Do people know this authors’ degree is in Psychology? Its a little insulting to economists. Kind of like a person giving out medical advice while trained as an engineer.
Why does the author think that because the bill wasn’t passed nothing was done? The Reps listened to their constituents, other views besides the alarmists and voted “no”. Doesn’t mean they did nothing.
Do not bail out financial institutions and wall street, direct bail out funds directly to the American people. We have tried ‘trickle down’ economics and it has proven to not work. We should try ‘bubble up’ economics. If the legislature votes for a plan that does not include direct to US citizen distributions, I personally will vote against my congressmen in the upcoming election.
Michelle in Tucson, quit Dreaming! Outside of the fact that your numbers are about 3 places out of whack, why give people money they didn’t earn? That’s the most socialistic Nazi thing I’ve ever heard. Economic Boom? Do you think the 19 yr old bum kid at McDonalds is going to keep his job? That plan would be utter chaos. Have of the US would quit working because they are not smart enough to know that that money won’t last. Everyone will be going to WalMart to find the doors shutdown because no one wants to work. What ever happened to people rolling up there sleeves and working? Michelle, please do the following: avoid mating, invest in a calculator, don’t teach math, quit playing the lottery and don’t blow dry your hair while taking a bath. Got some Ocean front property there in AZ?
Any government MUST include something to help the average American and not just Wall St. Force banks to lower their interest rates on the “bad” mortgages to a REASONABLE rate, then extend the length of the loan to cover the number of months the homeowner is in arrears. Then, and only then, the government can step in and lend a hand to the banks. If the banks don’t do this, then they don’t get the monetary help. It’s a win/win situation; people get to keep their homes and the banks don’t end up being in the real estate market. Also drop the credit card interest rates to a reasonable rate. Cut off all those “golden umbrellas” and make them obsolete. If the company goes down, you get nothing. If it flourishes, you get a reasonable bonus. So much of this mess is based on greed. It was only a matter of time before this country imploded on itself due to greed.
I’d like to say thanks it’s time we stop living beyond our means and to start running wall street by numbers and not feels and rumors
This is the proudest I’ve been of our government in recent memory. I hope it lasts, though honestly in answer to the question, if there is no bailout I believe stocks will tumble and that will scare enough constituents that members of the house will cave and a slightly revised version will pass. My hope would be that instead of revising a bailout, they come up with an alternative and take more than a couple of days to do so. I want them to come up with a plan that protects as many Americans as possible while accepting the fact that this bubble has burst and that is not going to reverse itself. It is a prime opportunity to drastically revise our financial system to be less based on debt. Let credit dry up a little, but come up with a contingency – like creating a program where Americans facing foreclosure can have their house reappraised at its fair value now – not the inflated price they bought it for, and then lower their payments and give them a few months to start paying them. Let the bubble burst and prices go down and let there be less credit available for expansion in the next few years while as a government facilitating some stability for homeowners, workers and employers. Americans are willing to put money towards that and willing to tighten the belt as long as they can keep their jobs and their homes, commute to work and pay for groceries. And let’s get universal healthcare started to unburden business owners and employees from their monthly insurance payments and the fear of unexpected medical expenses. Plus, media and politicians – it is not helpful to be so inflammatory about the situation. Doomsday predictions will only drive the markets down faster and lessen the time to come up with a responsible contingency.
I’m all for the idea of giving the money to the tax payers. So they can put the money back into the system from the ground up. The currant population is around 305,000,000 divide that by three as they say that the average family is 3 persons. So if you take the 700,000,000,000 and divide it by the number you reach after dividing the population which would be roughly 101,000,000 you end up with the average family recieving $6900 dollars. With that much money people will spurge and there by help everyone from Walmart to Wall Street.
Even my dad who is 83 says this is the only way to correctly get things back on track. And he has been there and done all this once before.
April
This is a BAD time, but not the end of the world. One can blame the administration for not acting and sitting on its hands while watching this mess unfold , but the damage is done and we have to learn from it. Bad decisions can’t be fixed by making other bad decisions to throw more borrowed money at the problem. All we can do is ride out the effects of credit spending, tighten our belts and pay off our collective loans. More to the point, demand that regulations are put into place to prevent this type of fraudulent behaviour where stocks and money are manipulated to self serve a select few.
