Discussions on the new bailout bill

[smockers83]

I'm still trying to figure out how spending millions on condoms is going to stimulate the economy.......I would have much respect for Obama if he stepped in to try and remove all the pork.

Most of the problem with low-income people is that they have too many kids. If they had less kids, they could maybe bring themselves out of poverty or raise their income either by delaying having kids or just having less. This would provide more money for themselves to better themselves and allow them to focus on that. It would also allow them to focus on quality of kids, not quantity. Parents living in dire situations tend to have more kids because the rate of survival is smaller, which kind of puts them into a poverty trap.

It wouldn't stimulate the economy immediately, but the economics of population tells us what I was trying to describe. Instead of spending time with kids, they could be out and about with a job and spending money. It would, over time, bring up the bottom into what would hopefully be a more prosperous life.

It would also cut back on the amount of deductions people claim since there will be less kids being born, therefore more money for the government.

[Jesda]

That's not how it works. When poorly run firms, BIG ones, fail, they drag down everyone, including well-run firms. Bailouts are intended to prevent (hopefully) this domino effect.

Even if a firm is a good operator, if their stock price falls too far or if they are unable to secure credit at a reasonable price due to problems caused by others, then they will have capital issues and fail.

Being a good operator isn't enough to get oneself through a depression. We can't let good operators fail, and if that involves bailing out some of the bad operators to keep the whole situation from going to hell, then we should do that.

No.

What you are asking for is more of the status quo.

The last time the US went through a severe economic realignment was the Great Depression. You can count the 70s, early 90s, and now as correction periods, but the commonalities are the same. The worse large firms were run, the harder they fell. The harder they fell, the harder they worked to reorganize or cease operation.

In a free market, failed firms don't leave an irreplaceable black hole. They leave an open space for others to take over and compete. More competitive, more efficient, and more intelligently run operations displace the less efficient ones.

There is no fair world where you get a free bailout just because your service provider or your client screwed up and left you hanging. If you were wrongly deceived, the law has provisions for collecting on what you lost. Otherwise, business is business. As a producer or consumer you take certain risks in a free market because you intend to receive certain benefits.

A good operator has no right to prosperity.

What you are advocating is nearly the banking equivalent of British Leyland, an attempt at perpetuating what exists with government support instead of allowing things to fail and change for long term benefit.

You can try mending the machine, but it won't prevent internal failure.

[Jesda]

I'm still trying to figure out how spending millions on condoms is going to stimulate the economy.......I would have much respect for Obama if he stepped in to try and remove all the pork.

I'm baffled as well, since condoms are available for free.

[Armelius]

My friend, I cannot respond to all your posts because I fail at quoting what you say and how I would respond.

The bailout is nothing more than a sham. It's a loan by the federal government from the federal reserve or IMF (who cares?) and it's meant to be paid back by your grandchildren or if you don't plan on having children then other people that will live after you are dead.

The whole question is about government competence to bail out the big players of the economy. It is possible with the right type of spending and the right types of protectionism. For instance they want to put a price floor on oil with taxation. Meaning whatever price it falls you would still have to pay a 1.75 (at least) for a gallon of gas. That is to protect oil companies and Iowa corn producers (making ethanol).

This is not Economics 101 or micro or even macro economics 300 something. Even the best economist will argue minute things about this and that and how economies fail or prosper.

Just look at the history of the IRS to see the change from collection of tariffs to the collection from individuals and you will see the validity of my point. Even during the early 50's collections were low, state sales taxes were almost one or two percent and everything functioned fine. Now with economies collapsing and a government bent on spending our way out of an economic lull they find excuses in these economic morass.

Each time one of these planned events happen the private individuals lose big time. This stuff was foreseen from the Savings and Loan Crisis of the late 80's to the early 90's all the way up to Enron collapsing.

Nothing has changed and it's just an excuse to lower our barriers for an onslaught of cheap foreign products and an out for domestic countries move to foreign lands where there is practically no regulations like what we impose in this country.

You may have gone to a prestigious school in Ann Arbor or elsewhere but I have published (in real newspapers) pro-NAFTA articles back in the early 90's because I knew the legislation was going to pass. I could just as easily published anti-NAFTA articles that would have fallen on deaf ears and blind eyes.

