$700B

[teancum79]

Its funny the US government seems to think that giving $700B of of taxpayers money to a few companies that mad some bad calls is going to fix everything. I can I can hardly think of a worse idea than borrowing money from China to give to people who can't run a business well as a way to fix things.

[dianaholberg]

LOL... well put. I think that instead of saying "taxpayers' money" we should be explicit and say "our grandchildrens' money". One way or another, they are the ones who will pay for our excesses.

[teancum79]

Do not fret comrade, in the next 20-50 years the evil system that has brought so much wealth to the hard working will be replaced by one that rewards people solely for their ties to those in power. The evil churches and other institutions that do not fall in lock step will be taken to pay for past crimes done. This will cover the cost of the national debt. Everyone will have an equal chance at poverty and al will be slaves except a few devoted servants of the people who will live like kings and deny everyone else their most basic freedoms. After all a truly ideal society is one where every choice is decided for you so that everyone will make the same choice.

Sadly much like in the new Star Wars movies when it happens the destruction of freedom will be to a deafening shout of joy by far to many.

[teancum79]

well the spinless sellout in the senate have sold our soals up the river. I'm hoping enough people in the house can keep their cool and find a useable solution.

[Amalcas]

The problem goes something like this: These big companies, in one way or another, tie up most of the funds possessed by the big banks (or the threatened companies are the big banks themselves). The big banks hold almost all the funds of the littler banks. And the littler banks give out loans to companies (in a cyclic fashion) that pay for many an American's paycheck each month.

So what happens if the big bad guys get their just desserts?
The big banks turn to the little banks, and tell them they can't give them back their money. The little banks turn to the companies and employers, and tell them that they can't give them their money, or give them the loans they need to pay their employees. So the employees can't get paid, and thus won't be working, or paying off their debts to the little banks (or big banks, depending on who owns the loans, not that it really matters), cutting the last link. The big banks, the little banks, the employers, the employees--they all fall, in the real domino effect. Complete, utter, and absolute economic collapse.
This is not a recession; this is not a repeat of the Great Depression; it would probably be a good deal worse. The only way we have to prevent this is to save the "bad guys." Of course, this also gives us a lot of power to change the system; 700 billion dollars is enough leverage to force these companies to correct their practices, if the government plays it right.
As part of the first generation that will be paying for this, I think it's worth it. For one, the government probably will make money on this in the long run. More than that, spreading out whatever cost there is over years seems much better than packing it into a single day of panic when the market collapses (which, while not actually the cause, would be the beginning of the end, so to speak).

People, understandably, want to punish the individuals and companies that made this mess, and thus are baffled by all the concern over saving these institutions. The problem is that nothing exists in isolation; if we let "nature" take it's course, we're going to have a mass extinction on our hands.

[teancum79]

I'm not in favor of them doing nothing, but the Federal government is now going to own a large amount of the Homes in the US. I don't think the constitution gives them power to do anything even close to that and I don't think it is the sliest bit healthy.

Its not so much about punishing the bad guys as not setting a president of fixing their errors. Running a business involves risk and rewards. When the Feds decide that they will dump money in to cover for any major errors and by the way a bunch of more rules to "fix the problem" we are getting too close to cold war Russia stuff. This roads leads directly to absolute oppression and total government control over everything.

That is a bad dark place and I want nothing to do with it. I would rather live through another 1920's depression than give up me basic rights and those of my children.

That said there where other options on the table that where ignored. We could have brought the needed stability to the markets without handing over more of our nation to a government that clearly can't keep their hands off everyone's money, religion and not far off thoughts.

[dianaholberg]

teancum, you speak for me as well. My concern is that we may see that yet. This bailout is a gigantic debt being made by people who have proven not to be concerned about running up debt and operating at a deficit. All we can hope for is an administration which insists on balancing a budget that provides for repayment.

[teancum79]

yes but are options are McCain who pushed for the stupid bill and is not an overly conservative guy when it comes to spending or Obama (who I'm referring to Hitler the 2nd because of some of his policies) whose campaign promises would at least double the national budget. Or we can vote for a 3rd party person who does not have a snowballs chance.