Re Bernanke and Paulson- These guys are there for their mates and are looking for the easy way out. Gee, they are sure good at sticking on a plaster, but the next day it’s all back to the same problem again.
We ‘plebs’ are told not to worry and that shares are a long term thing. In the long run all will be fine. It’s a pity that these fraudsters aren’t made to hold their shares for a certain time – at least a week – before selling on again. Meanwhile these creeps are creaming off all the profits. This is fraud and the Fed should look at ways to get some of this cream back.
As for liquidity – if a bank has loaned 40+ times the money it has access to, then there is a problem. The money world has gone mad and there has to be a brake applied to this nonsense. No-one should run on credit. It is stupid!!
Michelle, there is a problem with your math. $85billion divided by 200million is only $425.00. Even $700billion divided by 200million would only be $3,500.00. It matters not, the House rejected this bogus bill. Finally, the government did what the people (majority) wanted. For better or worse.
This was sent to me via email.
I’m against the $85 Billion bailout of AIG, as well as the $700 Billion for the rest of the selfish crooks! Instead, I’m in favor of giving the $85,000,000,000 to America in a “We Deserve It” Dividend.
To make the math simple, let’s assume there are 200,000,000 bonafide U.S. Citizens 18+. Our population is about 301,000,000 +/- counting every man, woman and child.. I figure there’s about 200,000,000 adults 18 and older. Dividing 200 million adults 18+ into $85 billon that equals $425,000.00.
Here’s my plan. Give $425,000 to every person 18+ as a “We Deserve It” Dividend.
Of course, it would NOT be tax free. So let’s assume a tax rate of 30%. Every individual 18+ would pay $127,500.00 in taxes (which returns $25,500,000,000 right back to Uncle Sam!). But it also means that every adult 18+ has $297,500.00 in their pocket. Think about i t:
A husband and wife has $595,000. What would you do with $297,500.00 to $595,000.00 in your family? Pay off your mortgage? Housing crisis solved. Repay college loans? What a great boost to new graduates. Put away money for college? Why not? Open a saving account at a bank and help create loan money for mortgages and entrepreneurs. Buy a new car (create jobs); invest in the market (capital drives growth); pay for your parent’s medical insurance; there’s lots and lots of things an extra $297,500 might improve, don’t you think?
If we’re going to re-distribute wealth, let’s really do it, instead of trickling out a puny $1000 ( “buy your vote” ) economic incentive being proposed by one of our candidates for President.
If we’re going to do an $85 billion bailout, let’s bail out every adult U S Citizen 18+!
As for AIG – liquidate it. Sell off its parts. Let American General g o back to being American General. Sell off the real estate.. Let the private sector bargain hunters cut it up and clean it up.
Here’s my rationale. We deserve this money; AIG doesn’t. You may think this is a crazy idea that’ll never work. But just imagine the “We Deserve It” Coast-To-Coast Block Parties! Can you say, “Economic Boom?”
I trust my fellow adult Americans to use their portion of the $85 Billion (remember, my plan actually costs $59.5 Billion because $25.5 Billion is returned in taxes to Uncle Sam) to boost the economy much more than Congress or the Executive Branch ever could!
Who’s with me?
Why should we bailout anyone who is in debt? You spent money you didn’t have, so it is your problem. The world will not be destroyed, and poelple and banks will finally have to live within there means. Simple yet elegant principle, isn’t it. Things should have never gotten as expensive as they are, and it is this debt theory that makes it all possible. Why bailout Wall Street or even Main Street? Live within your means, and save your retirement money in a safe. It will never go down, and will keep increasing as long as you add to it like you should. No need to pay a “brilliant” money manager there. If these money managers are so brilliant, why don’t they find a viable and quickly implemented type of alternative energy. That way they will add to society, instead of being a leech that sucks the blood out of the American economy. Just a thought!
The world will continue to go on, there will be a few less millionaires and billionaires in this country and our grandchildren won’t be paying on the $700 billion bailout fifty years from now – please write your house representative and senator and urge them to vote no!