You can believe whatever you want to or what you were taught. But you weren't talking about these bank failures and economic depressions as much as I have which has been right after NAFTA was approved back in 1993.

[smockers83]

Who ever read your articles either got lost in reading them or got bad information. If you've published articles, I would think you'd be able to articulate your argument better and have it make sense.

Such as this claim that you've been talking about these depressions and bank failures more than I have. In this thread, in life in general? In this thread I have talked more about depressions and bank failures than you have.

Such as us talking about trade and all of the sudden you through in something about wages not being equal. What does that have to do with anything?

Such as throwing in Hong Kong and China out of nowhere just because they pegged their currency to the dollar? What did that have to do with anything.

Such as the IMF.

Such as a fixed exchange rate policy.

We could have a much better discussion if you included such points with your argument in a way that made sense rather than just spewing them out in odd places without going into why you're spewing them out. I'm not attacking your knowledge, but you don't make your argument convincing at all because you don't back it up. You just say protectionist policies could be good. Ok, tell us how and under what circumstances.

[audtatious]

It's a loan by the federal government from the federal reserve or IMF (who cares?) and it's meant to be paid back by your grandchildren or if you don't plan on having children then other people that will live after you are dead.

It's more like us getting bailed out by China and other countries who buy our debt.

Putin has just called for action to get away from having a single reserve currency standard. Since US currency is currently the standard, doing so would further make our money worthless and would be the death bell for our global economy. Of course I doubt it would happen unless a few other countries and the UN decide it's a good idea.

[Armelius]

Who ever read your articles either got lost in reading them or got bad information. If you've published articles, I would think you'd be able to articulate your argument better and have it make sense.

Such as this claim that you've been talking about these depressions and bank failures more than I have. In this thread, in life in general? In this thread I have talked more about depressions and bank failures than you have.

Such as us talking about trade and all of the sudden you through in something about wages not being equal. What does that have to do with anything?

Such as throwing in Hong Kong and China out of nowhere just because they pegged their currency to the dollar? What did that have to do with anything.

Such as the IMF.

Such as a fixed exchange rate policy.

We could have a much better discussion if you included such points with your argument in a way that made sense rather than just spewing them out in odd places without going into why you're spewing them out. I'm not attacking your knowledge, but you don't make your argument convincing at all because you don't back it up. You just say protectionist policies could be good. Ok, tell us how and under what circumstances.

http://en.wikipedia.org/wiki/Panic_of_1907

Follow the money. I have brought into this discussion about agricultural exports and central banking. You will see that the third central bank in Hong Kong would be the one to buy up debt or to make loans when there is disparities in trade.

http://en.wikipedia.org/wiki/Bretton_Woods_system

Quote »Picture a party of the nation's greatest bankers stealing out of New York on a private railroad car under cover of darkness, stealthily riding hundred of miles South, embarking on a mysterious launch, sneaking onto an island deserted by all but a few servants, living there a full week under such rigid secrecy that the names of not one of them was once mentioned, lest the servants learn the identity and disclose to the world this strangest, most secret expedition in the history of American finance. I am not romancing; I am giving to the world, for the first time, the real story of how the famous Aldrich currency report, the foundation of our new currency system, was written... The utmost secrecy was enjoined upon all. The public must not glean a hint of what was to be done. Senator Aldrich notified each one to go quietly into a private car of which the railroad had received orders to draw up on an unfrequented platform. Off the party set. New York's ubiquitous reporters had been foiled... Nelso (Aldrich) had confided to Henry, Frank, Paul and Piatt that he was to keep them locked up at Jekyll Island, out of the rest of the world, until they had evolved and compiled a scientific currency system for the United States, the real birth of the present Federal Reserve System, the plan done on Jekyll Island in the conference with Paul, Frank and Henry... Warburg is the link that binds the Aldrich system and the present system together. He more than any one man has made the system possible as a working reality.[8][/quote]No conspiracy there. The whole point it to pass nefarious legislation through these artificially created panics. Incorrectly we keep turning to the government for answers. They are for keeping a system that keeps this kind of thing happening time and time again.

