BAILOUT: Yes or No?

[Evil_Maniac From Mars]

And the money I still got on the market do not approve this chain of events

If you play your cards right, it can make you money in the long run.

[Koga No Goshi]

Yes but what about those 94 Democrats who voted against the bill? A higher percentage of Democratic Congressmen broke with their party and voted against the bill than Republicans who bucked their party and voted for it. Of those 94 votes the Democrats couldn't scratch out the 20 or so needed to pass the bill?

Thanks for that link referencing election year concerns. It should never come as a surprise when a politician puts re-election before principles (although, in this case many Republicans were actually voting for their traditional party principles as opposed to those who broke with the spending binges during the Bush administration).

I think we all need to keep in mind that this is not the Imperial Senate in Star Wars. This is one month out from a major election and Congressional offices have been flooded with furious letters and calls about the bailout-- there is NO major support from the public. The momentum among politicians, the President, and the business sector has ranged from "We HAVE to do something, NOW!" to "Sigh, I guess we have to do it or this will get much worse." From the public, the insistent attitude is more like oh hell no, let it all burn, I don't care if the market crashes more.

So, to simply call it the lack of kneecaps or leadership amongst the parties is a bit off mark. Politicians are always on the cautious side right before an election, true, but they are torn between being insisted upon that this will cause another great depression from the "experts" and business community on Wall Street, and the public on the other hand hopping mad. And I still have not heard from anyone (well, besides Bush) who even CLAIMS to understand this crisis, what the implications are, why the 700 billion figure was selected, how it would be used, or how it would prevent specific economic calamities. I think that's true for most of the people in Congress, too. It's just fear tactics on one side and angry public on the other. Unless they are getting VASTLY more detailed information and the media isn't bothering to share or report it, they're almost making a big decision in the dark. I don't blame them for wanting to wait and get both parties on board with one decision or the other-- if they vote no, and the doomsday people are correct, they will have just voted in the economic end of our country as we know it. If they vote yes, and the doomsday people were selfserving liars, they've just gutted the treasury and handed it away to thieves.

Easy decision? Maybe on a forum, with no real responsibility for how the decision turns out. :)

[cmacq]

I think we all need to keep in mind that this is not the Imperial Senate in Star Wars. This is one month out from a major election and Congressional offices have been flooded with furious letters and calls about the bailout-- there is NO major support from the public. The momentum among politicians, the President, and the business sector has ranged from "We HAVE to do something, NOW!" to "Sigh, I guess we have to do it or this will get much worse." From the public, the insistent attitude is more like oh hell no, let it all burn, I don't care if the market crashes more.

So, to simply call it the lack of kneecaps or leadership amongst the parties is a bit off mark. Politicians are always on the cautious side right before an election, true, but they are torn between being insisted upon that this will cause another great depression from the "experts" and business community on Wall Street, and the public on the other hand hopping mad. And I still have not heard from anyone (well, besides Bush) who even CLAIMS to understand this crisis, what the implications are, why the 700 billion figure was selected, how it would be used, or how it would prevent specific economic calamities. I think that's true for most of the people in Congress, too. It's just fear tactics on one side and angry public on the other. Unless they are getting VASTLY more detailed information and the media isn't bothering to share or report it, they're almost making a big decision in the dark. I don't blame them for wanting to wait and get both parties on board with one decision or the other-- if they vote no, and the doomsday people are correct, they will have just voted in the economic end of our country as we know it. If they vote yes, and the doomsday people were selfserving liars, they've just gutted the treasury and handed it away to thieves.

Easy decision? Maybe on a forum, with no real responsibility for how the decision turns out. :)

You really don't understand Americans, do you?

[Koga No Goshi]

You really don't understand Americans, do you?

Um? You mean, demanding and unreasonable and rapidly blanket-judgmental? :)

[seireikhaan]

Hmm...

I wonder if George is practicing his fiddle right now?

Jokes aside, I'm glad on a principal that this bill failed. Yeah, this(these) next few year(s) will undoubtedly be rough and will suck. But, America's gotten soft and credit-happy. We need to learn a lesson.

[Spino]

Leadership on both sides is severely lacking. The President, as one WaPo columnist recently stated, isn't a lame duck, he's a dead duck. Pelosi has been terrible as Speaker, the House Dems need to vote her off the island soon.

