Налогоплательщики будут платить

[Prickol]

Налогоплательщики которые не покупали квартиры которые не смогли бы аффордить теперь будут платить за безответственных хоумбайерс?
http://biz.yahoo.com/ap/080919/financial_meltdown.html

[darkie]

А мне показалось что государство будет этаким "collections agency", т.е. долги-то оно перекупит у банков. А вот платить безответственным все равно придется.

[Iv7]

Pravil'no. Nu a chto ne smozhet sobrat' i/ili ugovorit' creditorov prostit', to budut platit' nalogoplatel'schiki.

[Нюша]

Налогоплательщики которые не покупали квартиры которые не смогли бы аффордить теперь будут платить за безответственных хоумбайерс?
http://biz.yahoo.com/ap/080919/financial_meltdown.html


This is ridiculous! I am outraged! The gov't has no business rescuing anything!

500 billion dollars? Yeah...the debt is already 9.5B, why not make it an even 10B! :mafia:

Why should tax payers be saving companies that made poor choices? I say, let the stock market crash and let home prices get back to normal!

Plus, by interfering, the government is messing with a finely tuned mechanism. You don't know how things will be altered. It's like if you go back in time and accidentally step on a bug, you might come back to a different world! Same here....the gov't has to place bailing out companies.

[Нюша]

On a slightly different topic...I had a thought....There are 300,000,000 people living legally in the US. The national debt is about 10B dollars. What if...

All the people in the US chipped in (minus the very poor and the very young - 100,000,000 people) and tried to pay down the debt. How much would it be?


$10B divided by 200mil people = $50 per person.

I would be willing to pay $50 during the next April 15. I mean if you owe 5,000, for example, would it really make a difference if you owe 5,050?

And what would be the macroeconomic effects of that? Money supply would shrink, so consumption would fall...but people would make that up with credit cards. Ok, granted, there will be a bit of downturn, but the country would be debt free and its security would be better off because we won't have hotile nations owning our bonds!

What other effects would there be - positive or negative?

Is this feaseable?

[Нюша]

n a change from the original proposal sent to Capitol Hill (http://search.politico.com/results.cfm?subject=Capitol+Hill), foreign-based banks with big U.S. operations could qualify for the Treasury Department (http://search.politico.com/results.cfm?subject=U.S.+Department+of+the+Treasur y)’s mortgage bailout, according to the fine print of an administration statement Saturday night.

The rest of the article - http://www.politico.com/news/stories/0908/13690.html

So now, we are bailing out the foreign banks too.
The theory, according to a participant in the negotiations, is that if the goal is to solve a liquidity crisis, it makes no sense to exclude banks that do a lot of lending in the United States (http://search.politico.com/results.cfm?subject=United+States).

[baraban]

On a slightly different topic...I had a thought....There are 300,000,000 people living legally in the US. The national debt is about 10B dollars. What if...

All the people in the US chipped in (minus the very poor and the very young - 100,000,000 people) and tried to pay down the debt. How much would it be?


$10B divided by 200mil people = $50 per person.

I would be willing to pay $50 during the next April 15. I mean if you owe 5,000, for example, would it really make a difference if you owe 5,050?

And what would be the macroeconomic effects of that? Money supply would shrink, so consumption would fall...but people would make that up with credit cards. Ok, granted, there will be a bit of downturn, but the country would be debt free and its security would be better off because we won't have hotile nations owning our bonds!

What other effects would there be - positive or negative?

Is this feaseable?

The deficit is going to go up to $11.3 Trillion (not billion) post this bailout. I believe that works out to $38k per person ($97k per household). Would you like to pay that come April 15th? Would you like to also have retirement assets wiped out, companies out of business, people out of jobs and revolting and government unable to keep civil order? That's pretty much the alternative we are talking about here!

[Nucking Futs]

The deficit is going to go up to $11.3 Trillion (not billion) post this bailout. I believe that works out to $38k per person ($97k per household). Would you like to pay that come April 15th? Would you like to also have retirement assets wiped out, companies out of business, people out of jobs and revolting and government unable to keep civil order? That's pretty much the alternative we are talking about here!

I would suggest the Bush family to take care of the national debt, he inherited a surplus from Clinton and look where we're at now 8 years later.

