The United States of Bailouts

I really don't want to stand up for these flub-a-dubs in government, but I think they are honestly scared that we are about to fall into an economic abyss. However, they have 2 things going against them. 1. They are wealthy and can only see things through the eyes of the rich and powerful - they don't understand that trickle down economics doesn't work because the rich and powerful are too greedy and keep it all for themselves. They don't have a clue how the little guy feels about all this. 2. They study their Harvard economics and learn that the government did not step in soon enough at the start of the last Great Depression to prevent it. Well, what if that depression, like this one coming up, couldn't be prevented? What if there had been so much concentration of wealth, so much build up of debt, so many inefficiencies in an economy that functioned only to service the rich that a depression was inevitable, unavoidable, and I hate to say this, almost necessary to clean things up? So the end result is that they know that something is very very wrong but for the life of them they don't know why all their actions aren't working. So they make things up as they go along, thinking maybe the next intervention, or bailout, or government guarantee will be the one that works. But if you listen to the comments made on all the networks, you'll find that the little guy actually has a better handle on what's happening and why and what this means for the future.

God Bless You Jason.

-------------------------------------------- Everybody please join in on the nationwide liar contest with a 700 billion dollar give away The object of the game is to be the biggest liar an a mortgage application or to claim you can't afford your current loan The biggest liars win The government, through taxation of all taxpayers, will award the prizes Don't miss out Our new national morality is don't do good work, just lie to get ahead After all the way we got into this mess is by people who already lied on their current problem loans and greedy bankers who wanted to get rich on giving out bad loans and not doing a good job of checking that the borrowers were honest and could in fact afford to pay back the loans The game starts Friday if the bailout passes -------------------------------------------- Breaking News ! ! ! Starting Friday if the bailout passes The IRS will come knocking on your door and collect 3, 6, 9 or who knows how many thousands of dollars then walk over to your neighbor and give it to them to pay their bad mortgage Also your kids will never be able to afford to buy a house in your neighborhood because the bailout will artificially inflate prices beyond what they can afford The bad bankers that caused this have already made their get away and the government would rather tax passive citizens than prosecute those bad bankers --------------------------------------------- For those that say they can't get a loan Get off your behind and go find a good banker Borrow from another country if you have to, but leave US taxpayers out of it Here's a bailout plan Let's have the US apply for a 700 billion dollar loan from, say, Iraq We can lie on the application and never plan to pay it back --------------------------------------------- Dear Congressman, thank you for passing the bailout You saved me from a desperate situation, I was about to lose my home About 9 months ago I applied for a loan on a multi-million dollar house in Malibu Some crazy banker who said he would make a killing on the commission helped me get the loan Obviously I couldn't make the payments because I don't even have a job, but I happily moved in when the loan went through It has taken a while for the eviction to go through but now thanks to the bailout I will be able to keep the home that I have grown quite fond of My neighbor is the banker who gave me the loan. He said that he made so much commission on bad loans that he was able to pay cash for the house and congress doesn't have to worry about him since he is doing fine PS Property taxes will be due soon, could you please vote in another bailout plan for that Note I only regret that my old friends will never be able to move in nearby since real estate prices are so inflated now and will stay that way due to the bailout --------------------------------------------- Guess who's comments this is in response to: Why take advice from the idiot that got us in this mess, that the bad banker bailout is a good thing. He said he thought that bankers wouldn't be greedy and would have stockholders best interests in mind. When normal people are about 6 years old they learn about good and evil in human nature. Did he miss the boat or is he truly an idiot or just another liar The bailout is bad Here's a better idea. Cancel the bad banker bailout. Use the 700 billion dollars to build new jails. Put the criminal bankers in the jails. This gets rid of bad bankers and creates a huge boast to the economy in the form of construction work, criminal investigation work, architects and other needed jobs across the board. If money is to be taken from taxpayers, it should go to good use, not given away again to those criminal bad bankers. Ever hear the phrase "Won't Get Fooled Again" (sounds great when performed by the Who) Didn't he get rich along with the bad bankers? Is he in danger of losing his house and being out on the street? Hopefully he is a prime candidate for one of the brand new jail cells ------------------------------------------------ see coverage of Alan Greenspan's testimony on usatoday.com and yahoo/finance yesterday, where he said things like, he thought bankers would have stockholders best interests in mind, and the bailout is good In fact I looked at usatoday.com a few times yesterday: - the first writing seemed to portray him as if he was giving advice, thats the one where it said that he said the bailout was good, the headline was something like greenspan says we have a financial tsunami - the next writing changed the headline to something like greenspan was shocked and the paragraph about his feelings on the bailout was taken out of the article - the last headline was something like greenspan admits mistake My response was after the initial writing of the article that I saw It is actually very interesting if you read between the lines of that changing article yesterday and the dynamic nature of online vs printed articles. The first article came off as doom is near according to respected financial leader, I bet they got a lot of flack for that and rewrote the article, so I guess I was not alone in my reaction to it, or maybe they just changed their story as the testimony continued, I guess you'd have to correlate times of article writings and whether the testimony was still going on I really object to the bailout. I wish one of the presidential candidates would have come out against it and then I would know who to vote for. And then this comes out, an article about someone that allowed greedy bankers to do their thing and now he says, ya give those bad bankers another 700 billion dollars !!! And then insults our intelligence by saying he didn't think bankers would be greedy and that he thought they would have stockholders best interests in mind. That comes of to me as lies or stupidity therefore my comments like: - six year olds usually know about good and evil in human nature, so he should - won't get fooled again, by him, he admits his mistake in the first place, then recommends giving away more to bankers - bad bankers belong in jail, maybe including him, and shouldn't get bailout money, unless its for their jail cells I guess this stuff gets to me, I try to save and invest, then outright criminal acts ruin it, this happened before with enron when my daughter was entering college and I saw the savings for her drop ~35 percent and I made conservative moves to insure that she would be able to go to college and in doing so was forced to take the ~35 percent loss. Interesting though if you just rode it out back then the stock value fully recovered which was the case for my retirement money that I didn't have to take out back then and so it fully recovered back then You know now I almost hope we have deflation, so my cost of living at the time I retire will be down to where my retirement money value is. Almost looks like deflation is happening: stock values are down, real estate is down, gas prices are down, workers earnings may go down and lost jobs have already happened. And since I have 4 kids entering adulthood I hope house prices etc. become affordable to them I should probably post to some website, I guess I should look into that but I'm not really sure how/if to do that, I did find a site to send to congressmen and I sent in my earlier sarcasm, yet unfortunately the damage is already done, but sometimes feedback can help turn things around -------------------------------------------------

