The Bailout Bill

[Pedersen]

Damn. This has now become law. The US Government just bought $700,000,000,000 of bad debt. This means that every man, woman, and child in the country now is responsible for an additional $2,333.

This sucks. I can find no good thing to come out of this. If the homes were being foreclosed before this, then the buyer has already shown that they won't make sufficient payments. As a result, the government now has to arbitrarily set these people's interest rates low enough they can make the payments.

What happens when a number of those people either can't or won't make payments? Their homes still get foreclosed. Which the government now gets to sell at firesale prices. Which kills the value of the homes around them, which means that people in those homes get screwed twice: Once because they are now responsible (as a household) for somewhere between $5,000 and $10,000 of debt that they did not incur, and a second time because the value of their home just took a nose dive that they could not do anything about.

The people who run the banks that made the bad loans win. The politicians win, since they get look like they did something. Everybody else? Here, enjoy your 20 grit sandpaper covered coatrack up the ass.

Disgusting.

[Greenday]

The bailout actually makes sense though...from an assbackwards sort of way. So let's see. If you are responsible with your money...you get a lot of debt. But those in debt are getting helped. Awesome.

[MadMike]

Honestly, I don't know what to think here. On one hand, it pisses me off that these rich corporate assholes get to fuck up, and the government comes in and rescues them. If I fuck up, or even if shit happens thru no fault of my own, no one's coming to rescue me.

On the other hand, what if what they're saying is true -- that if we don't bail out these losers, it will hurt everyone? My gut tells me that it sounds like someone's yelling "The sky is falling!", but what if it's true?

I'm torn here. When it wasn't being passed, I got worried. But now that it is getting passed, I'm pissed.

[Boozy]

Unfortunately, the bailout is absolutely necessary, and thankfully it was passed sooner rather than later.

I suppose a few weeks ago,, there were a few other options. A few years ago, there were thousands of other options. But we are where we are, and this is the last resort.

It leaves a bad taste in my mouth, too, and as a Canadian, it's not even my money. It's just too bad things got to this point.

[tropicsgoddess]

I don't like the fact that the bailout bill was passed at all. The US is already in a huge national deficit and debt from the war, plus there's the $85 billion dollar bailout loan to AIG insurance and other big expenditures the Bush Administration have made. I really don't think anything good will come out of the $700 billion dollar bailout except more taxes and grief for tax payers.

[Fashion Lad!]

The people who run the banks that made the bad loans win. The politicians win, since they get look like they did something. Everybody else? Here, enjoy your 20 grit sandpaper covered coatrack up the ass.

Disgusting.

I do not think the politicians win in this at all. For most of the people that voted for the bill, their constituents were very much so opposed to the bill. So, them winning?.. No.

We needed to bailout Wall Street to help Main Street. In this bill, they will be working to get people into reasonable loans so that no more people lose their houses. Also,there will be stricter regulations on these financial institutions. Yes, it will cost us money. But, we're supposed to get it back.

Am I pissed that greedy, irresponsible CEOs got us into this mess? You bet I am.

Do I realize this is for the greater good? I do. Just remember, if our economy collapses, we take the world down with us. Everything is so intertwined that we will hurt other countries if we fail.

[AFPheonix]

I'm hoping at least in the long run we as taxpayers will earn some dividends in the investments we just made to at least pay ourselves back, but I'm not holding my breath.
I don't like that we had to do it, I'm glad that the bill was revisited, and I'm glad that FDIC insurance was bumped up because that absolutely does protect small business owners, but ugh. That's a lot of money. To be fair to Congress, the last time we had a bad go on Wall street they did nothing and we ended up with the Great Crash leading to the Great Depression. So at least they didn't sit on their hands this time around.

[Boozy]

I think US taxpayers will get some back on their investment. I can't imagine there's profit to be had, but I would be absolutely floored if the bill actually ended up costing you guys the full $700 billion.

This is just a bubble that got out of control, because of hundreds of factors like the trade deficit, the move away from a production economy, poor regulation, globalism, and low interest rates following 9/11. The perfect storm. But it's important to recognize that the market has seen bubbles before, it hurts when they burst, and the markets recover. When they do, taxpayers will get something back.