[Cold_Zero]

Sorry, I haven't been following the Economics lesson listed in this thread.

What I did notice is that $15 billion dollars were earmarked for Student Aid, specifically Pell Grants. I have said this before, personally, I do not understand why Congress pumps so much money into the Pell Grant system. Favoring it over the FFEL program, which in my opinion gets more bang for everyone's buck? Because unlike Pell Grants, the majority of the principal amount of FFEL loans have to be paid back. Basically, is it more effective for the Government to give away free student aid (Pell Grants) to fewer students or to subsidized the interest and margin for loans (FFELP) that reach more students?But hey, can someone explain to me how Pell Grants stimulate the economy?

[audtatious]

But hey, can someone explain to me how Pell Grants stimulate the economy?

They don't, just like 90% of the rest of the "stimulus package". It's Dem glut.

[smockers83]

They don't, just like 90% of the rest of the "stimulus package". It's Dem glut.

12 cents to the dollar goes towards infrastructure. That's stimulus. That leaves 88%. I'm sure there's more stimulus other than infrastructure?

The only way I can determine that Pell Grants stimulate the economy is that in 5, 6 years someone who was given the money now has a college education and will use it to stimulate the economy, both by his education and income. They are trying to push math and science.

[Urabus GodofTraction]

12 cents to the dollar goes towards infrastructure. That's stimulus. That leaves 88%.

Was anyone surprised?

If this stimulus package was a charity, it probably would have been blacklisted for it's poor money management.

[Cold_Zero]

I know Smockers. I am sure anyone can make the case that almost every form of Government Spending would stimulate the economy. But with both the prior and current Administration stressing the urgency of passing a Stimulus Bill, I get the impression that we don't want to wait 5, 10 or 15 years for this stimulus to take effect. I mean if that is not the case, why rush a stimulus bill through Congress? Why not just take your time, build an effective Stimulus Plan and not ram this down our throats?But if both administrations are right, if we have there is no time to waste as to not further perpetuate the recession, to get recovery going pronto and to ease the economic suffering of citizens, then why would we load up this Stimulus Bill with fluff, pork, pet projects and ideas/plans that wont take effect until the next decade or don't offer much stimulation to the economy? Unless this is all political pay back and partisanism.Here is an example that went through my head. In these tough economic times, if I get laid off from work, but I am giving a severance plan from my employer, I am going to go through and try to figure out what I am going to do with that money. Since I don’t have a job I think getting the most ‘bang for my buck’ is probably going to be very important. Now I could take my severance money and pay my bills ahead a few months in order to alleviate the pain of having to pay my bills while I look for my job. OR I could go out and buy a nice big Flat Screen HD LCD TV, because, while I am off from work, it would be kind of cool to watch TV. If times get really tough I can sell the TV for cash, if I don’t find a job immediately. I just don’t see how the government spending money on the Endowment for the Arts, Title 1 Education, Pell Grants, Birth Control Renovating the National Mall Area and so on, is that wise of an investment with money that we already don’t have. Not that these are not noble endeavors and if the economy rebounds and we are doing better that we can pursue increase funding of these projects. But when I am in financial trouble, I typically tighten my belt, cut spending and try to spend what funds I do spend on items that reap me a greater return.

Here is an example that went through my head. In these tough economic times, if I get laid off from work, but I am giving a severance plan from my employer, I am going to go through and try to figure out what I am going to do with that money. Since I don’t have a job I think getting the most ‘bang for my buck’ is probably going to be very important. Now I could take my severance money and pay my bills ahead a few months in order to alleviate the pain of having to pay my bills while I look for my job. OR I could go out and buy a nice big Flat Screen HD LCD TV, because, while I am off from work, it would be kind of cool to watch TV. If times get really tough I can sell the TV for cash, if I don’t find a job immediately. I just don’t see how the government spending money on the Endowment for the Arts, Title 1 Education, Pell Grants, Birth Control Renovating the National Mall Area and so on, is that wise of an investment with money that we already don’t have. Not that these are not noble endeavors and if the economy rebounds and we are doing better that we can pursue increase funding of these projects. But when I am in financial trouble, I typically tighten my belt, cut spending and try to spend what funds I do spend on items that reap me a greater return.

