700 Billion...Quite a number. What does this mean? A dollar is 6.14 inches long. One million dollars laid out is 96 miles long. One Billion is 96906.57 miles long, enough to circle the earth 3.8 times. How about 700 Billion laid out? It would circle the earth 2713 times.
More facts, analysis, and a poll bellow. Read it and 'get smart'.
The money for the bail out is being used to buy the "notes" for "subprime mortgages." This works much like insurance for the lenders: if you make a bad investment, "we got your back". The "we" is the USA government, financed by ‘we the people,’ some time off in the future... for now—the money is being created.
The hope is that this will allow banks to "feel confident" and keep on making loans (aka, "avoid a credit freeze"). AKA keep things going as before; AKA continue on as before.
It is a hope, but one that is not even prudent to hope. The economy can not be healthy if things continue as before with the credit and lending on which the US economy has (unwisely) become based. This is a lot like a junkie hoping for a fix, but there is no way around living through withdrawal effects if things are going to ever get better. What is needed is some tightening of the credit market. To satve this off is a fool's game. Like a junkie, giving a massive fix may stave off the sickness for a few days, but doesn’t help in the big picture. I am a professor at a Midwestern college, and some days there are three or more tables offering college freshman sparkly credit cards with low introductory rates and a free Frsibee/T-shirt/candy bar to apply. College students should not be offered credit cards in this way. Businesses should not operate and make payroll on revolving loans. And mortgage companies should not buy mortgages that have a poor chance of being paid off. If the banks who made the loans had not been able to sell them along on down the road -– they wouldn’t have been telling those who make $40,000 a year to, "go ahead, the market is good, buy a house for 200,000, Here’s how I can help you move in." The families were told the payments would be XX amount for 2 years, than would go up, but they could then refinance at that point to a lower payment based on the house having appreciated and them having instant equity. Insuring this practice ("we got your back"), for the bank lenders and big mortgage companies is distasteful on so many levels....
- It is financially stupid.
Manufacturing money at this rate lowers the value of the dollar. Helps exporting business and everyone else suffers.
Carefully looking at the stock market behavior in response to the ups and downs of the Bail Out Package does not fit the story we have been told. Some stock holder have taken Econ 101 and worry about manufactured money. See dow jones by the hour .
- Morally, it is mean and unfair.
To reward predatory lending (‘Here, let me get that for you’) of the big players who make hundreds of millions a year devising ways to exploit the hopes and dreams of those who struggle to make $40,000 is bad enough. But not to pair the bail out on the mortgage lending side this with changes in the bankruptcy law for the home owner side (those losing their place of residence) is approaching evil. If you are going to outright buy the amount of the loan – but no benefit to the ones living in the house at all.. Wow. Bottom line, the minimum for any elected official representing us would be to allow make sure jusdeg can adjust the amount owed by the homeowners so their payments return to the original amount. Gives me the creeps to ponder the inequity of it all.
- It makes the home owners in effect doubly responsible for their mortgage.
These home owners must pay the high mortgage of a house they bought at a price it was never worth, and now that the price has dropped, they can’t sell it and ocme out anywhere newar even... so they work two and three jobs and devote 70% of their income to house payment. THEN, because of THIS BAILOUT, they will eventually be paying for the bail out as tax payers (see first paragraph).
Congress-- you lost me, you lost my faith in your good judgment. This is the second time my elected officials have believed the Bush administrations abject fear mongering into doing something stupid. Yes, the recessison is here and will worsen almost certainly.... States will need money from the federal government, unemployed will need work or hand outs to live.... It is such a shame that my democratic leaders trusted some "experts" and did not trust other "experts" who said this bail out was not smart for many reasons—and that they did not learn from past mistakes (Iraq) not to trust Bush and Experts. Leaders are elected to think for themselves and represent the people – here you did neither. It is not thinking for yourself to repeat "the market dropped 770 points after the surprise decision to not pass the Bail Out" last Monday. LOOK at the day’s trading hour by hour. It is not accurate that it dropped 770 points after the news... but I keep hearing my officials say this. Are they sheep repeating what their master has told them without bothering to check? (and a 7% drop is quite small by the stock Markey history, as an aside).
How many bridges won’t be repaired? How many city sewer systems won’t be properly maintained? How many dads won’t get the surgery they need because we can’t afford national health care? How many CEO’s just got a helping hand they so badly need? How much will the dollar drop next week? ECON 101 : a dropping dollar is bad for the economy.... It leads to inflation. The advantage it gives to US based corporations who sell overseas will be of small comfort to those truggling to buy a gallon of gas and a loaf of bread... totaling 12.00 after they lose their job... but then.... You canhelp them too my wise elected offocials (in this representative democracy that works so well when he have bright reprentatives
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