Our retirements won't be wiped out simply because all those funds are FDIC insured. If you have more than the 100% coverage limit, I think it's $100K and under, it's time to disperse them over several accounts. Make sure your accounts are FDIC insured though.

Majority of the companies that are failing right now are financial institutions. Good riddance for all I care, they have noone else to blame but themselves for causing this situation. Of course, there's a domino effect of other non-financial businesses failing which is unfortunate, but hey, it's a side effect of a recession in the capitalist economy.

People won't be revolting. Even during the Great Depression times when the unemployment rate reached nearly 30% in the worst years, there was no major civil unrest. There were much worse battles with the authority during the workers' rights movement and emergence of the unions the the early 1900's. And even if the unemployment does hit some staggering high number, it'll time to implement something similar to the Rosevelt's Great Deal to use cheap labor to repair highways and roads, and build a couple of more bridges accross the Bay.

[baraban]

I would suggest the Bush family to take care of the national debt, he inherited a surplus from Clinton and look where we're at now 8 years later.

Our retirements won't be wiped out simply because all those funds are FDIC insured. If you have more than the 100% coverage limit, I think it's $100K and under, it's time to disperse them over several accounts. Make sure your accounts are FDIC insured though.

Majority of the companies that are failing right now are financial institutions. Good riddance for all I care, they have noone else to blame but themselves for causing this situation. Of course, there's a domino effect of other non-financial businesses failing which is unfortunate, but hey, it's a side effect of a recession in the capitalist economy.

People won't be revolting. Even during the Great Depression times when the unemployment rate reached nearly 30% in the worst years, there was no major civil unrest. There were much worse battles with the authority during the workers' rights movement and emergence of the unions the the early 1900's. And even if the unemployment does hit some staggering high number, it'll time to implement something similar to the Rosevelt's Great Deal to use cheap labor to repair highways and roads, and build a couple of more bridges accross the Bay.

That's great, but a bit out of touch with reality on a few very important points:

1. Under Clinton we had a current accounts surplus, not a budget surplus. That is, under Clinton the deficit was decreasing, while under Bush it is increasing. But it was still a deficit - $3.4 trillion in 2000 to be exact.

2. FDIC does not have nearly enough funds to pay off all the obligation under the massive failure scenario. Following the IndyMac collapse, they had already slipped below the regulatory requirement of 1.15 cents for every dollar of insured deposits.

3. Most of the baby boomers who saved for retirement have their IRAs and 401k plans invested in the markets, even if it is money market mutual funds. Many of these funds hold corporate bonds with the highest ratings. However, under an implosion scenario, these bonds loose ratings and value very quickly. Some institutions even had the foresight to insure their bonds with the best insurance companies, but these insurance contracts sometimes got sold to other holders, without permission. And even the best insurers would likely go out of business. So, we are talking about a total financial collapse here.

4. Leading up to the Great Depression the personal savings rate in the US was not negative like it is now; federal budget deficit was tiny compared to what it is now; population was much younger; people lived after retiring much less; worker skill set was manual labor and production concentrated and etc.

So, think about all that carefully, compare against Japan crisis of the 90s, while you are at it, as well...

[Нюша]

The deficit is going to go up to $11.3 Trillion (not billion) post this bailout. I believe that works out to $38k per person ($97k per household). Would you like to pay that come April 15th? Would you like to also have retirement assets wiped out, companies out of business, people out of jobs and revolting and government unable to keep civil order? That's pretty much the alternative we are talking about here!

Geez - you are right! I feel really silly! I knew it was trillion...but somehow it turned into billions :( My bad!

I definitely do NOT want to pay 50K come April 15!

[Нюша]

1. Under Clinton we had a current accounts surplus, not a budget surplus. That is, under Clinton the deficit was decreasing, while under Bush it is increasing. But it was still a deficit - $3.4 trillion in 2000 to be exact.


OMG - is that true? I mean I knew we increased that debt but I never knew exactly by how much! Baraban - are you sure of this number?

If this is true, I am just dumb-struck. I didn't think I could be angrier at Bush, but I am! WOW.

How do you ran up a $7TR tab in just 8 years? How is that even possible? And how is it that we don't have rampant inflation if an extra 7TR dollars was spent? Granted....not all of it was spent in the US, but still....:hairy:

[zavulon]

This is ridiculous! I am outraged! The gov't has no business rescuing anything!