A friend of mine came up with an interesting idea regarding economic crisis. What if instead of giving the 700 billion to Wall Street the government gives the entire 700 billion to the people with these conditions: 1) The 700 billion is divided up and dispersed to every American over 18 years of age. I am not sure but I think that would be over $200,000 per person. 2) If you are in foreclosure or have a mortgage, owe on medical bills, or credit cards that money has to pay your debts. This would instantly give money back to the lenders and the homeowners save their house. Also, the people who don’t have these debts will instantly have money they will be putting back into the economy. People would probably be able to buy homes. Then they would be buying products for their new homes, thus instantly stimulating the economy. 3) The money given to us would be taxed by the government. 4) If you are a prisoner your money go towards paying the expenses the government pays to house and feed you. This plan would give lender’s the money to lend again and people money to invest back into stocks and the housing market. Also, not to get into this mess again, we have to realize what got us into this in the first place – the cost of living is to high, making it impossible to survive without credit we really can’t afford. Most young couples can’t afford to buy a house today and survive on what they make. We just haven’t noticed how out of whack the cost of living is because we have been able to get by using borrowed money we really can’t pay back. I know the economic system is much more complicated then my friend and I making it out to be, but could this possible do more for the economy than the current proposed plan? Any comments or insight would be much appreciated on our “crazy” idea!
Wall Street bailout should come in the form of FDIC insurance backed loans and 80% public equity ownership in a two year term just like the AIG bailout package. This will increase companies capital and help solve their liquidity problems while forcing them to aggressively pay the loan on time.
Question: If credit is so hard to come by, then how come banks don’t charge higher rates?
Answer: It isn’t hard to get credit from good banks, but they arent’ the ones making all the noise. Take a look at federal reserve data and you’ll see that total loans and leases is showing no sudden drop (weekly series TOTLL at http://research.stlouisfed.org/fred2/release?rid=22):
Title: Total Loans and Leases of Commercial Banks
Series ID: TOTLL
Source: Board of Governors of the Federal Reserve System
Release: H.8 Assets and Liabilities of Commercial Banks in the United States
Seasonal Adjustment: Seasonally Adjusted
Frequency: Weekly, Ending Wednesday
Units: Billions of Dollars
Date Range: 1973-01-03 to 2008-09-10
Last Updated: 2008-09-22 8:35 AM CDT
Notes:
DATE VALUE
2008-05-14 6913.3
2008-05-21 6924.3
2008-05-28 6927.5
2008-06-04 6919.3
2008-06-11 6920.7
2008-06-18 6896.4
2008-06-25 6893.2
2008-07-02 6883.9
2008-07-09 6885.2
2008-07-16 6908.5
2008-07-23 6924.8
2008-07-30 6915.4
2008-08-06 6922.7
2008-08-13 6931.5
2008-08-20 6953.6
2008-08-27 6941.6
2008-09-03 6927.0
2008-09-10 6912.8
What can the American people do, to “STOP”, this travesty? This is just the final nail, in the “American Made” coffin. I truly believe, this matter, was already settled, back in June or July. Chris Dodd and Barney Franks, are just conducting the “Dog and Pony Show”. It’s “high drama”, designed to “spoon feed” this “give-a-way”, to the American people. Why are we not calling for any impeachment, of government officials, who have had a hand in this mess? Why are the companies, not held to account , for “their” part in this mess? Who’s going to jail? Why are Henry Paulson and Ben Bernakie, and President Bush, not jailed, for “treason”? Someone is responsible, for completely destroying the American Economy. WHO? Where did the “buck” stop last?
Not much bad will happen. It is difficult to imagine that there are $700 billion of MBS left to buy up. I seem to remember that this amount has already been written off by the investment banks. The ‘real’ banks hold very little of this stuff.
Here is my suggested approach with numbers:
3 million flaky mortgages 2005 – 2007
x $250,000 average flaky mortgage size (100% of average home price 2005 – 2007)
x 10% (pay 10c on the dollar and pray)
= $75 billion needed for ‘bailout’
So, we don’t need $700 billion; we really need only $75 billion to buy up the flaky MBS. Then, if we can clean them up and resell them for 25c to 50c on the dollar, the taxpayers will profit nicely from saving the investment bankers from themselves.
These MBS are NOT worth face value; that much is clear. Please, do not throw good money after bad down this rathole.
Also, we need to emphasize the FHA/GNMA for housing mortgages going forward. These loans are 30-year, fixed-rate, and assumable, which is what the doctor ordered.
