So the original bailout of $700 Billion - with a B - did not pass. So what do our lawmakers do to pass this urgent, critical bill that will save Western Civiliazation?
Add $100 Billion of additional pork to the bill.
Again, I'd like to be convinced of the urgent need for this legislation - and Micah's post and a phone call from my brother-in-law is helping - but it is so hard to take it seriously when the government treats this like any other omnibus pork project.
10 comments:
That's not pork, those are just "sweeteners". You know, bribes. Oh, you don't want to vote for our bill? Well, here's millions in Federal funds for your state. NOW do you like our bill? *wink wink*
I know this might be naive again, but if I make bad investments, will someone come out and buy them off of me? But I'm not asking for a handout or bailout, but I have a liquidity issue.
Jesus, let them suffer. They got in over their head, abused the system, realized that the "bailout" won't get passed and now are insulting the american people for not understanding.
Will it be tougher to get credit? Yes. Good. Shouldn't you only loan out to people with good credit? Duh?
And once again if this is such an urgent matter, then where are the politicians convincing the american people on this. Barney Frank is actually doing more harm than good, and everyone else I have heard talk about this doesn't understand this.
And Micah, quite frankly you are not making a good case either. You want us to take on bad investments from companys that got leveraged so badly so that there will be liquidity in the market. This is a bailout.
If someone can convince me, I'm all for it.
I'm with layup on this one. Homeowners made bad decisions like taking on mortgages they couldn't pay, but they got no bailout. They started losing their homes to foreclosure. These banking companies made bad decisions and now they should suffer the consequences of those decisions. Yes, it will make things tougher for everyone in the short-term, but in the long-term it will allow the market to correct itself and provide a more stable basis to move forward.
I don't see the big problem with a "credit crisis". To me that seems to mean that people will no longer be able to borrow obscene amounts of money that they are unable to pay back. People will have a harder time living beyond their means. These are good things. Yes, maybe some people will have to trade in that Mercedes for a Honda. Maybe they'll need to get out of their 20,000 sq ft McMansion and move into a townhome. These are probably things they should have done a long time ago anyway.
And it looks like the bill passed the house this time. Good to know that our congressmen can be convinced to pass a bill they don't agree with (and most of their constituents don't seem to agree with) just by adding some pork.
When does the revolution start?
So I admit that I hate this plan as much as everyone else here, but in reading some of the recent posts it amazes me how the focus is solely on how this would affect the type of people on this blog - mainly middle to upper class financially who have decent long term savings to weather the impending storm. Yes, we're all going to have to cut back, and for some that might mean downgrading cars, putting off electronics purchases, or reevaluating the neighborhoods that we can afford to purchase homes in. This is a good thing-it’s long past due that people stop using credit to live beyond their means.
But, I have to wonder how this is going to affect people who are already cutting back and who live within their means. These people have not seen their salaries increase in years. Yet, gas, healthcare, groceries, utilities etc have gone up. It's hard to find an extra $300 a month if you just don't have it.
What are the choices for this family? Cut back on the unnecessary, clip coupons, shop around for the best deals—Walmart, thrift stores maybe. PB&J for dinner instead of chicken. Look for a higher paying job (good luck in this job market). Maybe they've tried looking for cheaper home, but can't get approved for a loan. More likely, the value of their home has dropped so much that they’re stuck where they're at because they can’t make up the difference between what the home would sell for and what they owe. All it takes is one unexpected expense (broken washing machine, kid chips a tooth, etc) to throw their budget completely out of whack. Forget about sending the kids to college.
The thing is that these families have ALREADY been cutting back for the last year or so, since the gas prices went up. They just can’t shoulder the effects of this crisis if the government waits for the market to correct itself. What responsibility does the government have to the millions of families in this position? Some say none. But, these families did nothing wrong. Are we really ready for soup lines again in this country??
Now, it's great to say that we should punish "wall street" for their stupid actions. And, it's not fair that so many people took out loans for things that they couldn't afford and we're going to get stuck with the bill. But, “wall street” isn’t who’s going to be punished-it’s the families I described above. Who is "wall street", really? Maybe the 1000 or so CEOs in charge of the failing companies? How will they be punished by this? They're already stinking rich and will likely find other jobs. Maybe they won’t get huge multi-million dollar payments from these failing banks. Great. They can still go out to eat. They can still send their kids to college. They can still go on vacations.
And most of the people who took out stupid loans have probably already lost their homes by now, which is punishment enough in my book. Yes, some might be saved by this plan, but honestly I can’t worry about them.
But, what about those less fortunate? What about the employees at these companies that are now unemployed? What about their kids? Do they deserve the punishment as well, simply to make a point that these CEO's don't deserve their payoff? Simply to cling to the belief that the market will correct itself?