500 billion dollars? Yeah...the debt is already 9.5B, why not make it an even 10B! :mafia:

Why should tax payers be saving companies that made poor choices? I say, let the stock market crash and let home prices get back to normal!


Well, they kinda have to. In order to avoid the all bank crash like Black Tuesday in 1929 they had to step in. Yes, the companies made poor (if not to say stupid or criminal choices) but if they are not helped we'll all suffer even worse. I actually heard somewhere on the news that they are planning to get these money back from the banks one day.

[baraban]

OMG - is that true? I mean I knew we increased that debt but I never knew exactly by how much! Baraban - are you sure of this number?

If this is true, I am just dumb-struck. I didn't think I could be angrier at Bush, but I am! WOW.

How do you ran up a $7TR tab in just 8 years? How is that even possible? And how is it that we don't have rampant inflation if an extra 7TR dollars was spent? Granted....not all of it was spent in the US, but still....:hairy:

Yes, by the time it is all said and done, Bush JR's administration will have increased our budget deficit by $8 trillion in 8 years.

We did have rampant inflation over this time period, but it is not reflected by the official numbers, because that is not how they are calculated. For example, retail price of potatoes doubled in just the past year, so did the price of apples and many other foodstuffs. Price of wheat went up by 350% in less than three years (peaking earlier this year), before settling back down at double it's long time average. Wholesale price of unleaded gasoline went up by a factor of 7 from their low in 2001, before coming down to current levels, which are still 5 times the 2001 lows. On the other hand, median house prices only went up 60% from 2000 to their peak year of 2006.

[Nucking Futs]

That's great, but a bit out of touch with reality on a few very important points:

1. Under Clinton we had a current accounts surplus, not a budget surplus. That is, under Clinton the deficit was decreasing, while under Bush it is increasing. But it was still a deficit - $3.4 trillion in 2000 to be exact.

2. FDIC does not have nearly enough funds to pay off all the obligation under the massive failure scenario. Following the IndyMac collapse, they had already slipped below the regulatory requirement of 1.15 cents for every dollar of insured deposits.

3. Most of the baby boomers who saved for retirement have their IRAs and 401k plans invested in the markets, even if it is money market mutual funds. Many of these funds hold corporate bonds with the highest ratings. However, under an implosion scenario, these bonds loose ratings and value very quickly. Some institutions even had the foresight to insure their bonds with the best insurance companies, but these insurance contracts sometimes got sold to other holders, without permission. And even the best insurers would likely go out of business. So, we are talking about a total financial collapse here.

4. Leading up to the Great Depression the personal savings rate in the US was not negative like it is now; federal budget deficit was tiny compared to what it is now; population was much younger; people lived after retiring much less; worker skill set was manual labor and production concentrated and etc.

So, think about all that carefully, compare against Japan crisis of the 90s, while you are at it, as well...

Trust me, man, when it comes down to paying off to customers of failed banks, the government will pull the troops out of Iraq in a day and sell half of its arsenal just to make sure FDIC will have enough funds. It will also do anything and everything to make sure people don't panic and liquidate their savings because, well, let's face it, there's not enough money in the treasury. If the the Congress hasn't extended the default limit several times in a row already, the government would've filed for Chapter 7 by now.

I don't know much about IRA's and what options it gives, but every 401K has some sort of "stable investment" option. It doesn't return much (if anything at all) but at least you're sure your savings don't evaporate when the market crashes.

And no, the end of the world is not coming this time 'round. Despite all the bleak prognoses, the market will recover just like it did 6 year ago, 16 years ago, 26 years ago.... The difference between the Great Depression and now are firstly regulations that didn't exist back then and, secondly, the nature of the market. This time only a portion is afflicted - the financial industry. High-tech, for instance, is doing quite well.

[baraban]

I don't know much about IRA's and what options it gives, but every 401K has some sort of "stable investment" option. It doesn't return much (if anything at all) but at least you're sure your savings don't evaporate when the market crashes.


You do, of course, realize that the "stable value" investment options you are talking about are either money market or insurance company products. So, think about what that means for a second... if the government does not do something, they would almost certainly loose value. The government will not do the "right" thing (as usual), but they will do something, so Armageddon will get postponed once again.