If no bailouts are passed then the markets will function exactly as they should function, flushing poor companies down the drain and raising new greater and better companies to replace them. It’s outrageous to believe that it would be any other way. Study 1930’s,70’s,80’s, 01 etc. markets overcorrect and then emerge stronger than ever. Personal ignorance should not be an acceptable excuse for encouraging intervention, your emergencies are not mine and mine are not yours.
I absolutely agree with Karen in Huston. If they pass this thing, on that day (or the first business day) withdraw your funds from any bailed bank and put them into a prudent local bank.
Not only will this punish those who screwed up (can I say that here?), but it will make funds available for mortgages a lot faster then the government’s plan. Not only that, but your money will be lent to people in your community, helping to boost the local economy. (And heaven knows local economies are going to need it soon.)
Congress CAN NOT STOP this check kiting ponzi pyramid from falling. Tell them to stop trying to.
Has anyone ever thought about what would happen if congress decided to use $700B to fund infrastructure projects, medical programs, schools, etc…? Yes, it would put money in Americans pockets wo could then buy the forclosed properties from the banks at the 10%-20% less than the current market values what they are really worth. Forclosures stop. Home building can begin again. Mortgages can begin again to people who can afford to pay them. Americans might have some money to save. Problem solved. Check please.
Of course that wouldn’t help the banks, but come on! That’s not what this should be about, though it is becoming just that. Not all the banks were stupid enough to lend money to homeless people and cocktail watresses claiming to make $200,000 a year and they are going to survive. There will be a banking system here if the banksthat need to fail for their stupidity fail. I don’t want to help the banks who did this to our economy. Give the money to American businesses who employ Americans that will spend it if you want to keep the economy going. Buying bad debt by going into debt … that’s just stupid.
Paul, I hate to say “I was right” on your all optimistic post before. People are pessimistic for reasons. Of course, “eventually” things will change. But until we figure out what’s the root of the problem, throwing dollars to a black hole doesn’t do any good.
I agree Congress should act fast now to stop the bleeding. I am also for phased in approach. Accountability is extremely important. The good thing about this crisis is that people now understand “Wall street greedy” is not a good thing when it goes to the extreme. We will find the reasons why we are where we are at the much deeper level later.
Now we really need to be confident and optimistic!! After the darkest moment, there will be dawn…
Some big businesses will fail, People won’t be able to borrow more than they can pay back. Where’s the downside? Leave it alone!
The thing I find ridiculous about this bailout, and it is a bailout not a “rescue”, is that they keep saying we need to keep the credit flowing. Isn’t that what got us into this mess in the first place? So the credit is tightening. Good! We as American’s have been on a borrow and spend spree for too long. Let capitalism work. The weak banks will fail. This will leave our financial system in a stronger state, not a weaker one! People who over borrowed will loose their homes. Oh well. They should have created a budget to see what they could afford. It is not up to the government to socialize the financial industry and it is not the tax payers responsibility to bail out irresponsible companies. Let them fail. We may have some short term pain, but we’ll be better off in the long run. American’s as a whole will have to become more responsible about their finances if they want to secure a loan. What’s so bad about that?
Oh my God! The heroin addict has run out of heroin; what will happen if we don’t give him some more?
Since the about spring of 2007 Ihave watched with amazement as Bernanke and Paulson and you, Paul have been telling us that this housing “problem” will be contained, is not a problem, will not affect the broader economy, etc. (Have you all have been watching too much CNBC?) You have been wrong right down the line. So please tell us why we should believe you are finally right?
Why will the marketplace not work all of a sudden? What credit do you guys have left? Now with your frantic cries about a credit market freeze if it isn’t bailed out with taxpayers’ dollars, you are helping to setup a self-fullfilling prophecy. Thanks.
The markets have been working over the past year to force the worst of these investment banks to write off their bad debt and go under if that is necessary. More of the same is the order of the day and the
Fed and Treasury should continue to facilitate this weeding out process. If this market process fails and credit markets actually “freeze up” (unlikely except at much higher interest rates than we have yet seen) then and only then will more drastic measures be needed. And those measures don’t have to be limited to bailouts funded with taxpayers’ dollars.
Your opinions are being noticed in Congress!
