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View Full Version : OT: Do You Have Any Confidence in Bailouts?


Arielluria
10-08-2008, 09:23 AM
Regardless of political affiliation I keep hearing that most Americans have been against bailouts, and yet our so-called Government - who is supposed to represent US, keeps going against our wishes.

Considering what REAL financial experts are saying against it, and the Government's record, do you have any confidence in bailouts OR them?

Please.........Let's try to keep political views and the upcoming elections out of this discussion, I'm not trying to be divisive, I'm strictly talking financial situation here. :waving:

Knitting_Guy
10-08-2008, 09:30 AM
It would actually be a great deal cheaper to just give every taxpayer one million dollars to be used to pay off their debts. Problem solved and would save billions of tax dollars in the process.

suzeeq
10-08-2008, 09:54 AM
Well that would be nice, but most people don't have a million dollars in debt. And I don't think that would solve the major problems.

miccisue
10-08-2008, 10:24 AM
This is funny, but I got an email the other day - might google it and see if the "Birk financial plan" or something similar comes up.

It was tongue in cheek, but it honestly did make sense. It was started with the first 85 bil that was given to AIG, so it didn't include the later 850 bil that most people think of as the "bailout".

Anyway, this person figured that there were roughly 301 million Americans 18 and above. Dividing the 85 bil between them came out to roughly $495,000/each. So we give each American adult 18+ their $495,000. Then they said "but wait, there's taxes" so they proposed taxing it at 30%, and keeping that amount in the US Treasury. It still ended up to being something like $247,500/person. Then they said....and what would people do with that? Pay for college, spend it, save it for retirement, etc, etc......whichever way they used it, it showed how it would get the economy moving.

Sounds great to me!!!!!!!!!!!!!!!:cheering: (Too bad it'll never happen)

Knitting_Guy
10-08-2008, 10:42 AM
Well that would be nice, but most people don't have a million dollars in debt. And I don't think that would solve the major problems.
Quite true, they don't. But by the time they paid off their debts and spent the balance (or put it into savings) the economy would be moving again and the banks would have a strong influx of cash.

As for it solving the major problems, the major problem being discussed is bad debt and it would certainly solve that. Backing it up with strong legislation that flatly outlaws the kind of mortgage packaging/trading that got us into this mess would handle the rest.

As for the "bailout", I would go along with it if they included a clause that requires the CEO and Board of Directors of any company or institution that accepts the money to spend 5 years in a Federal prison.

stitchwitch
10-08-2008, 11:08 AM
This is funny, but I got an email the other day - might google it and see if the "Birk financial plan" or something similar comes up.

It was tongue in cheek, but it honestly did make sense. It was started with the first 85 bil that was given to AIG, so it didn't include the later 850 bil that most people think of as the "bailout".

Anyway, this person figured that there were roughly 301 million Americans 18 and above. Dividing the 85 bil between them came out to roughly $495,000/each. So we give each American adult 18+ their $495,000. Then they said "but wait, there's taxes" so they proposed taxing it at 30%, and keeping that amount in the US Treasury. It still ended up to being something like $247,500/person. Then they said....and what would people do with that? Pay for college, spend it, save it for retirement, etc, etc......whichever way they used it, it showed how it would get the economy moving.

Sounds great to me!!!!!!!!!!!!!!!:cheering: (Too bad it'll never happen)
I don't know what kind of calculator that guy is using but I need one if $85 bil divided by 301 million comes out to that! :roflhard:

Arielluria
10-08-2008, 11:17 AM
What really gets me is that the financial institutions and the Government who induced said institutions to give out loans to people who couldn't afford them, are getting bailed out..........while people like me and my husband who were responsible borrowers (i.e. we accepted only a THIRD of the equity loan mortgage which the bank was willing to give us, who did NOT get a house until we could secure a decent FIXED RATE mortgage, etc.) are going to be penalized by paying for the ones who unfortunately should have had to save a little more and wait a little longer (as we did) before they could afford a house.

I agree with Mason, jail time should definitely be figured into this!

Most importantly, Where is the penalization for those institutions who did the IRRESPONSIBLE LENDING?!? A borrower who was talked into getting a 110% loan on their $200K home, who now owes something like $190K on a house they now couldn't sell for $115K??????????? That's insane! I feel for someone in this situation, but again, you have to go back to personal responsibility. Not only to borrow what you can afford but also to get financial information/guidance from an unbiased 3rd party as to whether this was a good idea!