Not gonna happen... at least not until the mob feels the pain of this self inflicted wound that's about to gush red, white and blue all over the place.

You know, I get the feeling whomever is going to be in elected office over the next 4 years, regardless of their party affiliation, will wind up being some of the most unpopular and hated politicians this country has ever had. Obama might wind up winning the Presidency only to have his ego fueled pipe dreams of being beloved by the masses dashed by the seething hatred of the mob looking for an outlet for their frustration. It's going to get reeeeallly ugly.

[cmacq]

Hmm...

I wonder if George is practicing his fiddle right now?

Jokes aside, I'm glad on a principal that this bill failed. Yeah, this(these) next few year(s) will undoubtedly be rough and will suck. But, America's gotten soft and credit-happy. We need to learn a lesson.

Agreed.

[Koga No Goshi]

Not gonna happen... at least not until the mob feels the pain of this self inflicted wound that's about to gush red, white and blue all over the place.

You know, I get the feeling whomever is going to be in elected office over the next 4 years, regardless of their party affiliation, will wind up being some of the most unpopular and hated politicians this country has ever had. Obama might wind up winning the Presidency only to have his ego fueled pipe dreams of being beloved by the masses dashed by the seething hatred of the mob looking for an outlet for their frustration. It's going to get reeeeallly ugly.

This is because despite all the praise we Americans heap on ourselves, we don't actually believe we should ever have to sacrifice, ever. People complain about schools, but want tax cuts. Complain about crime, but want tax cuts. Want to go to war, but want tax cuts.

And, unfortunately, we've been fed the idea over the years that not only can we have our cake, eat it too, but then we can even start cannibalizing ourselves once the cake is gone and it will still taste just as good.

[Hosakawa Tito]

I am glad it was voted down. Hold these feet to the fire a bit longer. Don't believe for a minute that the Administration and pols from both parties didn't know this financial meltdown was coming; they were just hoping the didn't hit the fan till after the election. Now, in less than a week, they want to stampede us into a $700 billion bailout (where'd they pull that figure from?) with vague specifics and "promises to address...um later" the flaws in the system. Some of these corporate officers and the rating agencies who rated junk securities as AAA have colluded to commit fraud, while federal regulators have looked the other way or had their warnings suppressed. I want to see a perp walk. I want to see jail time for the worst offenders and fines + banishment from the financial industry for the others. And I want to see it before the taxpayer hands over a dime.

[drone]

And I still have not heard from anyone (well, besides Bush) who even CLAIMS to understand this crisis, what the implications are, why the 700 billion figure was selected, how it would be used, or how it would prevent specific economic calamities. I think that's true for most of the people in Congress, too.

IIRC, I think the $700b comes from the deficit cap limitation. Got raised to $1.5t recently, so it meshes with the current spending to get that number.

My rep (Republican) voted for it. Makes it easier to vote against him come November.

You know, I get the feeling whomever is going to be in elected office over the next 4 years, regardless of their party affiliation, will wind up being some of the most unpopular and hated politicians this country has ever had. Obama might wind up winning the Presidency only to have his ego fueled pipe dreams of being beloved by the masses dashed by the seething hatred of the mob looking for an outlet for their frustration. It's going to get reeeeallly ugly.

I think it's very early in this thread, but I said the same thing. This was before the current crash, but signs were there along with the mess in Iraq/Afghanistan. Whoever wins this is going to be a one termer. We had, what, 15 candidates at the start? All wanting the job of janitor.

[Koga No Goshi]

IIRC, I think the $700b comes from the deficit cap limitation. Got raised to $1.5t recently, so it meshes with the current spending to get that number.

My rep (Republican) voted for it. Makes it easier to vote against him come November.

I have heard from multiple sources that, when asked, Paulson's staff and such are admitting the number was just made up. They knew they needed a big amount and there is no guarantee they won't come back later asking for a trill.

[Ice]

Sorry if I missed anyone, but this post by Ironside was the most correct out of everything I've read so far:

As for the bailout, a reluctant yes, if done properly it would keep the economy up, mostly repay itself back and give the investors a nasty burn aswell

It's nice to see the usual partisan rhetoric going on in this thread and Congress. Instead of solving this in the least painful way and listen to the two men who actually know they are talking about, I have about -5% faith in Congress, what does Congress do? Bicker and Bicker and Bicker about stupid stuff that could wait. I'm going to have to agree with Tribesman that most, if not all politicians, are a waste of air.