[Amalcas]

What are these other options?

As to the constitutionality of the measure, there is first off no mention of government possessions in the Constitution at all (which, more than anything else, means interpretation can go either way). Furthermore, I was under the impression that the infusion would be loaned to the companies, not to purchase the securities themselves, and thus the government would simply own (significant) portions of companies which own the mortgages to houses and such.
Not wanting to encourage the belief that the government will swoop in and "fix your problems" for companies when things get bad is another manifestation of the same sort of (admittedly valid) moral and practical objections raised to the bill. However, as mentioned, the idea behind the bill is that the loans come with a hefty set of conditions; while the companies would be kept afloat, their infrastructure and practices would be required to change radically.
Again, it comes down to that the men running these companies, while certainly taking some risks, have not been taking their own risks; ultimately, they have been risking our assets and well-being. And now we have inevitably lost. Refraining from rescuing the economy will not teach a lesson to these people; in fact, it would stand to make them even more powerful as the abominally rich in a world of poverty. They have already won; we simply now have a choice of how hard we take the loss.
Lastly, there is very little evidence that this degree of temporary government control would lead to a serious breach of liberties. Many countries which enjoy the same sort of freedom we do have government with far greater permanent control of their economies than the $700 billion would afford us. I would postulate that a government seeking a loss of freedom leads to governmental control of the economy is much more true than it's converse, and I for one do not believe our government is headed in that direction (the constant political upheaval of our system is a fairly good safeguard against that).

I'm going to put you on the spot now, Teancum, by asking that you put yourself in the position of making this decision, and accepting responsibility for the consequences. Without this infusion, the most likely scenario is about as follows: the big banks and companies in the United States will collapse. This will cause the collapse of the United States economy, which will send reverbrations across the world, halting the international economy and causing the collapse of virtually every other major economy in the world. The entire world will be plunged into conditions potentially far worse than those in the United States during the early 1930's. Millions will starve; millions more will die of disease. But, like with all things, it will pass; a few decades from now the world should be back on it's feet, having learned a valuable lesson.
Because of the severity of this prediction, which contrasts so sharply with our current luxury, I think we are disinclined to fully believe in this possibility, much less realize that it is perhaps the most probable outcome. I will admit I am no economist, but this prediction is not based off obscure economic principles; it arises from the simplests truths of dependence in economics, and an observation of the pattern of events that occurred in 1929.
No matter what precise probability you assign this scenario, I believe you must reasonably give it a significant probability. Could you accept this chance?

[teancum79]

I don’t want to have a major depression, but knowing the sort of life that is available to people when the government run everything I’ll take the depression every time. You are correct that there are some countries where the government runs things more than here and they are not currently oppressed into serfdom. However that can change and rather quickly in places where the government runs everything.

One of the major factors in our current economy situation is that we left the Gold and Silver based money for Uncle Sam’s word. Thus as soon as the economy slows down the dollar value falls and we are facing a major depression not just a bad year to sell all you stock. If congress has not ignored this concept in the past the crisis would not be nearly as large as it is. Congress however did ignore it. Like many other areas the government has twisted the original words and intent to the point where everything is okay unless explicitly forbidden in multiple locations.

One option put forth by Dave Ramsey was a 50 Billion dollar move to fix the housing market. In simple terms they would FHA all the houses going under. Also to remove the taxes on investing in the stock market. This would bring a lot of money in and with minimal government involvement keep us away from disaster. We would still have a rough spell, but we would not have the Feds sticking their noises in the housing market and making volumes of new rules that get in the way of people living their lives. I’ll wager there where many others ideas, but none that would put so much power into the hands of the feds.