The lenders just sold them a bunch of bull and they were stupid enough to buy into it! All parties fictitiously assuming the property values would only go up!!!!!!!!!!!!! :wall: I'd say this falls under deceptive lending practices, which is, I believe a Federal crime!

I think a recession or depression is going to happen anyway (regardless of bailouts), and I think it speaks volumes to see that most Americans are FOR that as a correction to our markets rather than a badly thought out, badly managed bailout of banks in the guises of saving our economy.

suzeeq
10-08-2008, 11:25 AM
I don't know what kind of calculator that guy is using but I need one if $85 bil divided by 301 million comes out to that!

You would only be counting Americans over 18, and I think she was talking about the 850 billion figure.

Arielluria
10-08-2008, 11:52 AM
So we give each American adult 18+ their $495,000. Then they said "but wait, there's taxes" so they proposed taxing it at 30%, and keeping that amount in the US Treasury. It still ended up to being something like $247,500/person. Then they said....and what would people do with that? Pay for college, spend it, save it for retirement, etc, etc......whichever way they used it, it showed how it would get the economy moving.

Sounds great to me!!!!!!!!!!!!!!!:cheering: (Too bad it'll never happen)
You're right, it would never happen, and I willt ell you why!!!!!!!!! Because then the banks would be out all that exorbitant interest since we would all pay off our mortgages, or most of it!!!!!!!!!!!!!!!!! AND Americans might learn to live without debt, by saving and buying only what they had the CASH for, which in return would make the banks lose their grip around the throats of the populace!

Arielluria
10-08-2008, 11:56 AM
What gets me the most is that Americans aren't as stupid as the Government thinks we are! When they pull a bone-headed move like the bailouts it proves it, because the people are saying "NO!" but they are voting otherwise!

I found my copy of the U.S. Constitution yesterday. It was given to me when I became an American citizen, but of course never read it. I have an overwhelming urge to read it now! ........ Because I know this country is a Republic, not a Democracy and in so being our representatives are SUPPOSED to do what WE say, not what THEY want! Doesn't that constitute treason?!?

stitchwitch
10-08-2008, 12:04 PM
Come on people, you all aren't that stupid. Do the math, divide 850,000,000,000.00 by 301,000,000.00. It is not in the hundreds of thousands of dollars, it's $2823.92.

Arielluria
10-08-2008, 12:16 PM
Let's just call it wishful thinking ;):lol:
I see I'm not the only math-challenged person in the world.:teehee:

stitchwitch
10-08-2008, 12:28 PM
Unfortunately, that's the same crapped out math people were using to get their home loans. "Let's see, I make 25K a year, add a few years together and I'll have made 400K. Yeah, I can afford it, I'll probably get a raise soon anyway!!!"

miccisue
10-08-2008, 02:44 PM
OK, OK....I admit it - I didn't do the math. (Apparently I'm one of those that isn't smarter than that)

Still, I think the person who did it (correct math or not) is pretty clever to come up with the "Because We Deserve It" fund. Math errors aside, I gotta admit whoever wrote this is pretty sharp in their knowledge of people and what they're feeling.

I mean, it's obvious with the "Because We Deserve It" in the fund name it's not real.....but it's how a lot of us feel.

JustAFloridaGirl
10-08-2008, 04:37 PM
Besides the fact that the math is wrong, the "financial plan" of giving every adult in America hundreds of thousands of dollars would never work for the simple fact of inflation. If everyone had that kind of money you'd soon be paying ten or twenty bucks just for a candy bar.

Anyways, I think the bailout was stupid. First off, it's obviously not helped restore Wall St., because it's still struggling. Second off, my husband and I can't afford to go get a mortgage and buy our own house right now, why should my taxes go to bailing out the banks and people who were stupid enough to think an adjustable rate mortgage was a good idea?

And finally, we're obviously in for a bumpy ride with the economy for a while to come regardless...I'd rather have seen the current banks fail and have the new generation of banks correct their practices than see the current banks get bailed out and continue on with the same policies and tricks they've been using that got us into this mess to begin with.

nbrome
10-08-2008, 04:45 PM
What gets me the most is that
I found my copy of the U.S. Constitution yesterday. It was given to me when I became an American citizen, but of course never read it. I have an overwhelming urge to read it now! ........ Because I know this country is a Republic, not a Democracy and in so being our representatives are SUPPOSED to do what WE say, not what THEY want! Doesn't that constitute treason?!?