While I can see the angle many of the absolute free marketers are getting out, theory and reality are two different things. Guys, this is bad. REAL BAD. If the FED hadn't take the appropriate steps already, this would have been a hell of a lot worse (think depression). I'm not going to put this country, 99% of which isn't responsible for this problem, to hell for a few years just to say I stood my ground.

Another issue is the bailout money. 700 billion is an estimation of the total bad debt that needs to be purchased from companies. This isn't set in stone, nor is will we simply add this debt to the national debt. Most of this debt, quite possibly could be recovered, so we are most likely looking at a much smaller number.

Sorry if this is a little vague, but I have had a really long day and decided to respond here as I consider this the most important thread quite possibly on this forum.

Likewise, apologies again if I sound arrogant, but I have a class entitled "Money and Banking" which deals with this three times a week for atleast an hour, not counting out of class work and discussion. This is also my professors field of specialty and he personally knows/communicates a few of the actual FED board members.

Edit: I forgot to add my opinion on investors. This "bailout" will still give investors a nasty burn. Most will only be able to recover a small amount of their portfolio. There are no free rides.

[Koga No Goshi]

Let me "put a face" on 700 billion for you. This is taken directly from Time Magazine, so those of you who are geekboys like me and read it might have seen this already.

What you could do with 700,000,000,000 dollars:

*Give every person in the United States $2,300.

*Pay the income taxes of every American who makes $500,000 per year or less.

*Fully fund the Defense, Treasury, Education, State, Veterans Affairs and Interior departments next year, as well as NASA.

*Buy gasoline for every car in the U.S. for 16 months.

*Buy every NFL, NBA and Major League Baseball team and build each one a new stadium - and pay your players $191 million apiece for a year.

*Create the 17th largest economy in the world, roughly equal to the Netherlands.

*Or, you could pay off 7% of the 9.8 trillion dollar national debt.

[Ice]

I am glad it was voted down. Hold these feet to the fire a bit longer. Don't believe for a minute that the Administration and pols from both parties didn't know this financial meltdown was coming; they were just hoping the didn't hit the fan till after the election. Now, in less than a week, they want to stampede us into a $700 billion bailout (where'd they pull that figure from?) with vague specifics and "promises to address...um later" the flaws in the system. Some of these corporate officers and the rating agencies who rated junk securities as AAA have colluded to commit fraud, while federal regulators have looked the other way or had their warnings suppressed. I want to see a perp walk. I want to see jail time for the worst offenders and fines + banishment from the financial industry for the others. And I want to see it before the taxpayer hands over a dime.

There will hearings, as the FBI is looking into the matter now, but such things take time. Taxpayer money wouldn't do much if we wait till next year to do anything.

This isn't actually the administration who put this together either. Ben Bernanke, the Chairman of the Federal Reserve Board of Governors, and the Treasury Secretary , both very smart men, put this together.

One last time for clarity: Although I disagree with most of you on what needs to be done, I do see your point of view. Just because I want a "Bailout" doesn't mean that I'm not pissed at these SOBS. There will be justice for most, but these things take time.

[Koga No Goshi]

While I can see the angle many of the absolute free marketers are getting out, theory and reality are two different things. Guys, this is bad. REAL BAD. If the FED hadn't take the appropriate steps already, this would have been a hell of a lot worse (think depression). I'm not going to put this country, 99% of which isn't responsible for this problem, to hell for a few years just to say I stood my ground.

I agree it probably has to be done. I'm digging in my feet and being stubborn, knowing that my personal opinion isn't going to change that something HAS to be done. And I actually do trust Congress, on the whole, to recognize that and act accordingly. But I think the partisanship comes in when people are trying to use this as a way to, yet again, sneak in provisions for no oversight, no regulation, no accountability, or corporate tax cuts (such as with the McCain alternative plan.) If this bill had gone through exactly as our President presented it and insisted it MUST pass, QUICKLY, with no add-on's, without oversight and regulation attached, there's no telling how this money would have been used and it would be too late to try to do something about it being misused. I don't think having serious concerns about DOING THIS RIGHT, rather than DOING THIS FAST, and not being billygoated into signing something too quick like with other bad big gubment interventions like the Patriot Act can, or should, be called partisan hackery.