[audtatious]

I'm not against the rebuilding and repair of schools as that would actually put some people to work for the short term. I just think it is wholly underfunded for what they wish to accomplish. Remove some of the glut and put it towards real projects that would give people a job (that is not directly under the Gov).

[Cold_Zero]

Not that I disagree with you Matt. But most of the money ear marked for Education is not marked for Capital Improvements, but Title One and Pre K Education projects. The two have nothing to do with each other. And in Indiana, the process for a district to raise capital (float a bond) and build a new school does not allow use of Title One funds from being used for said project.

I would also like to point out that it is the State's responsibility for funding Education. And if they have mismanaged the funding in their state, will the Federal Government exacerbate the situation by throwing more monies to the State? What I have found in our State is that what will likely happen is that the State will take these Federal Funds, spend it on Title One Education and Pre K Education and then deduct that amount (of the Federal Funds) from what the State was already going to use for these two projects and spend the Education funds elsewhere. So, you are not really increasing educational spending at all. No new Title One Teachers or Aides are hired; you are merely deflecting the cost of these programs on to the Federal Government and spending the money elsewhere.

But I have to ask, who we are really putting to work with these infrastructure projects? Are we pouring a lot of money into the pockets of Illegals or Guest Workers in the construction industry, who will turn around and send the money back home to Latin America? Then, who's economy are we really stimulating.

[audtatious]

Supposedly the state bailouts are _supposed_ to be somewhat used for this purpose. At least that is what CNN/MSNBC or whatever non-Fox news agency was talking about the other day.

[Cold_Zero]

Ahh so if Indiana wants to take its share and erect a giant statue to Barrack Obama, then that is stimulus. Since you have to pay someone to build the statue.

[audtatious]

Guesso.....Technically it IS creating a short-term job

Adding Obama to Mt Rushmore would create more jobs tho....

[smockers83]

I wasn't making a case for the Pell Grant idea, I was just saying that's the only way I can see it. I agree 5-6 years is too long for stimulus needed right now.

[Armelius]

The question everyone is asking is why home owners/borrowers being bailed out. At least they can lower interest rates so everyone can refinance their home they are stuck with for the next 10 or more years.

My opinion is that we should reduce our military overseas specifically in Europe where we continue to prop up their economies. Bring these people back home and maybe their might be more of a demand for the housing markets.

Ultimately what will happen is they will just use Social Security to pay for everything and those of us who are after the baby boomers won't get squat or will have to be 90 years of age when we are able to get it. Pyramid schemes don't seem to last very long.

[audtatious]

Cramer on the Stimulus package:

http://www.thehopeforamerica.com/play.php?id=283

[Cold_Zero]

The thing to remember about what Cramer "thinks we should do" is not necessarily going to be the best thing for this country, but what is best for his bottom line. I remember Cramer calling for Greenspan to keep dropping interest rates, so that stocks would go up. But he sold it with a different reason.

But the whole bit about its an early 20's situation, we will see where it goes.., was pretty funny.bud

[Armelius]

Now we hear about removing "buy American" provisions in the bill. As if we need to bail out China and Europe for some reason. We have had tariffs and protectionist policies in the US since the beginning up until WWII. Protectionism means we are protecting our jobs, protecting our country, and protecting our industry from outside manipulation.

But Obama and many of the other blind followers of some failed economic policy want us to continue to be a service economy. It's looking more like a sell out more and more. A one term president. Easy prediction. He will make more money after he is president. Thanks for selling us out.

[smockers83]

Now we hear about removing "buy American" provisions in the bill. As if we need to bail out China and Europe for some reason. We have had tariffs and protectionist policies in the US since the beginning up until WWII. Protectionism means we are protecting our jobs, protecting our country, and protecting our industry from outside manipulation.

But Obama and many of the other blind followers of some failed economic policy want us to continue to be a service economy. It's looking more like a sell out more and more. A one term president. Easy prediction. He will make more money after he is president. Thanks for selling us out.

I've already proved that wrong, albeit in another thread, and it's not because we're blind followers. In fact, I'm not necessarily I follower of Obama at all, I didn't even vote for the man. You, sir, are the one leading a blind and failed economic policy due to the economic fallacies that you have succumbed to like many other Americans, people and politicians alike. Please stop spewing and spreading these fallacies and read a book.