I've seen this republic/democracy thing on this site before and I must say I don't understand it. Surely a republic is a form of government and democracy is an idea. So you can have a republic which is democratic or autocratic, you can have a monarchy which is democratic etc etc.
Why do you say your country is not a democracy?
Why is the US famously exporting democracy to the world?

zkimom
10-08-2008, 05:30 PM
It would actually be a great deal cheaper to just give every taxpayer one million dollars to be used to pay off their debts. Problem solved and would save billions of tax dollars in the process.

My dh said exactly the same thing!

Jan in CA
10-08-2008, 05:45 PM
My dh said exactly the same thing!

:roflhard: So did mine!

mwhite
10-08-2008, 05:49 PM
And aren't the only ones benefiting from this bail out, the ones that made faulty loans on faulty credit in the first place? No offense but I hoped that the bail out would be denied so that FINALLY, the government would come to terms with some of its problems!!!

scout52
10-08-2008, 06:02 PM
There are regular people that work at these companies not just CEOs. The support staff had NOTHING to do with the what happened. The bailout helps these people keep their jobs and pay their bills.

Just trying to help show the larger picture. The whole company was not evil. The whole company was not just involved shady lending.

miccisue
10-08-2008, 07:32 PM
I've seen this republic/democracy thing on this site before and I must say I don't understand it. Surely a republic is a form of government and democracy is an idea. So you can have a republic which is democratic or autocratic, you can have a monarchy which is democratic etc etc.
Why do you say your country is not a democracy?
Why is the US famously exporting democracy to the world?

When you say the US is famously exporting democracy to the world, what I interpret that to mean is that they are trying to give the power of government to the people - not a king, not a dictator, not a religious group, etc.

The USA, though, IS a Republic, NOT a Democracy. The basic difference between the two is that in a Democracy, it is, simply put, majority rules....there is NO protection for the individual or for those in the minority. Under a Republic, the individual and/or those in the minority can not have their rights trampled on simply because the Majority thinks it should be that way.

It would probably be best if you Googled "Republic or Democracy", where the two are compared side by side and you can see the differences.

Thanks for asking the question....it reminds me that there are things I need to brush up on (it's been a long time since high school US History!!) to open my eyes to things that are being thrown around, laws people are trying to pass that don't meet the right criteria (and I mean in my state, too, not just nationally), and be a watchdog for it.

rachael72knitter
10-08-2008, 07:51 PM
This is funny, but I got an email the other day - might google it and see if the "Birk financial plan" or something similar comes up.

It was tongue in cheek, but it honestly did make sense. It was started with the first 85 bil that was given to AIG, so it didn't include the later 850 bil that most people think of as the "bailout".

Anyway, this person figured that there were roughly 301 million Americans 18 and above. Dividing the 85 bil between them came out to roughly $495,000/each. So we give each American adult 18+ their $495,000. Then they said "but wait, there's taxes" so they proposed taxing it at 30%, and keeping that amount in the US Treasury. It still ended up to being something like $247,500/person. Then they said....and what would people do with that? Pay for college, spend it, save it for retirement, etc, etc......whichever way they used it, it showed how it would get the economy moving.

Sounds great to me!!!!!!!!!!!!!!!:cheering: (Too bad it'll never happen)

Something is fishy with that math. 301 million divided into 85 billion does not come out to 495,000 each.

I got that e-mail too, and the math, it came out to 425.00 and not 425,000.00

It just struck me as incorrect math.

bailsmom
10-08-2008, 08:12 PM
I think this is all a bunch of BUNK!!! They should not have bailed out anyone. They should have let everyone fall on their faces and suffer through a 'depression' as so many people like to call it. They recovered from the last one, we'd recover from this one too. All they got was a slap on the wrist and they'll just keep on doing what they've been doing and do it again and again and again.

Shame on anyone who signed those mortgage papers knowing full well they wouldn't be able to pay the bill when it went up. And if you don't know that 'Adjustable' means it will go up and down then you shouldn't be buying a car let alone a home.

We would have loved to buy our first home within the last few years but we have the sense to know that we just couldn't swing it then, we can now, but now since we were the responsible adults we get screwed for how long now?? Months? Years? Until we can get a decent loan. It's completely unfair that the responsible people have to suffer right along with the idiots and crooks. And when I say idiots, I mean the morons who bought a house they couldn't afford and when I say crooks, I mean the morons who sold them the loan.
This really sucks. :hair:

P.S. Did you see on Yahoo's front page about AIG? Seems some of their employees went on a nice $400,000 retreat. And then of course they tried to justify it. It's crap. You see, it'll never end.

http://news.yahoo.com/s/ap/20081008/ap_on_bi_ge/fed_aig

scout52
10-08-2008, 08:16 PM
The United States is Constitutional Federal Republic based on Representative Democracy.