WOW this has sparked a bunch of outrage. I'm glad I'm not alone in this feeling. The only way to stop this bailout madness is to stop paying taxes. Claim those 9 dependents put the extra in a credit union you have to save this and not spend.Then when tax time comes around file your 1040 with 1 dollar and you can avoid getting in trouble for not filing. Do this for a number of years then you can get an ex IRS person to settle for a whole lot less then what you owe. Time to give uncle sham a little bit of his own medicine.

When the productive members of society no longer feel they are able to be rewarded for their thrift and time they leave for places where they can keep the most of what they exchange for their labor and good decisions. It used to be the USA was one of their destinations. Look for an outflow of smart people. Do the Feds really still wonder why banks will not lend in spite of the threat of court ordered debt forgiveness and interest rate reduction? Why the UAW wants money to fund health benefits and compensation to their laid off that is unavailable to most of the productive workers and people are against it? The federal government even set up a different retirement plan outside of Social Security for it's employees - if the chef won't eat the food he cooked what's wrong with it? Won't be long until the immigration issue takes care of itself because opportunities will be better in Mexico than here.

Extortion seems to be politically incorrect today. Today the proper term is "to big to fail". The big three along with the rest of the government bailout racketeers are busy selling you, the person who is not involved with all of their failures, a big fairy tale. Some how, you paying a bunch of extra tax so thieves, extortionists and liars can continue going on as thieves, extortionists and liars, is finacially better for you and you will greatly benefit from it? Please tell me another great fairy tale bedtime story like the one about how the 79 chrysler bailout benefitted the taxpayer. Which ones? Again, as a self employed person you give me only one option and that is to quit paying taxes. This truely does benefit me and you won't even have to tell me a fairytale bedtime story. Do we have a deal uncle Sammy?

Did anyone watch the evening news? It seems now that the focus of the bailout money has changed to giving OUR money to consumer loan companies. These companies will in turn take our money and loan it back to us with a healthy interest rate attached. So if I understand this correctly we are going to borrow money from ourselves and provide interest income to these companies so that the top execs can generate the capital to invest in oil speculations which in turn will drive the gas prices back up which has been the single biggest reason "commoners" have not had the spendable income to drive our economy.Oh, and by the way, we are going to do this so people can borrow money that they probably won't be able to pay back. Cool huh? And all this thought coming from just a high school education.

The theory not only works in a vacuum, it works in reality. Jobs will be created as the capital gets re-aligned. It will be painful, people may have to move to look for work. Some people will be out of work much longer than others. But it is only this painful because the boom portion of this business cycle was so artificially pumped up by easy credit Fed policies and deficit gov't spending. Incidently the free market did work out the Great Depression. It took over a decade, because the gov't intrusion in the market was so widespread, not to mention the boom phase, created by the Fed, was pumped up so high. The gov't intrusion included raising taxes, increasing tariffs (which raised everyone's prices, including costs of production), and gov't deficit spending. The point is, the downturn will continue until such time that the malinvested capital gets properly realigned to where the free market is demanding that it go, to more cost efficient productive ventures. Gov't can't realign it through its policies because its policies are the reason it has gotten misaligned in the first place.

