heywood on 26/9/2008 at 13:08
Ko0K, the majority of Democrats voted with the Republicans for the Iraq war authorization. That's why I said "Congress". As of this moment, it's the Democrats that are siding with Bush and trying to get the bailout plan through this week. If the Republicans end up backing the bailout plan, then I'll change my wording. Until then, I'll stick with what I said because it accurately describes the situation.
Besides, I was really just trying to bait you into talking about the issues for a change. So, are you in favor of the bailout plan or not?
Personally, I'm fuming about it and have written all 3 of my Congressmen twice. It's the mother of all corporate welfare programs, another executive power grab, and will add up to a trillion to the federal debt, all based on the chicken little talk of Paulson and Bernanke with no consideration of alternatives (yet).
Thief13x on 26/9/2008 at 22:34
Call me stupid...but the guy on the local tv news made a good point. Take the $700 billion, and give it to the American people....seriously! each person would get upwards of a million dollars
sounds crazy but seriously, why not? if we're going to go around shelling out hundreds of billions to the banks so they can take the hit on people defaulting, cut to the cause and keep people form defaulting in the first place
Ko0K on 26/9/2008 at 22:44
Quote Posted by heywood
Personally, I'm fuming about it and have written all 3 of my Congressmen twice.
Well, congratulations. Enjoy the cheap letterheads the generic replies from them were printed on; all six copies of them. When I learned that my congressman wasn't planning on running for another term this year, I told the fascist pig to "Buck off" ("Buck" is his nick name). What's the whole point of you telling me that you wrote them letters they'll never get around to reading?
Quote Posted by heywood
If the Republicans end up backing the bailout plan, then I'll change my wording. Until then, I'll stick with what I said because it accurately describes the situation.
The Republicans will fold, and whether you change your wording or not will be of no significance. I have real trouble buying your rationale for 'sticking with what you said,' but at this point I don't even care. But trust me; you are not an "independent." You just can't see your own bias. Then again, almost none of us can, although some of us are at least aware as such.
As for whether I support the bailout or not, I can turn the question around and ask you this. Are you in favor of doing nothing and letting these banks fail, so that we can cross our fingers and hope that the economy is resilient enough to survive the fallout and bounce in a dozen years from now? Supposedly you're foaming at the mouth about it, yet you don't even seem know what consequences the alternative will bring. Of course there are also other alternatives to a massive failure, but they all involve somebody to foot the bill. So, who's going to buy these debts? Private investors? Foreign states?
To give you a straight answer, I am not so much in favor of the bailout, but rather against the dismal alternative. I'd much rather that we didn't get knee-deep in this shithole in the first place, but it's already too late for that, innit?
Turtle on 26/9/2008 at 23:05
Quote Posted by Thief13x
Call me stupid...but the guy on the local tv news made a good point. Take the $700 billion, and
give it to the American people....seriously! each person would get upwards of a million dollars
sounds crazy but seriously, why not? if we're going to go around shelling out hundreds of billions to the banks so they can take the hit on people defaulting, cut to the cause and keep people form defaulting in the first place
I think your math needs a bit of work.
I'm pretty sure it comes out to around $2300 per person.
Pyrian on 26/9/2008 at 23:16
Quote Posted by LittleFlower
Things looking bad for your economy.
But looking good for the Democrats !
Those facts are connected. The Democrats' numbers are up precisely because the electorate believes they're better for the economy - or perhaps merely less disastrous.
Quote Posted by Thief13x
Call me stupid...but the guy on the local tv news made a good point. Take the $700 billion, and
give it to the American people....seriously! each person would get upwards of a million dollars
Er, $2,000 or so. Unless, of course, by the "American People" you meant just 7,000 lucky ones.
Quote:
If the Republicans end up backing the bailout plan, then I'll change my wording.
They're not even really
against it, they just want their share of the resulting pork. The Democrats appear to be diving into the money pouch like it's Christmas... :erg:
heywood on 27/9/2008 at 17:11
Ko0K, yes I'm sort of foaming at the mouth about it, and here's why. Bear with me.
First issue: is the situation really that dire?
Relatively few institutions have failed, those who failed did so for good reason, and didn't fail overnight (WaMu has been in trouble for over a year). The vast majority of financial institutions are not on the edge of failure, and with the temporary ban on short selling, their stock valuations are not going to decline that fast. Prime mortgages are still easy to get at historically low rates as long as you have decent credit and can afford it. Companies are not failing to make payroll. Mailboxes are still filling up with credit card offers. Nobody is losing their deposits, and FDIC hasn't run out of money. So far, the belt-tightening by banks has not manifested any doomsday scenarios, which remain theoretical.