There are 3 levels of government Federal. State and Local. Some people pay more taxes than others depending on where they live because some states do not have state income tax. We have Federal tax. Some states have higher sales taxes. We have federal laws and state laws. Federal law trumps state law.

brendajos
10-08-2008, 09:34 PM
Come on people, you all aren't that stupid. Do the math, divide 850,000,000,000.00 by 301,000,000.00. It is not in the hundreds of thousands of dollars, it's $2823.92.

:doh:
unnecessarily rude

brendajos
10-08-2008, 09:41 PM
What struck me as funny was that some local business people got together right after the bailout was signed to say how great this was. They were banks, of course, real estate agents, car dealerships, etc. They finished their press conference with the suggestion that people go shopping, because they had money to give away now.

Reporter asked if they really thought it was a good idea to tell people to start borrowing money again when the bailout had just passed (seriously, it was within minutes.) The car dealer said "of course... we are a credit driven society." :wall:

Knitting_Guy
10-08-2008, 09:49 PM
I would love to see the "credit society" crumble and die. It really is insane.

We've had the bronze age, and iron age, will this be thought of by future historians as the credit age?

mwhite
10-08-2008, 09:53 PM
There are regular people that work at these companies not just CEOs. The support staff had NOTHING to do with the what happened. The bailout helps these people keep their jobs and pay their bills.

Just trying to help show the larger picture. The whole company was not evil. The whole company was not just involved shady lending.

Understood! But the ones at fault SHOULD be held reponsible!

nbrome
10-09-2008, 02:05 AM
When you say the US is famously exporting democracy to the world, what I interpret that to mean is that they are trying to give the power of government to the people - not a king, not a dictator, not a religious group, etc.

The USA, though, IS a Republic, NOT a Democracy. The basic difference between the two is that in a Democracy, it is, simply put, majority rules....there is NO protection for the individual or for those in the minority. Under a Republic, the individual and/or those in the minority can not have their rights trampled on simply because the Majority thinks it should be that way.

It would probably be best if you Googled "Republic or Democracy", where the two are compared side by side and you can see the differences.

.

Sorry, it's still not clear. I have also Googled it!
Scout says the US is a republic based on democratic representation. That makes sense, because it's a form of government based on a certain idea.
So why is the US not a democracy?
The UK has a Queen but it is a parliamentary democracy. I've never noticed that the rights of the individual or minorities are trampled on there - or at least let's say any more than they are trampled on in many countries.
Also, if you don't have majority rule what is the point of counting votes?

scout52
10-09-2008, 03:18 AM
Sorry, it's still not clear. I have also Googled it!
Scout says the US is a republic based on democratic representation. That makes sense, because it's a form of government based on a certain idea.
So why is the US not a democracy?
The UK has a Queen but it is a parliamentary democracy. I've never noticed that the rights of the individual or minorities are trampled on there - or at least let's say any more than they are trampled on in many countries.
Also, if you don't have majority rule what is the point of counting votes?


The Fourteenth Amendment of the Constitution is the Equal Protection Clause which guarantees the civil rights of the people of the United States. That amendment is to ensure that there is no tyranny of the majority. In the federal government and the state government there is 3 tiers-executive, legislative, and judicial. That serves as the checks and balance system also to ensure that the rights of the people are heard.

We are a democracy but a representative democracy. We vote for a representative to legislate for us. We are a republic in that we have states that are governed by their own local laws but are unified by a constitution and are ultimately governed by the president, the legislative branch (the senate and the house of representatives) and judicial branch.

Does that make more sense?

nbrome
10-09-2008, 11:28 AM
Yes, it does.
Actually, it's not that I don't know what a republic is. It's just that I've been struck more than once by posters on here saying that the US is NOT a democracy. Couldn't get my head round that. I'm happy with "We are a democracy but a representative democracy". Seems to me you can put all the adjectives you want in front of it but it's still a democracy.

scout52
10-09-2008, 01:48 PM
Yes, it does.
Actually, it's not that I don't know what a republic is. It's just that I've been struck more than once by posters on here saying that the US is NOT a democracy. Couldn't get my head round that. I'm happy with "We are a democracy but a representative democracy". Seems to me you can put all the adjectives you want in front of it but it's still a democracy.

Glad to help.

