this weakening of the currency was the fate of sterling in the economic crisis of the 1930s.

Indeed, the subsequent decision to take the pound off the Gold Standard in 1931 marked the effective end of the British Empire.

Rising power: China has emerged as a threat to US power, and the recent Beijing Olympics have only added to its stature

America’s global dominance — already threatened by the emergence of rival economic powers such as China — may soon be coming to its end.

The U.S. will probably retreat inwardly, becoming isolationist, at any rate temporarily — opening the way to a new and even more menacing global order.

It is inevitable that America will soon withdraw from Iraq, leaving its bitter enemy, Iran, unchallenged as the dominant regional power.

China will become ever more assertive and will want to humiliate Washington by seizing control of Taiwan, something the White House will be powerless to resist. It will move on to threaten nearby India.

Africa will become the scene of proxy wars between China and the West, just as it was the scene of proxy wars between the United States and Soviet Russia for much of the post-war period.

China, much to U.S. fury, will also start to meddle in Latin America.

The world that will emerge from the Great Crash of 2008, therefore, will be dark and unpredictable.

This weekend, all sensible families will go through their finances, anticipate the inevitable problems that lie ahead, and cut back at once on unnecessary spending such as eating out, second cars and foreign holidays.

For the past 25 years we have lived through a glorious party.

We have all — governments, companies, banks and, of course, consumers — lived beyond our means and are paying the price.

This weekend the hangover begins. It will be prolonged.

Life will be much closer to the austerity that followed World War II than the frenzied, debt-fuelled boom of the past two decades.

Perhaps our lives will be none the worse for all this. Our values will certainly change — many will say not before time.


Material objects should count for much less.

Almost overnight we have entered a new world, and we must learn to make the best of it.

http://www.dailymail.co.uk/news/article-1058601/Apocalypse-Now--New-world-order-devastating-implications-Western-nations.html

SBK
09-20-2008, 12:04 PM
The good thing is that the $700B is nowhere near what the actual cost will end up being.

Even better, just as bankers learned in the 80's after the S&L crisis that the government will bail them out, they've seen it again. They screwed up, got bailed out, then figured out a whole new way to make even more money and screw up even bigger, and DC came right in and bailed them out again.

15-20 years from now the mess we're in today will be nothing compared to the mess that will be made because of this bailout. Every good banker knows he can take unnecessary risk because his friends in Washington DC will bail him out when he takes on water.

Mortgage the future, the American way.

splatbass
09-20-2008, 12:10 PM
Ah, I see. Government bailouts are fine for the buyer, but not the seller.

Zero personal responsibility?

Has the government bailed out the people who lost their homes? I haven't heard anything about that. All I've heard is that the companies that sold them the mortgages - knowing that they couldn't pay - got bailed out. Please show me an example of the government bailing out someone who lost their home because they couldn't afford the mortgage. Just one example will do.

Donger
09-20-2008, 02:26 PM
Kudos to you for admitting your post in response to this thread has nothing to do with this thread.

It has nothing to do with this thread? I made it a part of this thread, because it has to do with the topic being discussed, e.g., the bailout. It sounds like Schumer is going to try to add on a bunch of "feel good" stuff, including protecting against foreclosures.

banyon
09-20-2008, 02:27 PM
It has nothing to do with this thread? I made it a part of this thread, because it has to do with the topic being discussed, e.g., the bailout. It sounds like Schumer is going to try to add on a bunch of "feel good" stuff, including protecting against foreclosures.

bailing out the investment banks is not "feel good" for them?

Donger
09-20-2008, 02:27 PM
If you are talking a comparative negligence scenario then I think I would go something like 5% on the homeowners, 95% on the investment banks buyng and speculating and borrowing against the bad loans.

There have always been people who defaulted on their mortgages, there haven't been investment banks doing the sorts of things with these mortgages that were done.

Again, I said "gullibility." The lenders have certainly been greedy.

No one forced these people to sign sub-prime loan documents, did they?

banyon
09-20-2008, 02:28 PM
Again, I said "gullibility." The lenders have certainly been greedy.

No one forced these people to sign sub-prime loan documents, did they?

No one forced those Chinese people to buy toxic baby food either. They're probably also to blame?

Donger
09-20-2008, 02:28 PM
bailing out the investment banks is not "feel good" for them?

I doubt it, but maybe it does. Didn't Barack Hussein get a bunch of campaign cash from Fannie?

banyon
09-20-2008, 02:30 PM
I doubt it, but maybe it does. Didn't Barack Hussein get a bunch of campaign cash from Fannie?

Yes, Fannie and Freddie gave to both candidates in pretty significant chunks. Of course, they had a lot of our money laying around to spend before we gave it back to them in tax dollars.

MahiMike
09-20-2008, 02:39 PM
The dollar is now worth about 100 lire. All I wanna know is, can I just stop making my mortgage payment(s) now?

Calcountry
09-20-2008, 02:59 PM
$700b? That's what they're telling us. I suspect it will be much higher.

They really didn't have a choice, however. Without clearing off the balance sheets you would have seen lending stop and then there would have been a fairly immediate impact on business, then jobs, then the overall economy.

I wouldn't lay the blame entirely at the feet of those who obtained sub-prime loans. Sure they have some responsibility but the ability to give bad loans to unqualified borrowers is where the problem began and both parties are responsible for that mess.
No, the problem is bigger than the sub prime, mortgage thing.

People were withdrawing their money from money market accounts to the point, that the banks were hording huge sums of cash in order to make sure they could redeem them. They wouldn't even loan money to other banks, which is done every day.

People were investing the cash in short term government bonds to the point that the yield went to zero percent, iow, they were willing to take no return, just insure that I will get my money back.

Long story short, a classic PANIC, was about to ensue, which means a collapse of the entire banking system. That's right, bring that credit card into my store, I swipe it, and the message I get back is not decline, not call bank, not accept, but WTF?

We are still not out of the woods. How many of you have thought about shifting your assets around in a precautionary way? Well, that is what is called the fallacy of composition: What is good for the individual is not necessarily true of the whole.

Calcountry
09-20-2008, 03:00 PM
Yes, Fannie and Freddie gave to both candidates in pretty significant chunks. Of course, they had a lot of our money laying around to spend before we gave it back to them in tax dollars.Who has two former chairmen working on their campaign?

banyon
09-20-2008, 03:03 PM
Who has two former chairmen working on their campaign?

Who has the architect of GLB as their chief economic advisor?

Donger
09-20-2008, 03:10 PM
No one forced those Chinese people to buy toxic baby food either. They're probably also to blame?

If the ingredient label included "toxic stuff" and they didn't bother to read it? Yes.

Donger
09-20-2008, 03:11 PM
Yes, Fannie and Freddie gave to both candidates in pretty significant chunks. Of course, they had a lot of our money laying around to spend before we gave it back to them in tax dollars.

How much did each give to the candidates, respectively?

KILLER_CLOWN
09-20-2008, 03:14 PM
If the ingredient label included "toxic stuff" and they didn't bother to read it? Yes.

I'm sure it's labeled as that.

banyon
09-20-2008, 03:17 PM
If the ingredient label included "toxic stuff" and they didn't bother to read it? Yes.

Right, the mortgage documents and deals were just that transparent.

Listen, I've talked to these people about contracts. You're not selling this to me.

Donger
09-20-2008, 03:17 PM
I'm sure it's labeled as that.

The bottom line is that most people know what they can afford. If a person making $50,000/year gets approved for a $500,000 loan, their common sense should tell them that something is up.

Donger
09-20-2008, 03:20 PM
Right, the mortgage documents and deals were just that transparent.

Listen, I've talked to these people about contracts. You're not selling this to me.

You made the analogy, not me.

I'm not "selling" anything, BTW. I'd just like to see some more personal responsibility in this country. I'd like some of these folks to stop acting the victim and say, "You know what? I bit off WAY more than I could chew."

If there was something in the loan documents that they didn't understand, you can ask for clarification. If they didn't...

Baby Lee
09-20-2008, 03:33 PM
Should point out that 'cost' is the price of the asset. Time will tell if the asset is a meal that is eaten and pooped out or if it appreciates back to the government's benefit.

Donger
09-20-2008, 03:35 PM
Should point out that 'cost' is the price of the asset. Time will tell if the asset is a meal that is eaten and pooped out or if it appreciates back to the government's benefit.

Indeed. I'm hopeful that we actually turn a profit and use it to pay down the debt.

Wait, I think I feel a monkey crawling out of my butt!

tiptap
09-20-2008, 03:36 PM
Gee this has been my argument about not spending money on infrastructure in the US and spending money of the War in Iraq.

tiptap
09-20-2008, 03:38 PM
Of course a corpulent man's banquet has only marginal gain compared to the dining of a working family.