I'm skeptical that Bush, Bernanke, Paulson, Cox, et. al. are actually telling a straight story rather than hyping up a panic to put pressure on Congress. Given his history, I'm not inclined to trust Bush. The tactic being used right now is strikingly similar to how he got the Patriot Act passed and the Iraq war authorized. And Bernanke has been feeding us the opposite line for the last year (the problems are not systemic, the economy is sound, we're not headed for a recession, , etc.) But even if you take them at their word, it's not clear to me that they're right when they say we're headed for a major crash without the bailout. The people who are telling us we're doomed are the same people whose bad judgment created this problem. The credibility of these people is very low in my opinion. Either they've been lying to us up until now or they've been wrong up until now.
Second issue: does the government need new tools to deal with it?
For the sake of argument, let's assume we're all doomed. Then the question becomes, do we need new executive authority and a new funding line to fix it? The Federal Reserve, FDIC, and Treasury have managed to handle the failures so far. The Federal Reserve can loan banks money. The FDIC can seize them and put them into receivership. They've taken over a majority share of AIG, which is still publicly traded. They seized and managed the acquisitions of Bear Stearns and Wamu. They have IndyMac in receivership. It's reasonable to argue that the executive branch and the Fed were already given all the tools they need to deal with a banking crisis back in the 1930s.
The only thing they've done so far that required new authority was taking over Freddie and Fannie and putting them into conservatorship. And now that that's happened, the FHFA has the power to deal with the main cause of the crisis: mortgage foreclosures.
Third issue: is the Bush bailout plan the best solution?
Again for the sake of argument, assume a massive injection of government funds is necessary. The proposed bailout plan, and the House Republican insurance proposal, are both aimed at the top of the problem, not the root. Neither plan eliminates risk. And both plans require putting a value on the bad debt, something that is next to impossible. What we could be doing instead is using our newly acquired mortgage giants to back the refinancing of individual mortgages to take risk out of the system (note this is not the same as what the Democrats are trying to add). Banks will have to take a loss on the refinancing, but that can be subsidized with government loans (basically the government buys low interest bank bonds). This proposal keeps most of the losses in the private sector but gives banks the time to absorb them and repay the government. It also eliminates a lot of the risk in the system rather than just transferring the risk it to the government. And it sidesteps the issue of valuing higher level derivatives.
Fourth issue: can we afford it?
Let me make an analogy. Suppose you have a family member who has been living beyond their means and is buried in debt. They go on expensive vacations, buy stuff left and right, and go out to expensive restaurants a couple times a week. They have a primary mortgage, a home equity loan, a car loan, and a bunch of credit card debt. And now that they're having trouble making payments, they propose to sign up for another credit card to get cash so they can go to the casino and hopefully win enough to cover the payments. That's analogous to the situation the Federal government is in, and to a some extent, the whole American system. You can only borrow against tomorrow to prop up the economy today for so long. The system will eventually have to correct and contract. And the more debt we're carrying when it happens, the worse it will be.
I'm not saying we have to let the whole financial system fall apart, because I don't think that will happen. We just need to take a long term view and figure out how to manage a sustained correction.
I was going to raise a fifth issue about fairness and responsibility, but this already went way longer than I planned. Sorry about that.
Heywood
P.S. If you're still trying to figure out where I'm coming from politically, I suggest you go back and read my post where I spelled it all out. I don't know how I can make it any clearer than that. I really don't.
Thief13x on 27/9/2008 at 18:29
Quote Posted by Pyrian
Er, $2,000 or so. Unless, of course, by the "American People" you meant just 7,000 lucky ones.
Hmm, yes don't I look like the idiot now fucking news guy:mad:
I was on the fly and couldn't be arsed to do the math. Maybe he was talking about households? but no, that still wouldn't add up. Regardless, the average American household is in debte about 8k, so...if the average person has 2.6 kids in America...it actually might not be a bad idea (besides prices of everything skyrocketing:p
Ko0K on 27/9/2008 at 21:20
Heywood: Rather than having to look certain things up -- and making myself feel as though I'm being less than honest with myself -- while trying to respond to your reply point by point, I'll tell you what I think off the top of my head.
It's good that we are questioning the administration's motives, and while time is a huge factor, we may actually have more time to mull this over than Bush/Paulson would have us believe. It's not that I find myself in support of the proposed bailout, but at this point government intervention is necessary, and the fact of the matter is that we need a short-term mitigation plan in the event all signs point to the shit hitting the fan. Personally, I think it's more irresponsible to throw away the bailout altogether than trying to find ways to make it acceptable by fixing the flaws, especially in the absence of consensus on feasible alternatives. That staggering amount to the tune of 700B is highly suspicious, however.
As for me "trying to figure out" where you are coming from, well, I'm not doing that. By that, I mean that I've already figured out where on the political spectrum you are sitting, but I see no reason to come across as though I am hellbent on mischaracterizing your position.