News item: “Aides to lawmakers in both parties say telephone calls from constituents are running heavily against the bailout — in some cases nearly 100-1 against, making the vote a potentially tricky one for a candidate in a competitive race. ”
Our feedback is making a difference, and many House Republicans are standing up against this bailout based on what their constituents are telling them.
If you haven’t already phoned or emailed your Senators and member of the House of Representatives, do so NOW! It is not too late!
go to:
The RESPONSIBLE banks don’t have a problem, or need a bailout.
And these banks continue to lend, so much for Treasury Secretary Paulson’s claim we absolutely must have this bailout because lending is “frozen up”.
Here’s a news item from CNN:
“The littlest guys are still lending
While the credit crisis has shaken Wall Street to its core, the thousands of community banks that make up the lion’s share of the nation’s banking system remain, to a large extent, quite secure.
“Our lending window continues to remain open,” said Jonathan Fox, the chairman and CEO of The Fowler State Bank, a Colorado-based bank an hour’s drive from Pueblo with about $56 million in assets.
Fox admitted that, since the credit crunch began, his bank has taken a harder look at the value of a piece of real estate involved in a loan as well as a customer’s income.
But he said that his bank, which traces its roots back to 1899, can continue to lend freely because they didn’t get caught up in the subprime mortgage market.
Fowler is not unique in this regard either.
Karla Wilbur, a senior vice-president at Passumpsic Savings Bank in St. Johnsbury, Vermont, said that an existing customer with a good credit standing and steady income who applies for a home equity loan could very well qualify for it.
She said the 11-branch bank, which serves towns along the Vermont-New Hampshire border, has ratcheted back on some of its non-core loan business — such as buying loans from car dealerships or doing joint commercial loan deals with other banks.
But she added that the bank’s consumer lending business hasn’t been affected all that much following the panic that spread through the credit markets last week.
“It pretty much looks like it did a month ago or two months ago,” said Wilbur. “Things haven’t changed a lot.”
if this bail out bill passes.
We the people will have to vote with our bank accounts.
We will have to take all our money out of the top national banks and place the money in our local banks.
This will cause the major banks to go under and Washington to realize we mean no bank bail out.
Paul, Paul, Paul. For 2 weeks now you have been predicting doom and gloom and the end of the world as we know it. Guess what? Still here! The world has not ended so quit being a fear monger. Or is that you have a personal stake in this? Heavily invested in financial stocks maybe?
A decade of predatory lending practices are finally coming full circle. The financial firms of this country have tapped out the American consumer and are now looking to the Government to bail them out. All the while knowing full well that this will not solve the crisis that they created but hey, they will be long gone with the money by the time America realized how badly they got screwed.
If you really want to solve this problem then bailout the American consumer. Pay off their debt, in full. (It’s our money that were talking about here anyways.)
This will kick start the economy again. How you ask? Well with the debt paid, those toxic mortgages will be paid, banks will be able to lend again since those balances are no longer negative, AND the American consumer will be able to get back to being consumers which of course drives our economy.
Reset the game in other words. That will give the politicians time to curb the predatory lending practices and put some oversight in place for the financial sector, which it sorely needs.
The predatory lending hasn’t been a big story yet but it will be once the dust settles on this so called “crisis”
Credit freeze? Please, this is nothing more than Wall Street trying to force politicians into opening up our pocketbook. If banks wanted to lend they would but they are gambling on the “fear factor” of the “crisis” to force Washington’s hand.
Face it Paul, if the world was going to end as we know it, it would have.
This is Wall Street’s problem, let them solve it. It may be short term pain for us consumers but they need us more than we need them. (contrary to the propaganda that has been shoved down our throats the last 10 years)
Note to politicians: if you value your job you will not bail out Wall street.
Thank God this is an election year.
ok now.. when 3 Noble prize winners and 166 prominent US economists oppose to bailout, you know something’s not right..
http://www.bloomberg.com/apps/news?pid=20601110&sid=aNKGD.bJwmRA
Do, have your read any news lately? the majority of taxpayers say no. oh and by the way who made paulson and bernanke and congress the ones who know the answers. another thing is why should i prop up a house of cards? why should i accept what these politicks say, 20% or so approval of bush and congress, guess we know who is the smart ones. lets stop this stupidity.
