$700 Billion - To Bail or Not to Bail...That is the question - U2 Feedback

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Old 09-24-2008, 08:26 PM   #1
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$700 Billion - To Bail or Not to Bail...That is the question

$700 billion.

That is how much the government would have to pay to bail out these large, international companies.

If the government does not bail out these companies, then our economy is in serious critical condition - and internationally is in danger of collapsing. And being that we are currently in a recession, by not bailing out the companies, it could just be the door that would lead us straight into another depression.

If the government does bail out the companies, then the argument becomes where does the money come from. Do taxes get raised, meaning, we the people have to bail the mis-managed companies?

I think there are two alternate solutions, which hopefully that are what the Senators are meeting to discuss. They've made the decision, I would think, that they have to bail out these companies. As I said, if they don't, internationally we would be facing a serious economic crisis, and it could in fact potentially lead us right into a depression.

Let's pretend for a moment that they haven't decided yet whether to bail out the companies. So they debate and debate for days on end and finally vote. And Senate decides, no, we will let the companies suffer. They made the mistake, they will suffer, and unfortunately, the internationally economy will collapse, which in turn would send us right into a depression. Sounds bad doesn't it? But maybe not. With how bad our economy is right now, maybe a depression is the real cure we need. This country is hurting, that in order for the economy to get good again we need to reboot and restart to get on the right track. In one word: Depression. That is one option.

Another option is that congress has decided to bail out the companies. Now comes the decision where to raise this $700 billion. One option is the American people. Well, I for one am not going to bail out some multi-million dollar company that made bad financial decisions. It's not our problem, and it shouldn't be our problem. So where to get this money? My idea is that the government would lend the money to the companies, and the companies would then have to pay the government back with interest. That interest would go to help pay some of our, potentially, 11 point something trillion dollar debt. The government would also put in a stipulation that, since we're bailing you out, owners and VIP's in your companies cannot get raises, bonuses, or anything else of that nature. And when they retire, they don't get million dollar payouts and paychecks for the rest of their lives. They instead get a normal retirement and pension plan just like every other American in this country.

Two different approaches to this $700 billion bail out. I'm not sure which I personally like better. But they both sound good to me.

Which would you prefer?
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Old 09-24-2008, 08:29 PM   #2
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Well if you read the proposal it's pretty clear where the money is coming from.

Long term, from the taxpayers.

Short term, the basics are that the Feds are going to make payments to the companies, which will then use that money to pay off their debtors, who will then use that money to buy treasuries which the Feds will then use to pay off the loan. In theory. So you're not really "coming up" with money so much as moving money 'round in the short term.
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Old 09-24-2008, 08:33 PM   #3
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That sounds like the same thing as having multiple credit cards. You max out all but one, then use that to transfer the balance of one card. And use that to transfer etc etc.

Or am I not seeing it right?
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Old 09-24-2008, 08:44 PM   #4
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Paul Krugman put it best when he said it is like paying off your house with an IOU from your neighbour.

What we are talking about here is imaginary money.
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Old 09-24-2008, 08:46 PM   #5
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Well that's ridiculous. I don't like their decision on how to solve this. I think in the long run it will just cause more economic problems.
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Old 09-24-2008, 08:55 PM   #6
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Well that's ridiculous. I don't like their decision on how to solve this. I think in the long run it will just cause more economic problems.
And McCain insists that this must be solved tomorrow.

Because heaven forbid that people sit down and think about this a little more carefully before running head first into another disaster (see: Iraq).
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Old 09-24-2008, 09:26 PM   #7
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My idea is that the government would lend the money to the companies, and the companies would then have to pay the government back with interest. That interest would go to help pay some of our, potentially, 11 point something trillion dollar debt.
You realize they are already doing this, right? In addition, hundreds of billions of the Federal Reserve's assets has been lent out to the banks, for which they are using toxic assets as collateral.
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Old 09-24-2008, 09:28 PM   #8
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You realize they are already doing this, right? In addition, hundreds of billions of the Federal Reserve's assets has been lent out to the banks, for which they are using toxic assets as collateral.
Yeah the same toxic paper that they can't get rid of in the first place.
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Old 09-24-2008, 09:29 PM   #9
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You realize they are already doing this, right? In addition, hundreds of billions of the Federal Reserve's assets has been lent out to the banks, for which they are using toxic assets as collateral.

No, I didn't know this. And what do mean by toxic assets?
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Old 09-24-2008, 09:30 PM   #10
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Worthless credits.
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Old 09-24-2008, 09:33 PM   #11
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Worthless credits.
Toxic assets is worthless credits? Like what anitram was saying earlier about how the bill to pay off this 700 billion would be handled?
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Old 09-24-2008, 09:34 PM   #12
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I don't think it's the loan or bail out, if you will that bothers most people - that are paying attention, as long as they pull out the part of it that states:

Quote:
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.
Dirty Secret Of The Bailout: Thirty-Two Words That None Dare Utter

I don't want this monster going through without the proper oversight and bipartisan review going along with it.
No more blank checks for this administration or Wall Street. They can't handle their money as it is, and I can't afford to bail out ANYONE, thank you very much.
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Old 09-24-2008, 09:36 PM   #13
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And McCain insists that this must be solved tomorrow.

Because heaven forbid that people sit down and think about this a little more carefully before running head first into another disaster (see: Iraq).
I agree. It's plain irresponsible. Cowboy Maverick McCain is attempting to be the economic white knight thinking he's going to fool people into thinking he's putting "country first". But if this plan fails in six months , which it easily could, and thousands more Americans have lost their homes as more banking and insurance institutions collapse, his Pollyanna optimism is going to look pretty foolish. This is ludicrous. For the past 8 years, we've had a president in the White House who makes uninformed decisions based on ideology and partisan loyalty, a president not interested in taking a nuanced view of the complexity of the issues, a president who doesn't have the desire to sit down and calmly make rational decisions based on what's best for the common good. We've all seen where that's gotten us. We're in the worst economic crisis since the Depression, we're in a war without end that was began on misinformation and zero foresight, and nearly every other issue the Bush administration has attempted to work on has failed miserably. Yet, we could easily vote to go back for more under McCain? When it comes to our government, the American people are masochists.
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Old 09-24-2008, 09:37 PM   #14
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Toxic paper is bad assets that can't be disposed of because there is no market for them.
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Old 09-24-2008, 09:38 PM   #15
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No, I didn't know this. And what do mean by toxic assets?
Collateralized debt obligation - Wikipedia, the free encyclopedia
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