When I was growing up in India, a regularly observable event has left an indellible mark on me. There stood, near my home a usually quiet temple frequented by the devotees. Every once in a while, a generous devotee will emerge and would be handing out as "blessed by God" goodies - usually items of food and sometimes clothes. These were devotees way of sharing whatever they could afford with those poorest people who could not afford much in life. As a child, I noticed that when the frenzy of such handouts was at its peak, many people wearing nice clothes and appearing much better off will also make a dash to collect those alms. It showed that a temporary swallowing of pride can lead to some quick gains. As we shower our goodies on people/firms who have no means left, through TARP 2008 version 1.0, I wonder how many well to do CEO's have advisors developing powerpoint slides that will make a compelling case for them to become elligible for handouts under this TARP 2008 version 1.0. There may be some CEOs who are not working hard to gain benefits under TARP 2008 version 1.0. And, if there are some of those, I wonder if they aren't delinquent for not acting in the best interest of the shareholders.

US autos cant go under or I will be stuck driving a used car forever.

Is anyone surprised that your elected representatives are busy legislating actions against your will? I am in agreement with the Recall as a minimum or another Boston Tea Party. The recall target would have to be a powerful person, someone along the lines of House Speaker Pelosi or the minority whip. Essentially the underlying theme of the Boston Tea Party as I recall from History 101 was "taxation without representation". Sounds kind of like what is going on right now doesn't it? My latest theory on the change of heart/confusion on the bailout is that the new regime has been preaching an economic policy reloving around the bottom up theory. Speaker Pelosi, Obama, et all have been clamoring for another stimulus package. Most of us know that there is no cap for the bailout; only $700B increments. As one poster suggested the figure will be in multiple trillions. The inevitable problem with handing out free money to everyone is one day our treasuries will not sell. Who is going to buy paper from a bankrupt country? Perish the thought that we live to see that day. Nothing better than the most powerful country on Earth going into full anarchy. Folks, there is a reason why the largest Christian nation in the history of mankind is not in the Bible.

Paulson made the right decision to put money into the bank's capital. This way, they (who are in the business) can work out the toubled assets, then write off the losses. The government wouldn't have a clue how to re-work the loans. This might actually work! I'll give it 6 months to start seeing a turn-around.

To A Capitalist I understand that your theory of economic survival works in a vacuum, but that doesn't translate to the real world. There are no jobs for these workers to re-employed, the unemployment rate is rising and will continue to rise. There is not enough capital for a new company to rise from the ashes of GM & Ford, and there is nowhere for these workers to go, not to mention the people who will become unemployed who sell, service, and manufacture OEM and aftermarket parts for these cars. Estimates place this at better than %10 of the U.S. workforce. Without these jobs, a second Great Depression will be inevitable.

The honest people , who are paying their bills , each month , want their fair share of the handouts and give-aways .When you reward bad people and their bad behavior , what do you get -----More bad behavior !

Paulson, Obama and Pelosi have a plan. The IMF will bail the US out!! We will standing next to the third world countries requesting 'aid' from IMF soon.

Tom, You don't understand. More money is lost by the gov't bailing these automakers out than saved. The market is telling GM you aren't producing efficiently enough. And if you can't do it efficiently you'll be out of business. We will still need to buy cars/trucks. But those cars/trucks will be produced by someone else. They will need to ramp up production and hire add'l employees to do it. For example, if Company A produces vehicle for $100 and Company B does it for $95, why would we want to make sure Company A stays in business. The $5 saved by having Company B produce the vehicle is used to do other things in the economy. By having the gov't bailout failed enterprises, we doom ourselves to higher prices and higher overall economic costs. The short-term pain of those workers who lose their jobs, is offset by lower prices for everybody which leads to their re-employment in another enterprise.

The government needs to remember what it was made for which was by the people for the people not businesses. No bail outs for businesses if the government wants to rejuvenate the economy the bail out money should be given to the people. If the government gave all that money to each and every 18 yr plus American Citizen the people would pay their debt which would revitalize the financial industry, develop new businesses which would assist in the job crisis, some would buy their first home which would help the housing crisis and others might invest helping the stock market. And there would be lots of people making other purchases which would boost the economy auto industry, retail industry, creating and keeping even more jobs. They could even tax the people on what they give and thus it would not even cost what the already approved bail out monies are. If each got 500,000 taxed 136,000 the people would take American citizens.