I’ve looked at the so called “credit freeze” at both the CNN site and the St. Louis Fed’s offical data and THERE IS NO FREEZE! It is merely flat or slightly increasing. This is what is causing our “crisis”. Stop this bailout and you will see a quicker return to normalcy. Let it go through and we will have prolonged agony.
By the way, the only thing Congress should do is to pass a bill stopping the lax lending standards.
Allowing only mortgages 3x annual salary, no more of 30% debt(PITI) to income ratio and minimum 20% downpayment. From that moment on investors will start buying securitaized mortgage bonds as the risk will be clear and low (right now they don’t know what kind of trash banks are selling). Credit “freeze” over and no bill for the taxpayers.
Banks have been conducting their business as over-indulged teenagers. They need adults to make the rules.
I know this comment will be deleted again.
Note to Congress: DO NOTHING!
They might notice us if we are loud enough.
Note to CNN: Don’t become a tabloid.
You are becaming a sensasionalist tabloid trying to scare readers about the credit freeze so we might surrender to the Bailout.
From CNN article:
“Another example comes from Savitt. One of his clients was buying a home for $205,000, putting down 20%. The buyer had an excellent credit score in the mid-700s, and the house was appraised at a little higher than the sale price.
The problem here: The borrower’s debt to income ratio would be at about 45 – slightly higher than what most banks like to see, but by no means excessive.”
That kind of statement doesn’t give much credit to a suppossely financial media leader.
How can CNN state that 45% debt to income ratio is not excessive!! Do you understand basic personal finance? 30% is already in the limit. With a 45% limit a borrower would have little or nothing to save for a rainy day, if he looses his job he looses his house and the bank incurrs in a loss. Really, it is a very basic principle.
That would be great news. Wall Street bankers who started this mess will go out of business into the dust bin of history like Hitler.
It will keep America’s taxes from being raised on them to support the super rich. All the bail out money will go to the super rich Chinese and Arab investors.
Erin Callan the former CFO of Lehman Brothers shows just how stupid they were. She said in Fortune that Lehman was making 20 percent off commerical real estate loans and doing fine until the crisis hit.
LOL what they had was crooks borrowing money to buy real estate that did not exist and then paying them 20 percent of the stolen money for a year so they could line up even more loans the next and in the third year take the money and run. Wall Street bankers have lost 20 trillion to crooks some of them Russian and some of them Bin Laden.
Did she really think people like Donald Trump would get into 20 percent a year interest on real estate? He probably gets less than 5 percent interest a year on his loans.
LOL the crooks put totally stupid people in positions of power in order to steal 20 trillion dollars.
700 billion is just this month’s interest payment on the stolen money.
It’s Enron all over again.
Hasn’t the government already done SOMETHING? Yes. Recall Bear Stearns, Freddy and Fannie, AIG etc. Did it help? NO. So, why the author thinks that doing SOMETHING will do us any good? I hate the idea that 6 months later we are in the same spot minus 700,000,000,000 OUR dollars. And guess who will get a big chunk of those 700,000,000,000 OUR dollars?
700 billions is more than 7 grands per taxpayer. I don’t think we can afford that.
DO NOTHING!
—–
“I suspect that part of what we’re seeing in the freezing up of lending markets is strategic behavior on the part of big financial players who stand to benefit from the bailout,” said David K. Levine, an economist at Washington University in St. Louis, who studies liquidity constraints and game theory.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aNKGD.bJwmRA&refer=home
—–
BAILOUT IS COMPLETELY UNACCEPTABLE. KILL IT.
Christopher Shays, as long as this bailout stays dead and you vote against it, you have my vote. If this bailout passes, I will personnally make sure it costs you at least a dozen votes.
ABOUT BLAME
Wall Street is to blame for this financial crisis. Even if congress does nothing and Wall street collapses, it will STILL be Wall Street that is to blame. So killing this bailout will only hurt you with the richest 1% of Americans, which ISN”T A VERY BIG VOTING BLOCK. However, if you passes this bailout, you are going to really TICK OFF the other 99% of Americans.
Do SOMETHING! That SOMETHING should be NOTHING! The problem isn’t that banks aren’t lending to each other, it’s that they aren’t lending to each other CHEAPLY! They are just fighting to keep the interest rates from rising! Let it operate as a free market or the bodies will really pile up later on! What trip is this to the taxpayer feeding trough? The $150B stimulus did nothing and it is gone! This is just another attempt to dress up the bad and they should just stay out of it and let the market work! I’m so sick and tired of them coming to my tax dollars for their mistakes! Let them fold!