[Caius]

Now, will the Gov save the people? or the market?

[Ice]

I agree it probably has to be done. I'm digging in my feet and being stubborn, knowing that my personal opinion isn't going to change that something HAS to be done. And I actually do trust Congress, on the whole, to recognize that and act accordingly. But I think the partisanship comes in when people are trying to use this as a way to, yet again, sneak in provisions for no oversight, no regulation, no accountability, or corporate tax cuts (such as with the McCain alternative plan.) If this bill had gone through exactly as our President presented it and insisted it MUST pass, QUICKLY, with no add-on's, without oversight and regulation attached, there's no telling how this money would have been used and it would be too late to try to do something about it being misused. I don't think having serious concerns about DOING THIS RIGHT, rather than DOING THIS FAST, and not being billygoated into signing something too quick like with other bad big gubment interventions like the Patriot Act can, or should, be called partisan hackery.

Doing right is doing it fast. The more time we waste bickering over stupid things, (exectitve compensation, in a 700 BILLION DOLLAR Bill), the faster we can start the recovery.

I'm amazed you actually trust Congress. Have you listened to a lot of what the big shots (speaker of the house, leader of the senate majority) sound like? They don't know their *** from their face. There is a reason why Bernanke and Paulson made the bill a page and half long.

[Ice]

Now, will the Gov save the people? or the market?

In this case, both.

[Koga No Goshi]

Doing right is doing it fast. The more time we waste bickering over stupid things, (exectitve compensation, in a 700 BILLION DOLLAR Bill), the faster we can start the recovery.

I'm amazed you actually trust Congress. Have you listened to a lot of what the big shots (speaker of the house, leader of the senate majority) sound like? They don't know their *** from their face. There is a reason why Bernanke and Paulson made the bill a page and half long.

I trust Congress on the whole to recognize that something must be done and act accordingly. The fact that SOME form of bill WAS going to be passed has been an almost foregone conclusion since day one, whereas if public sentiment had its way this thing would be dead, dead, dead. So that puts Congress at the very least ahead of the general public, in this case, doesn't it?

[Crazed Rabbit]

Welcome to the club, like that hasn't been par for course for the past 8 years. And you need to get your facts straight, it's Bush and McCain trying to shove through a bailout, and the reason one wasn't passed last week was the Republican holdouts. Now it looks like (because of popular sentiment) both parties are having trouble getting a majority on board, either way. So we can drop the Republican persecution complex.

I need to get my facts straight? Where did I say Bush and McCain haven't been pushing the bailout?

And as I said; Democrats have a majority. Minority Republican holdouts were trivial to passing the bill last week.

It didn't pass because 40% of dems voted against it. I wasn't complaining of 'Republican persecution' but of incessant democratic evasion of responsibility.

Sorry, Kush, but I'm still not convinced. There's a lot of good arguments to be made against the bill from what I've read (on realclearmarkets.com ).

CR

[Ice]

I trust Congress on the whole to recognize that something must be done and act accordingly. The fact that SOME form of bill WAS going to be passed has been an almost foregone conclusion since day one, whereas if public sentiment had its way this thing would be dead, dead, dead. So that puts Congress at the very least ahead of the general public, in this case, doesn't it?

Considering the bill failed due to partisan reasons, no it doesn't.

BTW, this is funny. I just caught Pelosi, speaker of the house, on tv addressing the House. She blames this all on the republicans, which is HILARIOUS due to the fact that this was a combination of FED policy, democratic policy, and republican policy. This is why I hate politicians with an utter passion.

She then goes on to talk about what great credentials Paulson has along with Bernanke. She calls Bernanke an expert on the Great Depression, which closely resembles what is going on now, but then wonders why the bill drafted by the two gives sole power to them to deal with the crisis and any extra money. It honestly boggles the mind. She is a idiot.

[Ice]

Sorry, Kush, but I'm still not convinced. There's a lot of good arguments to be made against the bill from what I've read (on realclearmarkets.com ).

CR

I'd like to see some if you wouldn't mind posting. Like I've repeatably said, I can see where you guys are coming from, but when the you have banks failing and freezing up liquidity, you have major problems. Does anyone enjoy paying 20% interest on a loan? I know I don't. Hey, who needs cash for college? I'm currently paying an absurd premium on my students loans due to this. What about a new mortgage?