[Slytovhand]

Just remember, if our economy collapses, we take the world down with us. Everything is so intertwined that we will hurt other countries if we fail.

hahahahahahaahahaha.... sorry FashionLad, but I had to...

No, the only way that 'we take the world down with us' is if someone gets really angry and starts nuking the rest of the planet.

Sure, it might hurt a few places (some countries wont' even notice, tbh), but the world's economy doesn't revolve around 1 nation. I think everyone has realised this for quite a while. Every country goes through repressions and depressions periodically - so we're all used to having to work around them - by going elsewhere.

What is going to hurt the US in a big way, is all those heavy traders that change their base currency away from US dollars to the Euro... cos that's where the US actually makes most of it's money. When people stop trading in dollars, there's a whole stack of foreign currency transaction fees that America won't get. Sure, it's not something that immediately affects mum and dad, but since it means the banks and other brokers lose out, they'll feel that one pretty bad later.

The other countries, such as China as the best example, will have plenty of trading partners to go other countries, and vice versa (which is a large reason why the US government paid out stacks of subsidies and imposed tarriffs. The US has pushed out other traders (such as Australia) from various countries for years... those will dry up and so those countries will turn elsewhere.

Sorry Fashionlad, but the US's massive loss will be other countries gain. One country? Singapore. They now own a few of your banks...

[Greenday]

It is a trend, though, that a good portion of the world hurts when something bad happens to the American economy.

I happened to read an article the other day about how because of the American economy decreasing, less and less illegal immigrants are crossing the border. So I guess the economy getting worse wasn't COMPLETELY bad...

[Slytovhand]

It is a trend, though, that a good portion of the world hurts when something bad happens to the American any 1st world country'seconomy.

Edited for accuracy.

[protege]

Am I pissed that greedy, irresponsible CEOs got us into this mess? You bet I am.

Why isn't the government going after those assholes? They fucked up, get got millions (billions?)...even as their companies were failing? How the hell does that work? I mean, if I fuck up at work, cost the company a fair amount, do I even still have my job? Hell no...I'd get tossed out into the street. So why were those assholes allowed to claim bonuses?

However, quite a bit of blame can be placed on the feds for this one. Why?

1. Those companies were allowed to get too big for their own good. Don't we have antitrust laws about this? (And before everyone starts blaming Bush, these firms were already huge before he became President.) Years ago, AT&T was split up for the same reasons...

2. There were no regulations in place to prohibit or reduce sub-prime lending. I can understand that they wanted to move lower-income people into their own homes, but without regulations in place, it was only a matter of time before it failed.

3. There were no regulations in place to make it harder to get credit. I don't know about the rest of you, but it bugs me to see ads with "buy this crap, no credit required" and then hear of the company getting into trouble. Also, I get about a dozen credit applications *per day* in the mail.

I think it's going to get worse before it gets better. The market is going to adjust to the conditions (it's done some of that already) as the bailout plans are implemented, and as weaker players get taken out of the market.

[MadMike]

Years ago, AT&T was split up for the same reasons...

And interestingly enough, they've been slowly coming back together over the years.

I guess when you're a big business, you get to do whatever the fuck you want.

[Pedersen]

Now, here's what I've been wondering, but not gotten an answer to:

Why?

I've not heard one compelling argument that says that the banks should have been artificially propped up.

I have, however, read one story that made my blood boil. I do not remember the woman's name, but I'm sure someone will provide it for me. 90 years old, and tried to commit suicide when the bank was foreclosing on her home. Normally, I'd feel upset that this would happen to someone of such advanced age.

And then I read about the mortgage itself. It was obtained by her in 2004. A 30 year mortgage was issued to a person who was no younger than 85. This means the debt would not be repaid before the person turned 115. Some banker looked at this person and said "Good credit risk! I gotta give this person some money!"

And this person's story is being used as an example of why the nation has to bail out these banks? I would expect that the nation's lawmakers would at least share whatever the hell it is that they're smoking so that we can think this is a good idea, too. Quite frankly, the banks that are willing to issue loans like that deserve to go under.

There's probably an aspect that I'm missing. Please, somebody tell me why the entire country should be paying these buffoons so much more money?

[AFPheonix]

Because while we don't like it, we still need credit to function. When banks don't feel comfortable enough to lend, then companies cannot get money to, say, meet payroll and then you and I are screwed come payday. That's one reason for you.