***SPRAYER
09-20-2008, 04:16 PM
The bottom line is that most people know what they can afford. If a person making $50,000/year gets approved for a $500,000 loan, their common sense should tell them that something is up.


These people were planning on flipping the house, but didn't count on being the one's holding the bag when the bubble burst.

banyon
09-20-2008, 04:18 PM
So someone who takes one bad loan and isn't able to pay it back is certainly worse than the people who took that same loan they knew to be bad and borrowed against it 20 or 30 times?

Logical
09-20-2008, 04:20 PM
I expect this number to keep going up, we will be lucky if it stops at 1.5 trillion.

***SPRAYER
09-20-2008, 04:23 PM
So someone who makes one bad loan is certainly worse than the people who took that same loan they knew to be bad and borrowed against it 20 or 30 times?

If somebody buys a house with no money down, with an interest only payments knowing that the interest rate will adjust (go up) in a few years AND ISN'T PLANNING TO FLIP IT FOR THE EQUITY is a friggin' retard.

OK? Enough of this nonsense that these people were duped. I bet half of them were in cahoots with the real estate broker.

banyon
09-20-2008, 04:25 PM
If somebody buys a house with no money down, with an interest only payments knowing that the interest rate will adjust (go up) in a few years AND ISN'T PLANNING TO FLIP IT FOR THE EQUITY is a friggin' retard.

OK? Enough of this nonsense that these people were duped. I bet half of them were in cahoots with the real estate broker.

So your answer is yes, the people who were unable to pay a loan back and will be foreclosed upon or file bankruptcy and suffer the consequences are morally more objectionable than the people who madethe bad loans and knowingly and with expertise in the area borrowed against those bad loans 20-30 times the amount of those bad loans and are going to be bailed out?

You anger toward them is certainly understandable. How dare they get foreclosed on and/or file for bankruptcy! Greedy *****s!

WilliamTheIrish
09-20-2008, 04:26 PM
I disagree with the decision to bail out F&F. Their lending practices are precisely what landed them in the situation they are currently in. Obviously that would lead to a lot of unemployment with a ripple effect throughout the economy.
As long as it's afloat it's just going to remain a huge albatross and the needed correction to the market won't take place.

"Too big to fail" is a misnomer.

"Too big to be bailed out" is how we should be looking the situation.

***SPRAYER
09-20-2008, 04:32 PM
So your answer is yes, the people who were unable to pay a loan back and will be foreclosed upon or file bankruptcy and suffer the consequences are morally more objectionable than the people who madethe bad loans and knowingly and with expertise in the area borrowed against those bad loans 20-30 times the amount of those bad loans and are going to be bailed out?


Why are there so many shades of gray with libs? :D

Let me break it down for ya...

Real estate broker explains to pigeon:

I can get you a loan from the bank for 300 grand even though based on your income and credit report, you do not qualify. You will make interest only payments, and in 2 years the rate will adjust astronomically---

But not to worry, because before that happens this house will be worth 375 grand and we can re-sell it for a huge profit.

Pigeon takes the deal. Spends the next few years making the interest only payments, while taking out home equity loans as the value of the home increases.

Housing bubble bursts. The pigeon can't unload the house. The pigeon is in deep shit.

Why should I, or anybody else in this country feel obligated to help this person out?

banyon
09-20-2008, 04:34 PM
Why are there so many shades of gray with libs? :D

Let me break it down for ya...

Real estate broker explains to pigeon:

I can get you a loan from the bank for 300 grand even though based on your income and credit report, you do not qualify. You will make interest only payments, and in 2 years the rate will adjust astronomically---

But not to worry, because before that happens this house will be worth 375 grand and we can re-sell it for a huge profit.

Pigeon takes the deal. Spends the next few years making the interest only payments, while taking out home equity loans as the value of the home increases.

Housing bubble bursts. The pigeon can't unload the house. The pigeon is in deep shit.

Why should I, or anybody else in this country feel obligated to help this person out?

Why do you keep saying we are helping these people out?

***SPRAYER
09-20-2008, 04:38 PM
Why do you keep saying we are helping these people out?

One example:

http://www.msnbc.msn.com/id/22345416/

Donger
09-20-2008, 04:40 PM
Why do you keep saying we are helping these people out?

You think that the government, as holders of these loans now, are going to continue to allow mass foreclosures?

That isn't going to happen, IMO. Democrats are already making that clear.

banyon
09-20-2008, 04:42 PM
One example:

http://www.msnbc.msn.com/id/22345416/

We won't tax them after they are foreclosed on and the seller doesn't pursue the deficiency?

Man that is a sweet deal! It's just like handing them $700 billion directly from the Treasury. Those greedy f****ing foreclosed mortgagees!

Donger
09-20-2008, 04:43 PM
We won't tax them after they are foreclosed on and the seller doesn't pursue the deficiency?

Man that is a sweet deal! It's just like handing them $700 billion directly from the Treasury. Those greedy f****ing foreclosed mortgagees!

Do you not put any blame on the borrowers? None?

***SPRAYER
09-20-2008, 04:44 PM
We won't tax them after they are foreclosed on and the seller doesn't pursue the deficiency?

Man that is a sweet deal! It's just like handing them $700 billion directly from the Treasury. Those greedy f****ing foreclosed mortgagees!

:)

You miss the point entirely in that they were complicit in royally *****ing up the real estate market.

They were speculators taking huge risks. They should be held accountable. If I put a few grand on a football game and lose, should the government make good on that to my bookie? And then i can send the govt a check every month for twenty dollars untill its paid off?

J Diddy
09-20-2008, 04:44 PM
Do you not put any blame on the borrowers? None?

Some, but what do you do?

banyon
09-20-2008, 04:44 PM
Do you not put any blame on the borrowers? None?

Yeah, when I said 5-10%, what I meant was "none".

Donger
09-20-2008, 04:54 PM
Some, but what do you do?

I predict a government-backed (meaning taxpayer) mortgage. The Democrats already want control over your health care, why not your house, too?

J Diddy
09-20-2008, 04:55 PM
I predict a government-backed (meaning taxpayer) mortgage. The Democrats already want control over your health care, why not your house, too?

So in your mind we're moving towards socialism?

Donger
09-20-2008, 04:56 PM
Yeah, when I said 5-10%, what I meant was "none".

Okay, not none. Certainly minimal, yes? Is that victim territory?

Donger
09-20-2008, 04:56 PM
So in your mind we're moving towards socialism?

Moving toward? No, we are racing toward it.

J Diddy
09-20-2008, 04:57 PM
Moving toward? No, we are racing toward it.

So if the government were to take over housing and healthcare do you think the U.S. as a whole would be better or worse for it?

***SPRAYER
09-20-2008, 04:58 PM
So if the government were to take over housing and healthcare do you think the U.S. as a whole would be better or worse for it?


Have you ever heard of the Soviet Union?

J Diddy
09-20-2008, 05:04 PM
Have you ever heard of the Soviet Union?

That's a pretty far leap don't you think?

Nightfyre
09-20-2008, 05:06 PM
That's a pretty far leap don't you think?

Uh, not from socialized housing and healthcare, no.

J Diddy
09-20-2008, 05:09 PM
Uh, not from socialized housing and healthcare, no.


I'm not saying socialized housing, I'm saying Government backed Mortgages.

banyon
09-20-2008, 05:09 PM
:)

You miss the point entirely in that they were complicit in royally *****ing up the real estate market.

You yourself said they were duped and they were pigeons. How hard is it to see that 1) they weren't holding the strings here and 2)foreclosures, monetarily speaking were a far smaller part of this problem than risky borrowing behavior by the investment banks?

They were speculators taking huge risks. They should be held accountable. If I put a few grand on a football game and lose, should the government make good on that to my bookie? And then i can send the govt a check every month for twenty dollars untill its paid off?

They've been getting foreclosed on left and right, how are they not being held "accountable" The investment banks are precisely the ones getting the bailout on their football bet that you seem to be lamenting. It's like the ethnicity and the demographics of the situation have fried your brain and you've got up confused with down.

Nightfyre
09-20-2008, 05:12 PM
I'm not saying socialized housing, I'm saying Government backed Mortgages.

Government-backed = socialized. Its an insurance that creates moral hazard, which is pretty much the definition of modern socialism.

Donger
09-20-2008, 05:17 PM
So if the government were to take over housing and healthcare do you think the U.S. as a whole would be better or worse for it?

Personally? I'm not a socialist. So, I would consider it far worse. I've had the unfortunate experience of seeing socialism first-hand. I don't want to see it here. It does nothing but foster apathy, but at least everything's "free."

J Diddy
09-20-2008, 05:17 PM
Government-backed = socialized. Its an insurance that creates moral hazard, which is pretty much the definition of modern socialism.

