OT: Do You Have Any Confidence in Bailouts?

#1

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:

#2

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.

#3

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.

#4

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)

#5

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.

#6

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:

#7

What really gets me is that the financial institutions [U]and[/U] 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.

#8

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.

#9

You’re right, it would [U]never[/U] 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!

#10

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?!?

#11

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.

#12

Let’s just call it wishful thinking ;):lol:
I see I’m not the only math-challenged person in the world.:teehee:

#13

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!!!”

#14

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.

#15

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.

#16

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?

#17

My dh said exactly the same thing!

#18

:roflhard: So did mine!

#19

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!!!

#20

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.