You seem to trust the government and that’s fine it’s a reasonable position just one I don’t share. I have never been a big government lover and over the last few years of seeing many government programs from both the inside and outside and studying the theories and concepts behind many of the laws we now have and the ideas of the founding fathers I can only conclude that there is a move to turn the US into a fully socialized nation where the government will make all the decisions for its people. The upheaval of the politicians only shifts between the oppresses them soon and oppress them latter groups. Along the way there are countless people looking to abuse the power of law to make a quick buck or get revenge on someone they dislike. This is a nation that for many years recognized black people as property now recognizes unborn children as worthless and we are heading towards the old and ill are quickly heading that way. We tax people who work and earn money while encouraging others to not work at all and to live off of labor of those who do work. (I’m not bothered by the genially disabled getting help, but many programs promote the able bodied becoming life long dependants of others labor).

Long story short there is a way this country is supposed to be ran. It can be found in the founding documents, federalist papers and the writings of those whose work was used to write them. We have left those ideas and this latest bill take us even further away.

The Catholic church’s adoption services where forced to close in Mass. Because the Government decided enforcing a non discrimination clause (not part of the constitution) takes precedence over the 1st amendment. Last night Joe Biden said that he wants the courts to have the authority to alter not only the loan rate on a loan, but also the principle owed. This would place the government not only controlling directly the amount of profit a bank can make (after the agreement is made), but also alter the money owed. Thus robbing the bank of their money or passing the bill along to the tax payers. These are major steps towards wholesale communism. Which will rob us of most if not all basic freedoms including freedom of speech and religion.


So long (sorry very long) story short. This bill is horrible. The other things being looked at McCain was saying they may need to do this again before the election are wrong. A major depression would be bad very bad, but far shorter and much less destructive to our lives then using the constitution for toilet paper as is now being done by Bush the senate and a large part of the House. It is heading towards civil war not for several more years but that is the direction these policies (and many others) are taking us. I will live free or die trying.

[Amalcas]

As to the Ramsey proposal, I fear that all that would do is placate the masses, so to speak, instead of addressing the problem; still, it might work, or at least be part of a comprehensive solution.

The power to alter principal, as I understand it, would be intended for use in situations where the debtee cannot by any means pay the principal in any case. All the same, I will admit that that is a considerable power, and I'm not personally certain whether I would support extending it as a general or largely unrestricted power of judges.

The things you point out as problems with the government are, I think, generally true. However, I do not think that necessarily means that the solution is to dissolve the problematic programs; in all honesty, that might worsen the situation. Admittedly, it certainly does mean that you shouldn't blindly increase the programs.

On a more minor note, the money-backing issue is a bit more complex than you make it out to be. The global shift towards "self-backed" money was fueled primarily by the realization that there is nowhere near enough gold and silver in the world to express the capital required by the value placed on other resources and services; this made it a matter of necessity, but the more important reason for this consideration is that basing the value of currency on silver, gold, or any particular kind of resource is effective putting your eggs in one basket. The value of any resource, be it a good or service, physical or abstract, is distinct and independent from the resource itself. In other words, basing your currency on gold is like basing your currency on the price of the stock for a particular company just because the stock price has been fairly stable in the company's history. Imagine, if you would, the fate of a gold-based currency if a cheaper, equally conductive and pliable alloy was found; the demand for gold (which is, contrary to what the jewelry companies might want you to think, an industrial material just like diamonds) would plummet dramatically, and the gold-based currency would be worthless. The value of self-backed currency, on the other hand, is based not on a resource--or, I might add, the promises of a government--but entirely on what people think it is worth, which at first glance seems crazy. However, it is in many ways quite ingenious; what happens, on the whole, is that currency ends up being based not on how well a particular resource is doing (which is essentially arbitrary and very risky), but on how entire economies are doing (basically because people think that, say, if the US economy is doing well, the US dollar should be worth more, and if the US economy is doing badly, the dollar should be worth less). While this is, I'm sure, a horrible oversimplification, it makes the key point: the seemingly insane "Tinkerbell system" (as Dave Berry calls it) of having the value of currency be based on the value of currency actually results in an honestly more logical and stable system where the value of currency is in effect based on the strength of the economies which use it.
That was a bit of a length digression, but I hope it was elucidating.

[first]

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