If Government backs a loan for a home. You pay off that loan, the home is yours. In communism it is community property.

J Diddy
09-20-2008, 05:18 PM
Personally? I'm not a socialist. So, I would consider it far worse. I've had the unfortunate experience of seeing socialism first-hand. I don't want to see it here. It does nothing but foster apathy, but at least everything's "free."

I agree, but I don't see govt. backed mortgages as a move towards socialism.

***SPRAYER
09-20-2008, 05:24 PM
You yourself said they were duped and they were pigeons.

Con artists take advantage of other peoples greed.


How hard is it to see that 1) they weren't holding the strings here and 2)foreclosures, monetarily speaking were a far smaller part of this problem than risky borrowing behavior by the investment banks?

This mess began to unravel way before Bear Stearns did a nose dive.



They've been getting foreclosed on left and right, how are they not being held "accountable" The investment banks are precisely the ones getting the bailout on their football bet that you seem to be lamenting. It's like the ethnicity and the demographics of the situation have fried your brain and you've got up confused with down

I don't have anything confused. The government created incentives or used laws to "encourage" banks to lend money to unqualified people. The banks then took this shitty debt and converted it into CMO's that could be sold in the securities market for huge capital gains. Not really a Ponzi scheme but close enough, and now the government is going to step in and "fix" what them themselves instigated.

This was always about consolidating more power into the hands of the political elites. You make it sound like AIG made out like a bandit. 80% of the company is now controlled by the federal govt, AND they have to pay back the loans at 11% interest. Of course, the taxpayer who provided the principal won't see a dime of that.

This is like Goodfellas on steroids.

banyon
09-20-2008, 05:30 PM
Con artists take advantage of other peoples greed.

So, your metaphor. When someone is tricked by a con artist, you like to blame both parties in the transaction equally? :spock:


This mess began to unravel way before Bear Stearns did a nose dive

No kidding. Timing has nothing to do with what I said.



I don't have anything confused. The government created incentives or used laws to "encourage" banks to lend money to unqualified people. The banks then took this shitty debt and converted it into CMO's that could be sold in the securities market for huge capital gains. Not really a Ponzi scheme but close enough, and now the government is going to step in and "fix" what them themselves instigated.

Clearly from this description, you don't understand what happened. You may want to read some more sophisticated sources than the Drudge Report on this one.

This was always about consolidating more power into the hands of the political elites. You make it sound like AIG made out like a bandit. 80% of the company is now controlled by the federal govt, AND they have to pay back the loans at 11% interest. Of course, the taxpayer who provided the principal won't see a dime of that.

This is like Goodfellas on steroids.

All of which, of course, does nothing to change the fact that it's the loan holders and not the borrowers who are getting bailed out.

And AIG's other option was to get wiped out, so why cry for them?

***SPRAYER
09-20-2008, 05:33 PM
So, your metaphor. When someone is tricked by a con artist, you like to blame both parties in the transaction equally? :spock:



Damn right. Some slickster tells me about a "get rich quick scheme" I walk away, very fast.


Clearly from this description, you don't understand what happened. You may want to read some more sophisticated sources than the Drudge Report on this one.

Then you describe it oh wise one.


All of which, of course, does nothing to change the fact that it's the loan holders and not the borrowers who are getting bailed out.

BECAUSE THEY ARE IN BED WITH THE POLITICIANS. AIG goes under, many politicians go under with them.

And AIG's other option was to get wiped out, so why cry for them

I'm not sure where you are getting the idea that my pillow is soaking wet over AIG but..

Let's take that hypothetical to it's conclusion. Describe what would happen.

Donger
09-20-2008, 05:35 PM
I agree, but I don't see govt. backed mortgages as a move towards socialism.

As I understand it, the government is taken over these loans. It's not just "backed." It's not like FDIC, as far as I can tell.

J Diddy
09-20-2008, 05:39 PM
As I understand it, the government is taken over these loans. It's not just "backed." It's not like FDIC, as far as I can tell.

I sincerely doubt the Government will take over the mortgage industry. Even if they do it will not be long term.

Donger
09-20-2008, 05:46 PM
I sincerely doubt the Government will take over the mortgage industry. Even if they do it will not be long term.

I didn't say they would take over the industry. But it certainly sounds like they will own a substantial number of mortgages in this country. 50%?

J Diddy
09-20-2008, 05:52 PM
I didn't say they would take over the industry. But it certainly sounds like they will own a substantial number of mortgages in this country. 50%?

And you don't think they will sell them? What do you think happens after the notes are up?

banyon
09-20-2008, 06:11 PM
Damn right. Some slickster tells me about a "get rich quick scheme" I walk away, very fast.

So, everyone is supposed to be equally savvy about con artists and if they're not, then ***** them?


Then you describe it oh wise one.

Well your description started out ok, but it left out the part about the co-mingling of investment banks with mortgage lending and the much lesser reserve ratios which apply and the way that they maxed out the leverage on the bad loans.

BECAUSE THEY ARE IN BED WITH THE POLITICIANS. AIG goes under, many politicians go under with them.

Do you not understand what you've been arguing? You've been saying that we are bailing out the borrowers, not the lenders.

I'm not sure where you are getting the idea that my pillow is soaking wet over AIG but..

Let's take that hypothetical to it's conclusion. Describe what would happen.


I thought you believed in capitalism? You know, the market will separate the wheat from the chaff and all that? Many people would lose out, and the market would correct the rampant egregious borrowing behavior.

***SPRAYER
09-20-2008, 08:34 PM
So, everyone is supposed to be equally savvy about con artists and if they're not, then ***** them?

What do you recommend? There are 300 million people in this country, how many of them are suckers?



Well your description started out ok, but it left out the part about the co-mingling of investment banks with mortgage lending and the much lesser reserve ratios which apply and the way that they maxed out the leverage on the bad loans.

OK, and? A point?


Do you not understand what you've been arguing? You've been saying that we are bailing out the borrowers, not the lenders.

Have I? Or have you been creating your own narrative?


I thought you believed in capitalism? You know, the market will separate the wheat from the chaff and all that? Many people would lose out, and the market would correct the rampant egregious borrowing behavior

I'm all for it, baby. Let the bottom fall out. I have nothing to lose. I've been getting f'cked my whole life. But no, the politicians aint gonna let that happen because then the money train stops for them. And the beat goes on.

banyon
09-20-2008, 08:57 PM
What do you recommend? There are 300 million people in this country, how many of them are suckers?

How about prosecuting the con men as opposed to their victims?


OK, and? A point?

Well you seem to be pretty confused or willfully in denial about the numbers. Mass home foreclosures = multi-billion dollar problem. Mass home foreclosures borrowed on 30-40 times over = trillion+ dollar problem.


Have I? Or have you been creating your own narrative?

Uh, no, this is you right here:

You miss the point entirely in that they were complicit in royally *****ing up the real estate market.

They were speculators taking huge risks. They should be held accountable. If I put a few grand on a football game and lose, should the government make good on that to my bookie? And then i can send the govt a check every month for twenty dollars untill its paid off?

(i.e., they aren't being held accountable)

Housing bubble bursts. The pigeon can't unload the house. The pigeon is in deep shit.

Why should I, or anybody else in this country feel obligated to help this person out?

(i.e., we are helping them out and shouldn't be)

Then you tried to give an example of how we are helping them out until you realized or after I pointed out how little help was actually being provided. It's cool that you've come around on this point, but don't act mystified like you don't understand you had to spin around on this point.

I'm all for it, baby. Let the bottom fall out. I have nothing to lose. I've been getting f'cked my whole life. But no, the politicians aint gonna let that happen because then the money train stops for them. And the beat goes on.

I would stand to gain a great deal since my student loan debt would be wiped out. But I agree to the extent that the moneyed interests are winning the game while rewriting the rules in the middle of it.

***SPRAYER
09-20-2008, 09:08 PM
[I would stand to gain a great deal since my student loan debt would be wiped out. But I agree to the extent that the moneyed interests are winning the game while rewriting the rules in the middle of it.

Me too. I owe 22 grand (I'm sure you owe more). My interest rate is at 4.2% right now. I could carry that to my grave.

Hey, check this out:


<object width="425" height="344"><param name="movie" value="http://www.youtube.com/v/-bLFPjLaXPM&hl=en&fs=1"></param><param name="allowFullScreen" value="true"></param><embed src="http://www.youtube.com/v/-bLFPjLaXPM&hl=en&fs=1" type="application/x-shockwave-flash" allowfullscreen="true" width="425" height="344"></embed></object>

banyon
09-20-2008, 09:14 PM
Me too. I owe 22 grand (I'm sure you owe more). My interest rate is at 4.2% right now. I could carry that to my grave.