Have you ever wondered why much of Africa hasn't been prosperous during our lifetime? Because their leaders succumb to the very policies you are leading. Quite a few African countries actually used to be prosperous until they became more autonomous.

Or the USSR.

Or the rise of China since it has began to open up its economy.

Every bit of history, real world data, and theory is against you. So as I said earlier, good luck.

[Armelius]

That is ridiculous. African nations are not allowed to have tariffs or if they have them it's one of the only ways they can get any spending for government infrastructure.

The EU has tariffs on African goods. They have protections. And we are not beholden to international bankers or EU or China for that matter. If we tell our elected leaders to erect trade barriers they are supposed to do that.

Instead we have international consent that we are not supposed to have trade restrictions on their low wage goods. We are getting more and more a service economy because we allowed this free trade.

If we had protectionism it would force other countries to raise their wages. Instead we are rewarding foreign government subsides of low wage low cost goods to penetrate our markets.

It's great to have low cost steel or iron but it isn't going to raise the wages in workers of other countries or keep our workers working and buying.

Let me put it this way. If you had gold in New York that belonged to Germany or some other country and they wanted to take it out of the country, would you put a tariff on it to prevent some of it from leaving or would you just let them have it?

[smockers83]

That is ridiculous. African nations are not allowed to have tariffs or if they have them it's one of the only ways they can get any spending for government infrastructure.

The EU has tariffs on African goods. They have protections. And we are not beholden to international bankers or EU or China for that matter. If we tell our elected leaders to erect trade barriers they are supposed to do that.

Instead we have international consent that we are not supposed to have trade restrictions on their low wage goods. We are getting more and more a service economy because we allowed this free trade.

If we had protectionism it would force other countries to raise their wages. Instead we are rewarding foreign government subsides of low wage low cost goods to penetrate our markets.

It's great to have low cost steel or iron but it isn't going to raise the wages in workers of other countries or keep our workers working and buying.

Let me put it this way. If you had gold in New York that belonged to Germany or some other country and they wanted to take it out of the country, would you put a tariff on it to prevent some of it from leaving or would you just let them have it?

What the heck have you been smoking? African nations can have their restrictions and yes, there are also restrictions against African products.

Protectionism doesn't raise wages. I have no idea where you get that from. Give one instance in history where protectionism has directly raised wages. Look at Africa, they are very poor and they have restrictions and have restrictions placed upon them. China has become very prosperous and its national income has risen since it removed some barriers. The Great Depression, when Smoot-Hawley was enacted didn't raise US wages either. Protectionism artificially raises prices above the market/equilibrium price, therefore reducing the real wage due to the artificially high price and inflation.

If Germany had gold in NY and they wanted it, give it to them, no tariffs. If we were still on the gold standard, it wouldn't have affected our own gold supply because it wouldn't have been in the national accounts.

Go discuss this in my International Trade thread only after you've read it.

[Armelius]

Ok. That is exactly what the Federal Reserve did. They sent gold out because the US was attracting too much gold. Just as they floated insane amounts of currency to US banks allowing them to invest in the expanding stock market. So Germany stabilized it's economy through gold and internal spending though it still had to buy magnesium ore that had tariffs on it from either Mexico, Ukraine or Gabon.

But I will go to your thread.

[Cold_Zero]

Dear President Obama.Thank you for f**king up my Monday night TV. I don't watch much TV, but when I do, my show is on Monday. I don't f**king need to hear about the economic problems in Elkhart Indiana. Because this is NOTHING new! The RV industry in Northern Indiana has been in trouble for some time now. Shut the f**k up and get off the TV. I will not support the bills going through Congress right now and nothing you say will make me change my mind.

[audtatious]

The solution to the RV industry? Why, give a stimulus check to those who don't buy RV's while penalizing those who do with more taxes

[Cold_Zero]

Maybe he ought to listen to Mitch Daniels rather than parading around in other people's misery.

[audtatious]

He cares. That's what all this is about. Not that there is any real solution based upon the proposed stimulus bill. How will giving out condoms help them?