I'm so mad at myself for buying a house I could afford. Why didn't I think and get one that was two or three times what I could afford? Gosh, I could have a really nice house right now and I wouldn't have to pay for it! Oh, I know, maybe if I just stop making my house payments they will come and pay the rest for me, too!! Or at least drop my 6% rate down to 3% or how about 0%! I just have to be late on my payments to get this deal, right?!!!

If anyone was paying attention to the news today -- the BAIL OUT now is costing a WHOPPING $3.5 TRILLION dollars. This is just shy of 8X the CURRENT National Debt. If you are complaining that this is TOO much; then we need to STOP the HEMORRHAGING NOW. NO MORE BAIL OUTS. Look at the deal now that AIG is making. They got their $85 Billion and went on holiday; then come back to ask for another $35 Billion and then negotiate the terms to be now for 5 years and not the original 2! Now watch them come back and say they need another $100 Billion and ask for that to be at 10 years; then watch them come back again for an extension to 20 years; hey while they are asking; let's make it 40 years and lower the interest rate to zero while we are at it. When is enough enough? Do what they do with banks who fail. Break them up and assign them to OTHER banks; or in this case other INSURANCE companies. Let's do the same with the car companies. IF we are giving ALL of them (the big 3) Bail out money; then let's change the way they are doing business totally. Let's form the REAL "AMC" American Motor Company and get rid of 2/3 of upper management; streamline the factories to produce cars that people want. Any further bail out money to any company should have the stipulations that 1. All management bonuses are canceled; effective immediately and any paid within 6 months of any bailout money requested is to be returned. (It was their failed leadership that brought the problems.) 2. All vacation times not used over 14 days a year by the end of the year are eliminated. The next year; only 14 days are allowed. (everyone must come to the table to keep the company afloat) 3. All employee bonuses are canceled until after the bailout funds are repaid (if they don't like it; then they can allow someone else to take their place in the work force) 4. All dividends are canceled until the bail out money is repaid. The alternative is No one has a job. The airlines have done this in the past; they came out of bankruptcy. The car companies are resistant to do so; but that is always an option for them. Maybe then they could come out better in the long run. No one is "too big to fail". Let's get past that part. They ARE failing or already HAVE failed; they should have planned better and made better decisions. Now we ALL must pay for them including their bonuses.... staying in business is an option; not a right.

Ken, I fear you are right about someone greasing the skids on this bobsled. I hope at some point the brakes will be put on this bailout nonsense before hyperinflation sets in.

It would seem to me that if small business is where the most jobs are created in our economy then why would that not be the focus of any government bailout. I guess I just don't get it. Companies like AIG are too big to fail or so we are told. When we do bail them out we should break them up into separate entries so we will not have to face these issues again. No longer too big to fail. I realize there are many economies of scale that large organizations benefit from and potentially (yea right) pass these savings along to us as consumers, but I doubt if they would add up to the trillions of dollars we now have to fork over to these badly managed entries. We really need to look at how these large corporations have us, the American people, over a barrel and prevent this from happening in the future. No big banks, no big automakers, no big anything. I doubt if there is any more value a large entity can provide over a well managed and run regional corporation. If we broke these companies up it would create more jobs and have a positive effect on the economy while creating more tax revenue for the government. I realize that this approach is not a panacea but it would be a step in the right direction for all of us.

So it seems the Wall Street folks claiming to be free market capitalists really weren't capitalists at all. They wanted to keep the money when things went well, but they want to shove the losses on to the tax payers. Free market capitalism is supposed to obey the wishes of the consumer. We vote every day with our money. What we don't want, we don't buy. Companies producing what we don't want or at prices we won't pay go out of business. Companies that produce something we do want for a price we will pay stay in business. Free markets by themselves weed out the poorly run companies. Contrast this to today, where the gov't wants to prop up poorly run companies with your tax dollars. If we wanted to prop them up, we'd do it by ourselves without gov't involvement, we'd buy their products, their stock, or loan them our own money. The collapse of this market is the bust of the boom/bust cycle created by inflationary monetary policies. The market is trying to correct itself. But the gov't is trying to stop it, with YOUR MONEY.

Hey Jason - AMEN!

My thoughts exactly. And I mean it. I had just vented to my Senators before finding this article. How can they expect us to have confidence in their decisions when they can't even keep their focus on TARP? Someone has greased the skids on this bobsled.

As long as the UAW exist the US auto industry will never ever ever never ever ever ever EVER be able to compete with the rest of the world. It is simply not possible with that Union calling the shots. That said........how will the Government of Japan, Korea, etc. react to this very unfair advantage the US Government plans to bestow on GM, Ford, and Chrysler? We've screamed about fair trade for years and now all of a sudden the US Government is making major changes to the way we play that game.