I owe more (@ 60k) but at 1.7%. I locked down at the very bottom. :D

Hey, check this out:

Yeah, it's like you can see him handing Obama the filthy money right after the ceremony! Or not.

Hey Check this out:


Do you know what GLB (the act that repealed Glass-Steagall) stands for?

***SPRAYER
09-20-2008, 09:18 PM
I owe more (@ 60k) but at 1.7%. I locked down at the very bottom.

Just carry it forever and keep deducting the interest from your income. :clap:





Do you know what GLB (the act that repealed Glass-Steagall) stands for


I could yahoo it but, indulge me.

:D

banyon
09-20-2008, 09:20 PM
Do you know what GLB (the act that repealed Glass-Steagall) stands for

The Gramm-Leach-Bliley Act. How about that?

***SPRAYER
09-20-2008, 09:38 PM
The Gramm-Leach-Bliley Act. How about that?


Banyon, I'm tired. I'm not going to argue with you or anyone else about our brokedick congress.

We're doomed. OK? It's not a question of if, it's a question of when.

I'm thinking ten years tops.

Get some kicks before the whole shithouse goes up in flames.

Or something like that.

banyon
09-20-2008, 09:47 PM
Banyon, I'm tired. I'm not going to argue with you or anyone else about our brokedick congress.

We're doomed. OK? It's not a question of if, it's a question of when.

I'm thinking ten years tops.

Get some kicks before the whole shithouse goes up in flames.

Or something like that.

I made SHTSPRAYER tired of spraying s***!

I AM THE CHAMPION, MY FRIENDS! I'LL KEEPING ON FIGHTING TIL THE END! I AM THE CHAMPION I AM THE CHAMPION NO TIME FOR LOSERS CAUSE I AM THE CHAMPION OF THE WORLD! http://ncaabbs.com/images/smilies/01-ugaexams.gif

***SPRAYER
09-21-2008, 06:24 AM
I made SHTSPRAYER tired of spraying s***!

I AM THE CHAMPION, MY FRIENDS! I'LL KEEPING ON FIGHTING TIL THE END! I AM THE CHAMPION I AM THE CHAMPION NO TIME FOR LOSERS CAUSE I AM THE CHAMPION OF THE WORLD! http://ncaabbs.com/images/smilies/01-ugaexams.gif


CHIP AWAY
CHIP AWAY AT THE STONE!

Hydrae
09-21-2008, 10:43 AM
$700B bailout = ~$8400 for my family of 4. Lovely.

irishjayhawk
09-21-2008, 10:48 AM
The good thing is that the $700B is nowhere near what the actual cost will end up being.

Even better, just as bankers learned in the 80's after the S&L crisis that the government will bail them out, they've seen it again. They screwed up, got bailed out, then figured out a whole new way to make even more money and screw up even bigger, and DC came right in and bailed them out again.

15-20 years from now the mess we're in today will be nothing compared to the mess that will be made because of this bailout. Every good banker knows he can take unnecessary risk because his friends in Washington DC will bail him out when he takes on water.

Mortgage the future, the American way.

We definitely agree, it seems.

irishjayhawk
09-21-2008, 10:50 AM
How exactly does he propose this when he's CUT taxes?

banyon
09-21-2008, 10:52 AM
How exactly does he propose this when he's CUT taxes?

That's easy, just print more money. It's the new Republican way.

Hydrae
09-21-2008, 11:00 AM
How exactly does he propose this when he's CUT taxes?

Actually, they are just increasing the amount of the over all debt. So we can pay for all this down the road. Oh, and don't forget the interest in the meantime. :)

irishjayhawk
09-21-2008, 11:01 AM
Well, count me in the boat that this needs to fail. As well as any more bail outs.

beer bacon
09-21-2008, 01:22 PM
The modern GOP leadership is all about socialism. They are fine with welfare as long as it is corporate welfare for the people that finance their political careers.

gblowfish
09-21-2008, 01:22 PM
One of the signs of fascism is when the government starts to take over private business within the country. Imagine!

HonestChieffan
09-21-2008, 04:16 PM
And that is less than the credit card debt of the US.

Logical
09-21-2008, 04:40 PM
Banyon, I'm tired. I'm not going to argue with you or anyone else about our brokedick congress.

We're doomed. OK? It's not a question of if, it's a question of when.

I'm thinking ten years tops.

Get some kicks before the whole shithouse goes up in flames.

Or something like that.
Wow, such a logical post I am going to give you rep. (positive rep).

Nightfyre
09-21-2008, 08:33 PM
If Government backs a loan for a home. You pay off that loan, the home is yours. In communism it is community property.

I said socialism, not communism. There is a difference.

BucEyedPea
09-21-2008, 09:03 PM
Moving toward? No, we are racing toward it.

No we've been in it since the 1930's to some degree, with it increasing steadily ever since. What do you call a progressive income tax, SS, Medicare and Medicaid, and public education, especially Fed involvment in it and a central banking monopoly that uses Keyenesian economics ( a self professed socialist) ? It's called Fabian Socialism, creeping socialism. We were already 3/5ths socialized until this event. There's even been talk of nationalizing transportation and oil by some.

patteeu
09-21-2008, 09:10 PM
No we've been in it since the 1930's to some degree, with it increasing steadily ever since. What do you call a progressive income tax, SS, Medicare and Medicaid, and public education, especially Fed involvment in it and a central banking monopoly that uses Keyenesian economics ( a self professed socialist) ? It's called Fabian Socialism, creeping socialism. We were already 3/5ths socialized until this event. There's even been talk of nationalizing transportation and oil by some.

Agree. My wife was telling me tonight that hospitals in the Kansas City area have to get some kind of approval from the state to start something like a heart surgery program and she indicated that the approval wasn't based on a review of competence, but instead a review of whether or not the hospital served an area that needed that service. She thought it might be related to Medicare. If so, it's a great example of the way we're already socialized to our detriment.

tiptap
09-22-2008, 07:20 AM
Agree. My wife was telling me tonight that hospitals in the Kansas City area have to get some kind of approval from the state to start something like a heart surgery program and she indicated that the approval wasn't based on a review of competence, but instead a review of whether or not the hospital served an area that needed that service. She thought it might be related to Medicare. If so, it's a great example of the way we're already socialized to our detriment.

A certificate of need had been the attempt to avoid duplicate services when demand was not warranted. This would help control cost. But it only works if you are stingy in issuance. What we see is that one hospital gets a NMR and then everyone has to have one despite the existing Radiological equipment, already paid for, meets 95% of cases. Same for heart centers or anything else. Everyone is competing in getting more stuff not in providing cost conscious care. And why has the certificate of need not worked, because those put on the boards have come from those more concern about the economics for the hospitals than the insured or patients.

patteeu
09-22-2008, 07:39 AM
A certificate of need had been the attempt to avoid duplicate services when demand was not warranted. This would help control cost. But it only works if you are stingy in issuance. What we see is that one hospital gets a NMR and then everyone has to have one despite the existing Radiological equipment, already paid for, meets 95% of cases. Same for heart centers or anything else. Everyone is competing in getting more stuff not in providing cost conscious care. And why has the certificate of need not worked, because those put on the boards have come from those more concern about the economics for the hospitals than the insured or patients.

Who issues these certificates of need? The medicare folks? Is it any wonder why health care costs are rising so quickly with one of the main sources of revenue being government? It reminds me of the defense industry.

tiptap
09-22-2008, 07:46 AM
No it is a commission or Dept of Health of the State in most states overseen by the Governor. No Federal oversight.

tiptap
09-22-2008, 07:48 AM
Yeah Medicare always wants to pay more out to the hospitals. That is why they are always for expansion of hospitals. That is how Medicare makes money. Come on patteeu

BucEyedPea
09-22-2008, 07:49 AM
A certificate of need had been the attempt to avoid duplicate services when demand was not warranted. This would help control cost. But it only works if you are stingy in issuance. What we see is that one hospital gets a NMR and then everyone has to have one despite the existing Radiological equipment, already paid for, meets 95% of cases. Same for heart centers or anything else. Everyone is competing in getting more stuff not in providing cost conscious care. And why has the certificate of need not worked, because those put on the boards have come from those more concern about the economics for the hospitals than the insured or patients.

Tiptap, this is an example of socialist thinking. Actually it's communistic. ( they both end up in the same place anyway) It is command and control by govt to determine according to need. You don't need the govt to decide if something is a duplicate service based on what a bureaucrat thinks is proper demand. Let them build a duplicate service. It will only create a greater supply. If it's too much supply they have competition and the prices must adjust to keep business. This would benefit health consumers and bring rates down.

BucEyedPea
09-22-2008, 07:53 AM
Very interesting. Judging from BB's this would seem otherwise.