It confuses plenty of Americans so don't worry. People get confused on the republic and/or representative part, but yep still a democracy.

If I remember correctly Italy is parliamentary democracy correct?

Arielluria
10-09-2008, 02:33 PM
I'm glad you were here to explain it much better than I could! ;)

ladyjessica
10-09-2008, 02:39 PM
As for the "bailout", I would go along with it if they included a clause that requires the CEO and Board of Directors of any company or institution that accepts the money to spend 5 years in a Federal prison.

I was talking about this with my dad last night. He said they'd send someone to prison for stealing food for their kids, but these CEOs are going on luxury retreats instead of being held accountable in any way and paying for what they've done to this country.

I would be all for the bailout if it were our money to give, not other countries', and if it actually did something to help people like me.

scout52
10-09-2008, 02:42 PM
You're Welcome. I had great political science and civics teachers. I always loved history. I had a teacher you would give the students actual memorabilia from each era that we were studing to KEEP. It was a great way get the students involved. I still have each one. :)

miccisue
10-09-2008, 07:44 PM
I found this very interesting reading on the republic vs. democracy topic.
www.devvy.com/pdf/larosa/larosa_democracy_or_republic.pdf (http://www.devvy.com/pdf/larosa/larosa_democracy_or_republic.pdf)

nbrome
10-10-2008, 02:24 AM
Glad to help. .

If I remember correctly Italy is parliamentary democracy correct?

Italy is a republic and a parliamentary democracy. The UK is a constitutional monarchy and a parliamentary democracy.
One of the main differences between the parliamentary system and yours is that there is no separation of legislature and executive. This might have some disadvantages but on the whole I think there are more advantages.

Mike
10-10-2008, 08:24 AM
I didn't read through the whole thread to see if this was mentioned, but the bail out as passed was unconstitutional and every Yes vote from the Senate needs to be thrown in prison.

Traditionally spending bills have to originate in the House.
Specifically, "All bills for raising Revenue shall originate in the House".
The Senate can only initiate amendments to spending bills.

The Senate bill does speak of raising the revenue for the spending. Since they're the ones who started what was passed it is against the law.

iza
10-10-2008, 09:38 AM
Italy is a republic and a parliamentary democracy. The UK is a constitutional monarchy and a parliamentary democracy.
One of the main differences between the parliamentary system and yours is that there is no separation of legislature and executive. This might have some disadvantages but on the whole I think there are more advantages.

Thanks for your question, nbrome. And thanks scout for your explanations. Iran and China call themselves republics and they don't seem to protect their minorities that much, so I was confused too. :shrug: So what I understand is that the protection of minorities come from the constitution. And you can have a constitution without a republic (like Canada). It's the implementation that's important.

nbrome
10-10-2008, 10:19 AM
so what I understand is that the protection of minorities come from the constitution. And you can have a constitution without a republic (like Canada). It's the implementation that's important.


Sorry to confuse you again iza, but the UK has no written constitution!

iza
10-10-2008, 10:29 AM
:teehee: Yes, I know the UK doesn't have a written constitution, the same way Canada and the US do. But from what I understand, there are constitutional principles clearly identified in various documentations, isn't it true?

scout52
10-10-2008, 01:40 PM
Thanks for your question, nbrome. And thanks scout for your explanations. Iran and China call themselves republics and they don't seem to protect their minorities that much, so I was confused too. :shrug: So what I understand is that the protection of minorities come from the constitution. And you can have a constitution without a republic (like Canada). It's the implementation that's important.


the meaning of a republic is a country with states/provinces or the like that are unified under 1 executive and legislative body but also have their own local laws.

Iran and China are republic because they have provinces unified under the one leader (President for Iran and President for China) but are both countries are well know for lack of human rights. A republic can be restrictive of human rights.

Ironically before the overthrow of the Shah in 1979 in Iran, it was one of the most progressive Middle Eastern countries, women were in government, teachers, did not wear the scarf if they didn't want to, religious freedom was great there.

Arielluria
10-13-2008, 12:18 PM
I heard Steve Forbes today say he though this bailout was a good measure. That aside......let's ASSUME he's correct...............since the government can't handle the buckets of money they already have, can't handle social security, or allow US to invest it if we so choose.............how can they be trusted with more financial responsibility?!?!?

You want to talk collapse? Look at social security. If they handle banks as well we'll have financial collapse for sure. Then again, I'm not sure that's not the plan of some.

Thanks for all your input! It will take a while to see the final fallout for sure!