And what about us middle to upper class folks? Think about how much your stocks have tanked since last year. Now, imagine them either losing more ground or not gaining for the next 10 years. Where does that put you for retirement? How does that affect your plans for buying a new home? For the middle class, it's not just a matter of cutting back--it's bordering on a total change of lifestyle. Are you willing to give up your way of life, simply to make a point? When looking at the alternative, I simply don't think that asking each man woman and child to pay $2K to get out of this mess is all that bad in the long run. It definitely stings, but I can’t even imagine what it would cost if nothing is done.
I’m stepping down from my soapbox now…
You ask how this will effect families that are already cutting back and that live within their means. If they're actually living within their means, then shouldn't they already have some long-term savings to rely on to weather the storm?
Living within your means doesn't just mean don't pile up credit card debt. It means spend less than you earn so you can save some. The people that have actually been doing that will be okay. I'm not saying it will be fun, but if you are actually living within your means then you have some savings to rely on. If you don't have savings to rely on then you haven't been living within your means and you are part of the problem.
Laura:
You make some good points about the lower middle class, but please.......reconcile your own thinking.
"it’s long past due that people stop using credit to live beyond their means."
and then later:
"For the middle class, it's not just a matter of cutting back--it's bordering on a total change of lifestyle. "
The savings rate in this country is negative. This will force people to save more money and not live outside the means.
And the stock market is going down? Horrors! It's down a whole 20%!!!! I'm sorry, where in the constitution is it written that:
"a. Every American citizen has the right to earn 10% annually in the stock market, or else they can beat up the nearest Jim Cramer look alike"
When you invest, you take risks. The stock market is a risk.
Not all investments are bad. People who invested in gold 5 years ago are pretty damn happy right now. Same with people in CDs.
There is no inalienable right we have about an increase stock market.
"My 401k is going down!" So - are you saying it is the FEDERAL GOVERNMENT's responsibility to prop up the stock market?
I’m still so mad I can’t see straight.
Someone, anyone, explain WHEN the Government is going to get serious about…
a) a balanced budget
b) reducing the deficit
You are fooling yourself if you think the Maverick or the Muslim is going to change anything. Bloomberg has to be kicking himself for not entering this race. This is the crisis that would have put him over the top.
They can’t touch social security or defense or negotiate drug prices for medicare/medicaid or TOY WOODEN ARROWS or RUM.
So, to answer laurad’s question YES, what the HELL is in it for me. I want my cut. I’m getting screwed on both ends.
Heard a GREAT news story on NBC Nightly news. A local car dealership was complaining that people with bad credit were getting loans at a rate of 20%, whereas a year a go it was 60%, and its killing his business. Seriously?!?! I can’t take it.
So here is my new plan. You’re all gonna think I’m crazy right now, but just wait. You will eventually see the light.
I call it the $20 Trillion deficit plan. Let’s get there as fast as possible so we can set a new goal at 40T, and so on. Addicts don’t seek help until they hit rock bottom. Same applies to the Government.
My basic premise here is that I will be alive whenever the HUGE correction occurs. I don’t want this to happen when I’m 80 or 90, I’d rather it occur right now so the Nation can recover and I can recover while I’m at the peak of my productive years. I’ll admit I’m being selfish here. Hey, just call me an American.
We can all preach about the individuals living within their means, but the good ol’ USA Government ain’t doing it. That bill will come due some day.
So everybody here seems to be on Stages 2 (denial) and 3 (anger) in the 6 step process of reacting to change. I think I've moved on to step 4, passive acceptance, and I'm looking for ways to convince myself that I can live with this deal that they've signed.
I guess where I'm at right now is that things are so FUBAR that I can't get caught up in the fact that some idiot fat cats and dumb investors are going to benefit from this plan. All I need to know is that I'M going to benefit from this plan.
Not that it's much of an issue now that the plan has been passed, but everyone against this plan should ask themselves the following questions: (1) How much are you personally willing to lose in an effort to preserve the idea of a free market? and (2) Could you and your family survive if you lost your job and were out of work for 6-12 months?
Personally, I don't really want to give up much. I don't live on credit. I have 6 months savings. I'm working towards a nice retirement. I like my neighborhood, home and job. Why the hell do I want to give any of this up in an effort to make sure that some CEOs don't get bought out? F*** them. Actually, maybe I'm still in the denial phase myself...
I've never even met laurad, and usually I couldn't disagree more with her, but she's making the most sense here.
We're all angry, and I love the free market, but how far are you willing to go to prove your point. I've been looking for a job for months. It's not fun...
I think all the pork is ridiculous. That's another debate entirely, but this is unfortunately the quickest way to help resolve this problem. And I don't mean giving more credit to people that don't deserve it. I'm talking about business spending, small & large. Without it, our economy will not grow, and people will lose jobs, and this tailspin will continue for another decade. I'd love to hear a better alternative, but frankly there isn't one.
As far as the stock market goes, no it's not your right to earn 10% every year, but if the market performs poorly, and everyone buys debt instruments instead like CD's, they'll drive the yield down so low that you might, if you're lucky, just keep up with inflation...and retire when your 80. How's that sound?
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