What will happen if nothing is voted on: I will celebrate the fact that sanity has won the day.
What will happen if a bill is voted on and it does not pass: I will find out if my Senators and/or U.S. Representative voted “Yes” on the bill. If they did vote “Yes”, they will receive a letter saying that for those running in 2008 that I will vote against them in the upcoming election out of office (they have already been warned) with the goal of having them no longer being my Senator or U.S. Representative.
If a bill is passed, I will continue to protest as loudly as I can. It is completely unfair to our children (and the future generations unborn) that we are going to use public money for “saving” commercial enterprises that deserve to fail. (I put “saving” in quotes, because this is only the proverbial tip of the iceberg; I believe there are going to be more failures over the next 2-3 years but then again I don’t have a crystal ball.)
No! Don’t do ANYTHING!
Anytime the government intervenes, our money is spent in exchange for legislation that either has no significant effect (READ: several billion dollars worth of previous attempts at bailout) or worsens the situation.
Would you call that a good return on investment? If no one in the market is willing to buy the toxic sludge, why should we, the taxpayers, pony up to help Paulson and Bernanke’s banker buds out of the web in which THEY tangled themselves?
The time to stop this crisis was back in oh, say, 2004. But that would have meant stopping the money train for homeowners, builders, banks, cities, counties, states, and the Fed — something no politician or free marketeer would have wanted.
At least… not back then! But now, NOW, they ALL want the government to step in and save them from their own fatally poor-decision making processes.
Ladies and gentlemen, the milk has been spilt, the horse is out of the barn, and Elvis has left the building.
There’s nothing Congress can do to stanch the bleeding. It might temporarily slow, but it will resume once further financials are disclosed.
The American consumer is tapped out, gentlemen. Get used to it.
I, for one, refuse to subsidize a bailout for rich bankers that would not help the economy (that’s us, the little people) one tiny little bit.
And, as for you, financial writers, get a grip. The world as we know it IS coming to an end, but it’s not the end of the world. My hope is that our nation will become less a group of whiny, entitled, gotta-have-it-all-right-NOW!, me-firsters and get back to what made us great: sacrifice, hard work, and concern for our families and fellow man.
Nothing Congress can do will stop what’s just over the horizon from coming. And if you pretend that it will, you’re just deluding yourselves and lying to your readers.
I keep hearing that many banks have lots of cash they are hoarding. That can’t last long. They have to continue to pay interest on the cash or to have a return on their stockholders investment. They can do neither of these if the don’t make loans.
It is also not in Banks’ best interest to allow the financial system to “freeze up” or “melt down”, leading to a cataclysmic recession. They just need to go back to what they should have been doing all along. Do their due dilligence before they make a loan. Unfortunately all the exitement and anticipation created by The Bush aministration’s bail out proposal will only delay the time it takes for this to happen.
In the end the governance and management of US companies should go back to the old model, where their emphasis was on managing good companies that will continue to make reasonable profits well into the future. In recent years the emphasis has instead seemed to be managing the market price of their stock to make sure it increase by 10% every year.
exactly what should happen…a [supposedly] free market running its course. since when is the credit freeze the root of the problem anyway? the root of the problem is housing, plain and simple. however this root runs deep. underneath all this, is an ideology and way of thinking based upon greed, or at the least making money any way you can. that isn’t inheritantly a problem until you start to affect certain necessities of living- housing, energy, and food. until those things are balanced out, and which will take more than a bailout, there will be instability in the markets. if it persists, you will have social instability.
If banks made bad desicions because their greed got in the way too bad, let them go under! NOT with my tax money! Any electeted offical that votes for a ball out will get a vote from me to be OUT OF OFFICE!!!
Huh. It’s been a week now since Paulson delivered his ultimatum. The markets have corrected, LIBOR is going nuts and it’s a rainy day in Manhattan, but as far as I can tell the world didn’t actually end as threatened.
Huh.