[seireikhaan]

Considering the bill failed due to partisan reasons, no it doesn't.

BTW, this is funny. I just caught Pelosi, speaker of the house, on tv addressing the House. She blames this all on the republicans, which is HILARIOUS due to the fact that this was a combination of FED policy, democratic policy, and republican policy. This is why I hate politicians with an utter passion.

She then goes on to talk about what great credentials Paulson has along with Bernanke. She calls Bernanke an expert on the Great Depression, which closely resembles what is going on now, but then wonders why the bill drafted by the two gives sole power to them to deal with the crisis and any extra money. It honestly boggles the mind. She is a idiot.

Exactly why America needs a purging. In a democracy, change must come from the bottom up, from the people. Perhaps if this crisis rocks us enough, we'll wake up not just to meet our own financial responsibilities, but also stop having such apathy over our political situation.

[GeneralHankerchief]

I trust Congress on the whole to recognize that something must be done and act accordingly. The fact that SOME form of bill WAS going to be passed has been an almost foregone conclusion since day one, whereas if public sentiment had its way this thing would be dead, dead, dead. So that puts Congress at the very least ahead of the general public, in this case, doesn't it?

If the public wants it dead, dead, dead, who is Congress to deny them?

[Evil_Maniac From Mars]

Exactly why America needs a purging. In a democracy, change must come from the bottom up, from the people. Perhaps if this crisis rocks us enough, we'll wake up not just to meet our own financial responsibilities, but also stop having such apathy over our political situation.

Ban the Democratic Party and Republican Party and force them to create completely new ones. Something like that.

[seireikhaan]

Ban the Democratic Party and Republican Party and force them to create completely new ones. Something like that.

Wow, way to totally misrepresent my statement. Good job.

[Koga No Goshi]

If the public wants it dead, dead, dead, who is Congress to deny them?

Well that's why we're in a you-can't-win. Both Republicans and Democrats are voting against the first couple variants of the bailout in sufficient numbers to stop passage. And that is most certainly in some part because of re-election considerations and public sentiment. I do not believe that the original bill should have been passed as-is. If it had, and that unaccountable money had gone poof, everyone would be blaming the "Democratic congress" anyway, even though a bailout has been high pressured by both McCain and Bush. It's funny that many of you seem quick to condemn that people in Congress seemed as concerned with how they'll come out in the "blame game" when this is said and done, as what's best for the country, and then quickly render your own blame judgments. Congress is never perfect but I think what we have is a result of a) our system and b) the passive aggressive moods of the voters.

I am not sure expecting better than what you're seeing is rational, given the way our system works, and given the way people cast votes. Especially in the House, where all representation is very local and each of those people is there representing a narrow slice of the constituency. I'm horrified by a lot of Bible Belt congresspeople like Coburn but I have no say in him keeping or losing his seat.

Edit: Err Colburn might be Senate? Still the same situation though, no say in his seat. ;)

[Ice]

Exactly why America needs a purging. In a democracy, change must come from the bottom up, from the people. Perhaps if this crisis rocks us enough, we'll wake up not just to meet our own financial responsibilities, but also stop having such apathy over our political situation.

They aren't apathetic, just idiotic. This is why you leave stuff like this to the Federal Reserve and Treasury Security. I mean they do this stuff for a living and are very well educated in current and past economics situations and principles. The Fed has come a very long way dealing with these kinds of crises.

[Evil_Maniac From Mars]

Wow, way to totally misrepresent my statement. Good job.

You might say that what I said was an exaggeration, but honestly, I think it would probably be a good idea to get rid of the two-party system in America, however that is achieved. I wasn't trying to misrepresent your statement - in fact, I largely agree with it.

[Xiahou]

I'm currently of the opinion that we're basically screwed either way. We can print 700 billion dollars and have all the problems associated with that, just to get the credit machine running again- the same one that got us into this mess in the first place. Wealthy corrupt businesses will get big fat bailouts from their wealthy corrupt patrons in congress and maybe the unsustainable system can trundle on for a few more years. What's solved then? If we don't do anything we're probably heading for a serious recession. Both options stink, but right now I lean towards letting "nature" run its course.