Rasmussen (http://www.rasmussenreports.com/public_content/business/general_business/just_7_favor_fed_bailout_for_financial_firms)


Only seven percent (7%) of voters think the federal government should use taxpayer funds to keep a large financial institution solvent. Sixty-five percent (65%) say let the company file for bankruptcy.

These numbers are generally the same across Republicans, Democrats and unaffiliated voters.

patteeu
09-22-2008, 07:53 AM
Yeah Medicare always wants to pay more out to the hospitals. That is why they are always for expansion of hospitals. That is how Medicare makes money. Come on patteeu

Medical costs, defense hardware costs, and higher education costs all rise quite a bit faster than inflation. One common denominator is the presence of the government as a primary revenue source. I suspect it's more than just coincidence.

I don't know what you're talking about when you say that Medicare makes money.

tiptap
09-22-2008, 07:53 AM
Now the beginning of deregulation of certificate of need in in place in Texas and California. We will get to see how that plays out.

As in all situations good people will provide good oversight and stewardship. When it fails to really focus on the public's interest it will go to excesses.

patteeu
09-22-2008, 07:54 AM
Tiptap, this is an example of socialist thinking. Actually it's communistic. ( they both end up in the same place anyway) It is command and control by govt to determine according to need. You don't need the govt to decide if something is a duplicate service based on what a bureaucrat thinks is proper demand. Let them build a duplicate service. It will only create a greater supply. If it's too much supply they have competition and the prices must adjust to keep business. This would benefit health consumers and bring rates down.

Yep.

tiptap
09-22-2008, 07:55 AM
I don't know what you're talking about when you say that Medicare makes money.

Neither do I. You implied that Medicare had an economic interest in seeing the outlays go up.

BucEyedPea
09-22-2008, 07:57 AM
Now the beginning of deregulation of certificate of need in in place in Texas and California. We will get to see how that plays out.

As in all situations good people will provide good oversight and stewardship. When it fails to really focus on the public's interest it will go to excesses.

That what people said, and some still say about communism or other socialist dictatorships. It doesn't work not because of any lack of good intention but because govt and/or bureaucrats cannot calculate well enough to allocate resources efficiently. Only a market, ( the people really and it's suppliers meeting it's demand in a cost effective manner) can do that. Your claims are not fact based. This is utopian based. Trying to make markets fit a political ideology for a political outcome: get it free, or below cost but results in higher costs. That's what the left means when they say markets don't work. That's unethical and makes the population lazy and unethical too.

patteeu
09-22-2008, 08:00 AM
Now the beginning of deregulation of certificate of need in in place in Texas and California. We will get to see how that plays out.

As in all situations good people will provide good oversight and stewardship. When it fails to really focus on the public's interest it will go to excesses.

No, we won't really get to see how it works out because the whole system is already rife with socialistic influences. It's just like the anti-capitalism arguments that are surfacing in the wake of this financial mess because some blame "deregulation" even though whatever deregulation there was took place in an environment of ongoing heavy regulation. The basis for the anti-capitalist argument isn't there when we're really comparing two different versions of socialism.

tiptap
09-22-2008, 08:00 AM
Tiptap, this is an example of socialist thinking. Actually it's communistic. ( they both end up in the same place anyway) It is command and control by govt to determine according to need. You don't need the govt to decide if something is a duplicate service based on what a bureaucrat thinks is proper demand. Let them build a duplicate service. It will only create a greater supply. If it's too much supply they have competition and the prices must adjust to keep business. This would benefit health consumers and bring rates down.

But that is what we have had for the last 15 years. The certificate of need has just been a rubber stamp. The idea that there has been control is an illusion. My proof is the number of certificates granted over that period of time compared to population as opposed to when they were a product to control duplication. The result is the large increase in medical costs passed on to rising insurance rates.

ROYC75
09-22-2008, 08:00 AM
Very interesting. Judging from BB's this would seem otherwise.

Rasmussen (http://www.rasmussenreports.com/public_content/business/general_business/just_7_favor_fed_bailout_for_financial_firms)


Only seven percent (7%) of voters think the federal government should use taxpayer funds to keep a large financial institution solvent. Sixty-five percent (65%) say let the company file for bankruptcy.

These numbers are generally the same across Republicans, Democrats and unaffiliated voters.


Works for me ........

BucEyedPea
09-22-2008, 08:02 AM
No, we won't really get to see how it works out because the whole system is already rife with socialistic influences.

It's just like the anti-capitalism arguments that are surfacing in the wake of this financial mess because some blame "deregulation" even though whatever deregulation there was took place in an environment of ongoing heavy regulation. The basis for the anti-capitalist argument isn't there when we're really comparing two different versions of socialism.

Exactly. I call it more than de-regulation. I'd call it massive interventionism by stoking demand to engineer political outcomes.

Nothing but LIES!

tiptap
09-22-2008, 08:04 AM
No, we won't really get to see how it works out because the whole system is already rife with socialistic influences. It's just like the anti-capitalism arguments that are surfacing in the wake of this financial mess because some blame "deregulation" even though whatever deregulation there was took place in an environment of ongoing heavy regulation. The basis for the anti-capitalist argument isn't there when we're really comparing two different versions of socialism.

I see you can't have any government rules in order to have your system be valid. I am all for anarchy. There is no degrees in your thought. Convenient, it is religion.

patteeu
09-22-2008, 08:05 AM
Neither do I. You implied that Medicare had an economic interest in seeing the outlays go up.

No, what I was saying was that once you get hospitals addicted to the revenue stream of a giant payer like medicare, they become willing to make business decisions on the basis of what medicare will allow rather than on the self-interest basis a business in a free market would use.

BucEyedPea
09-22-2008, 08:07 AM
But that is what we have had for the last 15 years. The certificate of need has just been a rubber stamp. The idea that there has been control is an illusion. My proof is the number of certificates granted over that period of time compared to population as opposed to when they were a product to control duplication. The result is the large increase in medical costs passed on to rising insurance rates.

It doesn't matter. It's still govt approval being needed in a country that's supposed to be free. Your evaluation as to the increase in medical costs has to do with other factors of govt intervention, socialist based, to make things more affordable but has lead instead to rising costs.

It's the same with higher education. More govt aid keeps demand up allowing those institutions to keep raising tuition instead. Then the whole process feeds on each other in a vicious circle. You gaurantee a market for people this way...and they don't have to compete. It also reduces the quality of education too. That's another area where they can compete.

patteeu
09-22-2008, 08:08 AM
I see you can't have any government rules in order to have your system be valid. I am all for anarchy. There is no degrees in your thought. Convenient, it is religion.

I'm just talking about reality instead of these fake tests of capitalism that you'd like to set up. I'm not a purist when it comes to capitalism or libertarianism, but yes, I'd say that I'm religiously respectful of the general good represented by each of them.

tiptap
09-22-2008, 08:08 AM
It is a poor system that claims to provide merit in only the extreme.

tiptap
09-22-2008, 08:10 AM
It is the argument that has always had me in want to puke on Communism.

tiptap
09-22-2008, 08:12 AM
You all act like the you have endless resources. That is the assumption because the market never makes mistakes huh.

tiptap
09-22-2008, 08:13 AM
I can't understand need ahead of time. There is no planning.

BucEyedPea
09-22-2008, 08:15 AM
originally Posted by tiptap View Post
I see you can't have any government rules in order to have your system be valid. I am all for anarchy. There is no degrees in your thought. Convenient, it is religion.

Now see this flipping to the opposite extreme and incorrectly labeling our arguments as being anarchy is another red herring or false analysis. No one is saying there should be absolutely no rules. There are rational rules to keep markets safe, free from fraud and unethical activities etc.

Then there are irrational rules and excess interventionism in markets for political outcomes such as egalitarianism ( socialis/communism) that cannot calculate resources as efficiently. One is bad the other is good. In order to have a free-market you do have to establish some rules or you get chaos and no freedom. That is not the same thins as what you're recommending. Apples and oranges. To call something the same when it is not the same is a point of illogic. To place a free system with rational modest rules to ensure fair play and freedom into being defined as anarchy is illogical.

Explain to me how health insurance was once more affordable in this country until the govt got involved to make it affordable but produced the opposite effects? No, I don't want to hear the technology costs argument. Technology unregulated for political outcomes, simply becomes more affordable and more accessible over time without the govt engineering for political outcomes. The problem with your pov is that you think healthcare is a right.

patteeu
09-22-2008, 08:16 AM
It is a poor system that claims to provide merit in only the extreme.

Who's making such a claim? We'd have a long way to go to get to extreme capitalism. Moving dramatically in that direction would still leave us with a mixed system. I'm just extremely hesitant to move in the other direction.