Frankly, I am very happy with the last two days of “negotiations”. If this thing never passes and can’t get done, thanks goodness. This “bailout” will serve no one save Paulson and Bernanke. It is pure corporate socialism and will prolong the much needed correction. Just let the correction happen, get it over with and then be that much stronger for it.
I agree with James from New Orleans, instead of bailing out the money hormongers of Wall Street, lets help the Social security system, or help with madicare etc…something we can ALL benefit from. And second, I am always reading lately that if the “bailout” is not passed it will “freeze” lending. But the way I see it is that it will just make lending practices the way they should have been all along…..lend to those who are TRUELY qualified. Listen, if you know you can’t afford the payback payments, then you can’t have it. And if that means that some buiseness’s that are not credit worthy enough to get a loan then they need to either “better” their products or change the way they do buisness. And the same goes for home buyers, if you know you can’t afford the payments then “DON’T ASK FOR IT”. You know how much you can afford…live with in your means.
Paul, in the past few months you’ve assured us that everything is fine, there’s a “bubble in pessimism” and other gems. Now, Congress should do something? Are you trying to tell us things are not quite as fine as you thought? Please explain, I’m confused.
Far from perfect!? It’s 100% wrong!
I am a Democrat, but I support the ideas of the Republican holdouts who aren’t signing on to this ridiculous bailout.
Go John Boehner!!
What do you think will happen if no bailout package for banks is passed?
Answer: The Free Market would work as ordinary. Strongest banks win, weakest banks fail. So be it.
You “pro” bailout folks obviously are not thinking at all about future generations (you are actually stealing from them!!!). Makes me sick!
Us “anti” bailout folks understand that it is wrong to steal from future generations. And, time to realize “debt” is bad. And, time to tighten the belt so that future generation at least have a chance to prosper.
Do you think our founding fathers could ever imagine our country being in so much debt?
Sick…
The folks on Wall Street are real big fans of the “free market” so let them have a free market. No bailouts are necessary, let the market take its course. It’s time to stop handouts for corporations who don’t know how to manage their business.
I would rather have nothing than a bail out of Wall Street.
The type of bailout being forced down our throats is WRONG and WILL NOT HELP THE CORE ISSUE OF THE HOUSING CRISIS.
Congress needs to DO THEIR JOB and analyze the situation to come up with a COMPREHENSIVE PLAN that HELPS THE HOUSING CRISIS. It can be done in a month and DOESN’T NEED TO BE DONE THIS WEEK.
The fear is forcing bad decisions on the part of the Administration and Congress. Frankly, on the Republicans are being smart (and I’m a Democrat) by saying this isn’t the plan. We need something else and we have time to work it out.
Take action, but take the RIGHT ACTION after looking at all the options, not jumping on a knee-jerk fear response.
Some institutions will go bankrupt. Some jobs will be lost. Asset prices will decline. People will scoop up distressed assets (homes, bonds, stocks, companies) at a good price and the world will not end!
We will recover sooner if we let the market take its natural course.
No bail out!
What will happen you ask? For starters, Congress will be doing what the vast majority of us wants them to do.
NO MORE BAILOUTS!
It would be very painful for all of us, not only here in the U.S. but for people around the world, as our economy suffers its greatest decline since the Great Depression. Even so, I do not think it is right for the government to bail out these companies. Some would fail, others would survive and the opportunities created would allow new companies and people to benefit. $700biliion to bail out bad budiness practices is not the way to go, it will only allow some, mostly CEO types, to beleive the government will always bail them out when their greed bites them. Instead, use the money to save Social Security and Medicare. That money would go a long way to solving long term problems that will directly affect everyone in the U.S.
This writer opposes the bailout at least in anything like the form that has been discussed. The House Republicans are right to not be railroaded, and not throw out $700 billion just to do SOMETHING! ANYTHING! to appear to be pro-active. The performance of the markets leading up to this debacle does not make one confident they will not waste the $700 billion then come back later for a re-fill…
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We are America.
We spend all our savings to buy stuff.
When that is gone; we use credit to spend everything we believe we will earn in the next thirty years to buy more stuff.
Now that that is gone and we are left with debts that we can’t possibly pay back, the government wants us to spend our childrens and grandchildrens future earnings by putting $700B on the national credit card just so that people can buy more stuff.
I guess we can keep doing that forever; I mean who cares if we don’t pay anyone back….they’ll keep lending to us; right?