The Truth About The Bailout
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Man if you’ve been watching the news, you know what’s happening. It makes me so sad to look at my 401K. Good thing I’m young!
September Madness chart by Techcrunch - this is funny…it’s modeled after the march madness basketball brackets but is replaced with banks and government. The taxpayer isn’t on there…I guess that means there’s no way we’re going to win no matter what they do. bah!
Peter Schiff, economic adviser to Ron Paul predicts the economic situation we’re in now while the other guests on the show laugh at him. Btw, it was recorded less than 2 years ago.
I know the average american doesn’t understand what’s happening. It just looks like we’re bailing out these rich bankers from their mistakes but there is a bigger problem here.
Here is a great comment that I read on another blog that explains it pretty well for all of the naysayers:
The rest of you seem to think that because you have been responsible, you’ll be OK no matter what. So you are suggesting doing exactly what was done in 1929 — let investors lose their money and banks fail. You are essentially saying that Hoover policy - drive all the “rottenness out of the system” was correct even though most analysts agree that this is what caused The Great Depression. It took over 20 years, all the way to the 50s for the market to reach the same level it was at in 1929. Just the same level, no gain. Or have you all sold your stock two years ago? Do you think your job is secure and immune to this crisis?
I heard an old commentator on TV tell “when the market crashed in 1929, my father said ‘it serves them right’. A year later he had to close his business”. This is exactly what you are saying. Well, I hope a year from now you aren’t going to lose your job.
Even if you don’t work for banks, you are likely to be affected. Your company needs credit too. Oh yes, I know, according to some of you nobody is supposed to use credit. So do you think the companies shall just keep piles of cash lying in a vault earning nothing or just have it broken up in nice chunks of under 100K in multiple banks? No business can afford to do that. The cash is invested in the business. When a business needs to pay your salary it takes short term loans, then when it gets its revenue, it pays the money back. Without loans all business except for maybe some large cash-rich corporations (like the one I work for) can survive. But these corporation may be producing products that banks used to buy e.g. computers or furniture…. Without banks buying it, these companies will suffer to, laying off people and adding to unemployment. Currently there is almost total credit freeze - nobody lends money to anybody else. Many smaller businesses are having pretty hard time - businesses that had nothing to do with real estate or mortgages.
I also just love this “There is no reason to believe that these companies will change their ways”. What exactly is a company? Is it a single monolith? Is it one person? What percentage of the employees of any of these companies were involved in this type of decisions? Is a teller at a bank responsible? How about a database administrator? A network administrator? A computer programmer? Or a secretary to some manager? Think about thousands of people that were employed by some of these companies. How many of them do you think actually made the decisions that got us into this mess?
You are willing to “punish” thousands, maybe millions of people so that a few of those can “learn a lesson”? Newsflash. Those responsible for this crisis have already made millions and probably can retire nicely. You, on the other hands, may lose your jobs because the company you work for may have trouble getting credit it needs. Or because with so many unemployed people, there will be not many left who can afford to buy its products. Then you may have trouble finding another one because there are so many unemployed people around.
Oh right, all of these people were supposed to save money. Enough to live in for a few years of unemployment. What about young people? Those who graduated a year or two ago and still have student loans? They’ll be unemployed too.
Incidentally, unemployed people don’t pay taxes. What exactly do you think will happen with government budget with so many unemployed people? And how do you think FDIC will be handling bank failures after it runs out of reserves? Print more money? Here we go.
What about the real estate market? With the credit freeze as it is now, it’ll be extremely difficult to take mortgages. It already is. So the prices will fall. Good, right? Except for it’ll cause more foreclosures and more bank failures.
As Foobarista has already pointed out, the Great Depression had other effects as well. It spread to other countries. One of the countries it hit the hardest was Germany. Remember what happened next? Hungry people are ready to elect any charismatic leader who promises to feed them. Has anybody here ever experienced real hunger?
Yes Preston, your IDEALS are great - let thousands, maybe millions suffer just so we can punish a few wrong-doers. Are you sure you will not be affected?
- made by a person named Kitty (she did not leave a website or contact info)