Socialism American style has been responsible for some good things (like the major economic advances of the last 70 years and advances in science and medicine) and it has also been responsible for some bad things (like our out of control entitlement programs, huge budget deficits, and, IMO, extraordinary inflation in defense, healthcare, and higher education). I realize that my list of good things and bad things here is arguable and that some will say we could have done better with more capitalism and others saying we could have done better with more socialism, but the important thing is that I think it's been a mixed bag.

tiptap
09-22-2008, 08:20 AM
And as tools, whether science or budget deficits or higher education, it depends on having ELITE people that know the limits of the tools and don't abuse it. This is true of capitalism or socialism. And when we put people who wish to destroy the tools and let them do so in using the tools why should we be surprised at the outcome.

BucEyedPea
09-22-2008, 08:25 AM
Socialism American style has been responsible for some good things (like the major economic advances of the last 70 years and advances in science and medicine)

I wouldn't go that far. I'd like to see what advances in science and medicine would not have also developed had we no socialism American style. The 19th century had an explosion of inventions and advances. That era had little govt involvement. It's the post WWII environment where we got the amount of govt involved. That's not to say they would have never happened because the incentives were there regardless. You ought to read about this over at Mises or FEE on how much was still being done privately and simultaneously during the post WWII era in science. They give specific examples too. You'd be surprised at the record, including some who were developing the internet.

Nope these developments were coming and would have happened anyway.
A scientist is just a scientist. The scientists still needs the entrepreneur, businessman in a capitalist system to put his discoveries into the hands of the people. The people are the market and the market is democratic. For without needs and problems being solved of the people you have no market. It can be done without govt research and had in the past.

patteeu
09-22-2008, 08:26 AM
And as tools, whether science or budget deficits or higher education, it depends on having ELITE people that know the limits of the tools and don't abuse it. This is true of capitalism or socialism. And when we put people who wish to destroy the tools and let them do so in using the tools why should we be surprised at the outcome.

I'm with you on the importance of the people who are working with the "tools", but at some point, the tools may be too complex and inscrutable for the best of people to manage.

But I'm not with you on your argument that capitalists are worse candidates for office than socialists just because the capitalists haven't bought into the idea that we need ever greater socialism creep. I don't think GWBush, for example, was ever intent on destroying the tools. He seemed to be very comfortable expanding American socialism in more ways than one. Even his SS private accounts idea was a very minor adjustment to the socialism of SS.

patteeu
09-22-2008, 08:33 AM
I wouldn't go that far. I'd like to see what advances in science and medicine would not have also developed had we no socialism American style. The 19th century had an explosion of inventions and advances. That era had little govt involvement. It's the post WWII environment where we got the amount of govt involved. That's not to say they would have never happened because the incentives were there regardless. You ought to read about this over at Mises or FEE on how much was still being done privately and simultaneously during the post WWII era in science. They give specific examples too. You'd be surprised at the record, including some who were developing the internet.

Nopem these developments were coming and would have happened anyway.
A scientist is just a scientist. The scientists still needs the entrepreneur, businessman in a capitalist system to put his discoveries into the hands of the people. It can be done without govt research and had in the past.

I figured you wouldn't agree. tip tap probably doesn't agree with my negatives either. That's why I said my lists were arguable. Surely there is some big science advancement that you would admit was helped by US socialism. Maybe the mapping of human DNA? But beyond that we have the whole patent system that grants monopolies to inventors. That's not full blown central planning, but it's not pure capitalism either.

BucEyedPea
09-22-2008, 08:35 AM
And as tools, whether science or budget deficits or higher education, it depends on having ELITE people that know the limits of the tools and don't abuse it. This is true of capitalism or socialism. And when we put people who wish to destroy the tools and let them do so in using the tools why should we be surprised at the outcome.

This is philosophically the root thinking of collectivist ideologies...that one needs an ELITE people to decide such things. That's the Philosopher King idea. That comes from Platos' Republic which the Soviet system was based on. This is what the Neo Conservatives also believe which I why I call them liberal hawks. It's elitism. Like the Soviet system. Let me tell you bureaucrats are not elite by any stretch.

But you can't say this is capitalism unless you mean cartel capitalism, which is what we have. Aka corporatism. It's just the fascist model for the public good. Let's face it it was Marx that coined the term "capitalism" and never defined it.

The market, aka the people, will largely regulate the market. It cannot regulate unethical activity as well. Well it can but it may be too late. Even with rules they can still be burned and have it too late.

Those enterprises that do the best job of serving the people by delivering what is needed and wanted by the people at a price most can afford and meeting their level of quality will be the most successful in free-market capitialism. We've not had it because Republicans have been mercantilists which leads those on the left to associate free-markets with it when it isn't. Both are authoritarian models.

Your model favors those who get politically connected to govt....commissars and apparatchiks of the state's party. That leads to less efficiency and poorer quality. End of story.

BucEyedPea
09-22-2008, 08:44 AM
I figured you wouldn't agree. tip tap probably doesn't agree with my negatives either. That's why I said my lists were arguable. Surely there is some big science advancement that you would admit was helped by US socialism. Maybe the mapping of human DNA? But beyond that we have the whole patent system that grants monopolies to inventors. That's not full blown central planning, but it's not pure capitalism either.

The Human Genome project was milked over time so those scientist could keep their jobs. If you can find it here in this BB, I made a series of detailed posts when I first arrived Spring '06 on how inefficient that became. IIRC it required some private enterprise to get involved. ( see if I can find it before have to go.)

Granting patents is part of pure capitalism as it protects intellectual property.
I understand pure libertarians, who are really anarchists or min-anarchists, diss intellectual property but I am not in that camp.

Even the Manhattan Project was originated by two scientists privately who wrote a letter to FDR who didn't respond except due to their persistence. And DuPont built it. It's an exaggerated story. Besides that was a time of war, which is legit as it's defense related. Even in the 19th century this stuff was limited to defense. But post WWII it also led to the persistent belief that w/o govt we can't have scientific discovery or research. BS! Most govt R&D is aimed at destructive purposes though. Whereas the market uses it for peaceful purposes and for the betterment of mankind.

BucEyedPea
09-22-2008, 08:55 AM
Here's the link to those past debates on govt funded science, including the claim the govt developed the internet, and what happened on the Human Genome Project. Plus another one.


http://www.chiefsplanet.com/BB/showthread.php?t=139389&page=6&pp=15&highlight=Genome+Project


http://www.chiefsplanet.com/BB/showthread.php?p=3458879&highlight=Genome#post3458879

Even Goddard was developing rocket technology on his own time. Then the govt contacted him and used his technology. These things are not done as cost effectively as private sector who is risking it's own money. Govt does them less efficiently frequently involving massive cost overruns, as there is no market to punish them

Those who don't like markets don't like them because they punish the right people.

tiptap
09-22-2008, 09:15 AM
This is philosophically the root thinking of collectivist ideologies...that one needs an ELITE people to decide such things. That's the Philosopher King idea. That comes from Platos' Republic which the Soviet system was based on. This is what the Neo Conservatives also believe which I why I call them liberal hawks. It's elitism. Like the Soviet system. Let me tell you bureaucrats are not elite by any stretch.

But you can't say this is capitalism unless you mean cartel capitalism, which is what we have. Aka corporatism. It's just the fascist model for the public good. Let's face it it was Marx that coined the term "capitalism" and never defined it.

The market, aka the people, will largely regulate the market. It cannot regulate unethical activity as well. Well it can but it may be too late. Even with rules they can still be burned and have it too late.

Those enterprises that do the best job of serving the people by delivering what is needed and wanted by the people at a price most can afford and meeting their level of quality will be the most successful in free-market capitialism. We've not had it because Republicans have been mercantilists which leads those on the left to associate free-markets with it when it isn't. Both are authoritarian models.

Your model favors those who get politically connected to govt....commissars and apparatchiks of the state's party. That leads to less efficiency and poorer quality. End of story.

And now it is your turn to be holding me to the extreme. I HATE PLATONIC PHILOSOPHER KING. I DO LOVE THE PHILOSOPHER PRESIDENT. The difference is one is accountable to a democratic vote. There is a recognition that you want the SMARTER person at the controls. I certainly would like to have an ELITE QB for my football team. WHY would I want less at the head of my government? And the question is if the merits of a free system can be shown in small measure. (and I can make those arguments in favor of capitalistic domains.) How is it that systems get so inexplicable that the elite can't use them and yet the notion the market is all knowing oracle somehow can resolve the question. If I am the biggest player in the market, bigger than the buyer, than how is that different?

BucEyedPea
09-22-2008, 09:36 AM
And now it is your turn to be holding me to the extreme. I HATE PLATONIC PHILOSOPHER KING. I DO LOVE THE PHILOSOPHER PRESIDENT. The difference is one is accountable to a democratic vote. There is a recognition that you want the SMARTER person at the controls. I certainly would like to have an ELITE QB for my football team. WHY would I want less at the head of my government? And the question is if the merits of a free system can be shown in small measure. (and I can make those arguments in favor of capitalistic domains.) How is it that systems get so inexplicable that the elite can't use them and yet the notion the market is all knowing oracle somehow can resolve the question. If I am the biggest player in the market, bigger than the buyer, than how is that different?

The SMARTER person at the controls are the people in the market doing their own individual valuing based on their needs. That is a subjective and individualized process. No single person in govt can do that as there is too much variety among the people to know what the best choice is for each. That is democracy in action. Not Marx's " Democracy is the road to socialism" idea.

Someone becomes the biggest player in a free-market ( not a mercantilist market which is done via govt protection) by doing the best job meeting the demands of the consumer ( the people) at a price most can afford.

The people vote with their dollars and feet. Not so with a govt solution. It's a one size fits all. That's not a free-market.

I was always taught up at the Foundation for Economic Education that if anyone could come up with a breakthrough to solve a current problem they'd become rich. Also if one can come up with a product or service that people really need and want, or just really like because it's fun and do it affordably they can reach a bigger market and become wealthy. One dominating the market is not a real monopoly as there is always the threat of someone else entering the market which is more likely if prices get too high. Then someone can enter that same market by charging less. So the threat of competition brings the price back down. Look what's happening to StarBucks. It's not just the bad economy, there's been a host of copy cat outfits driving their price back down.

The monopoly claim, is a false argument. Monopolies are creatures of govt. True monopolies are created by law and are "coercive" monopolies in exchange for govt regs in price fixing. So there isn't really a market there as the people have no choice and must use that. This has usually been done with utilities.

tiptap
09-22-2008, 09:52 AM
The SMARTER person at the controls are the people in the market doing their own individual valuing based on their needs. That is a subjective and individualized process. No single person in govt can do that as there is too much variety among the people to know what the best choice is for each. That is democracy in action. Not Marx's " Democracy is the road to socialism" idea.

Someone becomes the biggest player in a free-market ( not a mercantilist market which is done via govt protection) by doing the best job meeting the demands of the consumer ( the people) at a price most can afford.

The people vote with their dollars and feet. Not so with a govt solution. It's a one size fits all. That's not a free-market.

I was always taught up at the Foundation for Economic Education that if anyone could come up with a breakthrough to solve a current problem they'd become rich. Also if one can come up with a product or service that people really need and want, or just really like because it's fun and do it affordably they can reach a bigger market and become wealthy. One dominating the market is not a real monopoly as there is always the threat of someone else entering the market which is more likely if prices get too high. Then someone can enter that same market by charging less. So the threat of competition brings the price back down. Look what's happening to StarBucks. It's not just the bad economy, there's been a host of copy cat outfits driving their price back down.

The monopoly claim, is a false argument. Monopolies are creatures of govt. True monopolies are created by law and are "coercive" monopolies in exchange for govt regs in price fixing. So there isn't really a market there as the people have no choice and must use that. This has usually been done with utilities.

Again where is this magical moment when your capitalistic system worked. How long did it last before the reality of monopoly arose. Yes I am willing to use your arguments as a yardstick but not the shovel. It is too abstract and applied after the fact to give guidance going forward. It is always a day late and a dollar short.

***SPRAYER
09-22-2008, 09:52 AM
So what will the SEC do now that Wall St is kaput?

http://sec.gov/

BucEyedPea
09-22-2008, 10:04 AM
Again where is this magical moment when your capitalistic system worked. How long did it last before the reality of monopoly arose. Yes I am willing to use your arguments as a yardstick but not the shovel. It is too abstract and applied after the fact to give guidance going forward. It is always a day late and a dollar short.
1) I never said there was a "magical moment." Your words not mine. You're trying to color it as utopian.
There would be corrections, some businesses will still fail—the right ones. ( most fail anyhow even today). I simply showed how it was better than a command and control by elites who lack adequate information to make the decisions for millions of people.
2) Which brand of capitalism are you talking about?
The closest we came to a free-market was during the early days of the Republic and again during the Gilded Age.

It is not abstract though. Your's is the abstract argument, since it's based on the incoherent rumblings of Karl Marx, a man who was a professor in an ivory tower, who had to be supported by his buddy Engle's industrialist family to live. Even then some of his children died of malnutrition and he sold out his own fellow revolutionaries for a buck. Your ideas are from the same intellectuals of the same mold today...who never ran a business or had to survive in a real market living on govt dole. My argument is based on what has actually happened and how real people operate since it's based on praxeology aka "Human Action"—also the name of Von Mises' major treatise on economics. It's not an Ivory Tower mathematical model and/or positivism which is coming to a head to day with a financial crisis. This school of thought predicted this mess.

http://en.wikipedia.org/wiki/Praxeology

http://en.wikipedia.org/wiki/Ludwig_von_Mises

BucEyedPea
09-22-2008, 10:08 AM
So what will the SEC do now that Wall St is kaput?

http://sec.gov/


Emergency Legislation- Article VIII:

"Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency."

Paulson to US: We will bury you!" (http://www.lewrockwell.com/blog/lewrw/archives/022994.html)

Blatantly unConstitutional. The Democratic congres has abdicated it's Constitutional duty to deal with this. There've been bailouts before done under Congress.

Meanwhile China calls for a world currency.

http://www.reuters.com/article/idUSPEK2402720080917

tiptap
09-22-2008, 10:10 AM
I want you to know, I have spent many hours, I will not invest more at this time, reading about the Austrian school of economics including Mises. I stand by my assessments for now. That is my economic vote in this political cycle.

And while I accept the agrarian early Republic example as interesting, I reject that your arguments match up well in the Gilded Age. But we will have to leave that for after the election.

BucEyedPea
09-22-2008, 10:15 AM
I want you to know, I have spent many hours, I will not invest more at this time, reading about the Austrian school of economics including Mises. I stand by my assessments for now. That is my economic vote in this political cycle.

And while I accept the agrarian early Republic example as interesting, I reject that your arguments match up well in the Gilded Age. But we will have to leave that for after the election.
I got you on what you've done. Just would like to add:

The Gilded Age had a lot of mercantilism too. I am not saying it's my model just closer compared to what we have today. But that is when we outstripped Europe in economic growth, had a gold standard and even a high protectionist tariff then but no central bank and not much economic interventionism in markets for egalitarian purposes and outcomes like the self-proclaimed socialists/progressives of the Keynesian/John Kenneth Galbraith era.

RINGLEADER
09-22-2008, 10:43 AM
Here's an interesting article about the bail-out (which, if paid back over the time period this author believes, is closer to $2.5 trillion). Basically boils down to a plan that picks the lesser of two evils (one costing $2.5 trillion, the other costing upwards of $30 trillion). Sure the situation is terrible, but you don't always get to choose between a good choice and a bad choice.

http://www.usnews.com/blogs/capital-commerce/2008/9/22/bailout-prevents-great-depression-20.html

What would be the dollar cost of not bailing out Wall Street? Try a number north of $30 trillion. (The awful math is detailed below.) That's why Hank Paulson and Ben Bernanke were so scared last week. And, yes, I think "scared" isn't too strong a word. You don't think they convened an emergency nighttime meeting of congressional leaders and then walked out with something close to a blank check for a trillion bucks because they thought we were headed for an outright recession, even a fairly nasty one?

Nope, I think they believed, and got Congress to believe, that the economy was on the verge of something far worse than the worst downturn in a generation. And that is why they went with the so-called nuclear option: the biggest financial bailout in history. In the words of JPMorgan Chase economist James Glassman, "Thankfully, we and our friends around the world who are watching the economic lights come on will never know where events would have led, if the clock had not stopped [last] Thursday afternoon.... Last week's events made the 1987 stock market crash look like child's play."

As plumbers say about pricey repairs, "Sure, it costs money. It costs money because it saves you money." And plumber in chief Paulson had a pretty big pipe, loaded with toxic debt, to unclog.

OK, let's run the numbers. Paulson is asking for $700 billion. But that massive amount doesn't include previous government actions to cure the credit crisis (like propping up Fannie Mae and Freddie Mac), nor does it take into account money the government may get back from selling the bad assets it will be purchasing. So let's say those situations cancel each other out, and we are really talking about $700 billion. Now that money is being borrowed. So you take $700 billion borrowed for 30 years at prevailing interest rates, and you are talking about $2.5 trillion. But as Paulson said last week, "I am convinced that this bold approach will cost American families far less than the alternative: a continuing series of financial institution failures and frozen credit markets unable to fund economic expansion."

Now let's do the math on the "alternatives." What would doing nothing cost?

1) Scenario 1: Great Depression "Lite." This is supposed to be the worst financial crisis since the 1930s. So let's assume that the total freezing up of American and global credit markets caused something half as bad as the Great Depression. From 1930 through 1933, the U.S. economy shrank by about 25 percent. Now let's say that by doing nothing and letting Mr. Market do his worst, the $12 trillion U.S. economy shrinks by half that amount (12.5 percent), or around $1.5 trillion over four years. (Also, figure a near doubling in unemployment.) But there's also the opportunity cost of not returning to growth, even at a so-so 2.0 percent a year. Doing nothing costs $1.1 trillion more in lost growth. So now we are down $2.6 trillion.

But wait: There's more. Let's assume the stock market drops an additional 25 percent or so. That's $3 trillion more in lost market capitalization. Plus, we are forgoing the opportunity to gain back what we have lost in the market, about $3 trillion. So, add the $6 million in lost market capitalization to the lost economic output, and we are at $8.6 trillion.

Then there is housing, already down $5 trillion, or roughly 20 percent. Let's conservatively say that we lose another $5 trillion by doing nothing. Plus, we forgo a partial rebound, say, $2.5 trillion. Adding together further housing losses (plus the lost opportunity to recoup some losses), and we are talking about a total cost of doing nothing of $15 trillion in four years for the whole megillah. But it could be worse.

2) Scenario 2: Great Depression 2.0. The economy shrinks by 25 percent over four years, or $3.2 trillion, plus $1.1 trillion in lost opportunity growth. Economic cost: $4.3 trillion. The market falls two thirds from its peak, losing $7 trillion in value from its current level, plus $3 trillion from not getting a rebound. Stock market cost: $10 trillion. Housing falls an additional $10 trillion from current levels, plus the lost opportunity of $2.5 trillion from a rebound. Housing cost: $12.5 trillion. Total four-year financial and economic cost of doing nothing: $26.8 trillion.

Now this is all a very rough guesstimate and doesn't include the costs of all sorts of other ramifications. Here is a fun one: the dissolution of China. Its economy is built for hypergrowth. A dramatically rising standard of living is both keeping the Communist Party in power and keeping the country together. Neither might survive a global economic meltdown. What is the economic impact of that? I don't know. My guesstimator just blew up.

Bottom line: Lots of folks have problems with the bailout. Liberals don't like a government bailout of Wall Street (instead of more homeowner help). Conservatives don't like a government bailout of Wall Street (vs. letting the market have its way). In a commentary on the National Review website, Newt Gingrich shows great skepticism toward the Mother of All Bailouts, advising that Congress "had better ask a lot of questions before it shifts this much burden to the taxpayer and shifts this much power to a Washington bureaucracy." He also presents several other actions government could take: 1) suspend the mark-to-market accounting rule; 2) repeal the Sarbanes-Oxley law; 3) eliminate the capital-gains tax; 4) undertake an "all of the above" energy plan to keep at home $500 billion of the $700 billion we currently send overseas for imported energy.

Count me as "all of the above" for Gingrich's ideas. (Toss in a corporate tax cut while you're at it.) But what would have been a smart, free-market plan in August 2007 or March of this year isn't enough for right now. Just as government created the environment for the credit crisis, it failed to enact quick solutions. The situation has gone critical. It's time for shock and awe.

oldandslow
09-22-2008, 11:01 AM
So, in a moment of crisis, socialism is the right answer...I will remember that.

tiptap
09-22-2008, 11:45 AM
Oh RL, if it ain't the Terrorist under every rock (that was your line last election cycle) it is a false scenario of monetary loss to drive action toward removing the last of oversight and restrictions. Because the people in Wall Street get that benefit and they have done so well for the country in general. They need more, more another surge of financial products with the mark to market rule gone.

patteeu
09-22-2008, 04:51 PM
So, in a moment of crisis, socialism is the right answer...I will remember that.

Whatever the answer is here, it's not necessarily going to be the best answer in every crisis.

Sometimes central planning and/or socialism of one form or another makes sense. For example, if the situation is a prisoner's dilemma (http://en.wikipedia.org/wiki/Prisoner%27s_dilemma), there could be a benefit to a temporary central authority that can manage the group through the crisis in a way that is beneficial to everyone whereas leaving everyone to manage the crisis themselves might lead to individual action that exacerbates the problem for all.

It may well be that the proposed solution to the financial mess is the best among bad options, but it also may be that a better but politically non-viable solution was available at some point in the past. As an example, I'd point to President Bush's attempt to start a discussion about SS reform involving private accounts. No one perceived a crisis at the time and that proposal went nowhere. By the time people actually perceive a SS (or medicare for that matter) crisis in the way the current financial crisis is being perceived, it will be too late for such measured reforms.

Bootlegged
09-22-2008, 04:54 PM
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clemensol
09-22-2008, 06:22 PM
I have a question which I can't find the answer to anywhere:

Will the government get any significant amount of money back from the mortgages they buy?

Hydrae
09-22-2008, 06:35 PM
Here's an interesting article about the bail-out (which, if paid back over the time period this author believes, is closer to $2.5 trillion). Basically boils down to a plan that picks the lesser of two evils (one costing $2.5 trillion, the other costing upwards of $30 trillion). Sure the situation is terrible, but you don't always get to choose between a good choice and a bad choice.

http://www.usnews.com/blogs/capital-commerce/2008/9/22/bailout-prevents-great-depression-20.html



I couldn't make it through the whole thing. When he starts spinning out his scenarios and every other sentence starts with "let's assume" this happens or that happens I lost interest very quickly. I am sure there are ways and probably articles out there that explain this stuff for laymen such as myself. This article though just seems to be grabbing numbers out of the air and then speculating on the result.

BTW, if this bailout works and "only" costs us $2.5T, how much will the next occurance cost? The overall system is broken and these bandaids they are wanting to apply will not solve the base problem.

banyon
09-22-2008, 08:09 PM
Oh RL, if it ain't the Terrorist under every rock (that was your line last election cycle) it is a false scenario of monetary loss to drive action toward removing the last of oversight and restrictions. Because the people in Wall Street get that benefit and they have done so well for the country in general. They need more, more another surge of financial products with the mark to market rule gone.

Also there are all of these monetary loss scenarios, but who exactly is losing the money?

RJ
09-22-2008, 09:28 PM
I heard Sarah Palin shot a moose.

Logical
09-22-2008, 09:35 PM
Also there are all of these monetary loss scenarios, but who exactly is losing the money?
I believe the correct answer is the US economy, don't underestimate the negative effects.

RJ
09-22-2008, 10:02 PM
I believe the correct answer is the US economy, don't underestimate the negative effects.



Yes, I believe that is the case.

I heard today that 21% of our GDP comes from the financial sector, versus only 12% from manufacturing. So I suppose that, in a sense, we would all be losing the money.

It's just a lot harder to get behind a bailout for people who push money around than it would be for people who actually make things.

patteeu
09-23-2008, 05:36 AM
I have a question which I can't find the answer to anywhere:

Will the government get any significant amount of money back from the mortgages they buy?

My understanding is that no one really knows. It's possible, but as with any positive development in terms of government finances, I'm skeptical.

patteeu
09-23-2008, 05:43 AM
Also there are all of these monetary loss scenarios, but who exactly is losing the money?

I believe the correct answer is the US economy, don't underestimate the negative effects.

Yes, I believe that is the case.

I heard today that 21% of our GDP comes from the financial sector, versus only 12% from manufacturing. So I suppose that, in a sense, we would all be losing the money.

It's just a lot harder to get behind a bailout for people who push money around than it would be for people who actually make things.

My guess is that the first in line to lose, after the management and employees of defunct and reformed financial institutions, of course, is the investor class. These are disproportionately the people that Barack Obama thinks can afford to buck up for more taxes anyway so what's the big deal? We'll get to see what kind of trickle down impact hitting these folks in the pocket book actually has on such middle class concerns as employment, salaries, and acquisition of consumer/mortgage credit. It should be a good test of the democrat economic theory that soaking the rich doesn't have a significant trickle down impact.

tiptap
09-23-2008, 05:57 AM
I have a question which I can't find the answer to anywhere:

Will the government get any significant amount of money back from the mortgages they buy?

My understanding is that no one really knows. It's possible, but as with any positive development in terms of government finances, I'm skeptical.

The Saving and Loan bailout had a pretty neutral outlay over time. The difference here is not the direct mortgage debt. The houses are still there as collateral. It is the Derivatives created to tap this new money. That is the Radioactive Financial tool that no one is bidding on. It has no market. It has no value and is just made up numbers on the books. And we could afford to let it die all on its own except some of this Radioactive STock is on line to back up the 5 trillion MONEY MARKET FUNDS. And that is where the line has been drawn. Everything has been done in an attempt to avoid that.

Derivatives easily have in the past cost people money over the initial investment. They have been known to provide not just a negative return but negative return plus all the principle.