bailout opinion? (poll)

Discussion in 'Politics, Religion, Social Issues' started by chainprayer, Sep 30, 2008.

?

How much should the US provide in its bailout plan?

  1. More than $700 billion

    9 vote(s)
    11.7%
  2. $700 billion is perfect

    10 vote(s)
    13.0%
  3. Less than $700 billion

    11 vote(s)
    14.3%
  4. Nothing at all!

    47 vote(s)
    61.0%
  1. chainprayer macrumors 6502a

    Joined:
    Feb 10, 2008
    #1
    seems like everyone has a different opinion on this one. what do you think the US should do?
     
  2. Sesshi macrumors G3

    Sesshi

    Joined:
    Jun 3, 2006
    Location:
    One Nation Under Gordon
    #2
    You forgot "Give me the $700bn and I'll sort it out, honest"
     
  3. nanofrog macrumors G4

    Joined:
    May 6, 2008
    #3
    Perfect! :D LMAO :p
     
  4. wordmunger macrumors 603

    wordmunger

    Joined:
    Sep 3, 2003
    Location:
    North Carolina
    #4
    Boy, the Bush administration really mishandled this. It's very different from, say, spending $700 billion in Iraq. If the plan works, we won't have to spend anything. If it fails, we're screwed anyways. The $700 billion will be the least of our worries. The "bailout" is really the only hope to get out of this mess.
     
  5. zachplaysguitar macrumors 6502

    zachplaysguitar

    Joined:
    Aug 15, 2008
    Location:
    Richmond, VA
    #5
    Whatever the amount is something needs to be done fast!
     
  6. Azmordean macrumors 6502

    Joined:
    Mar 10, 2004
    Location:
    Silicon Valley
    #6
    I suspect this will probably be closed or moved to politics forum. But yeah, they need to do something soon. The Bush administration has done a very poor job of explaining to the public what exactly this plan entails and why it is important, which is unfortunate. A whole lot of people see it as giving money to fat cats. Instead, it is buying securities, which will likely go up in value in time, after this crisis passes, in an effort to shore up the financial sector. The financial sector is, of course, pretty much the most important sector of the economy, because all other sectors borrow/raise money from it or through its instrumentalities to fund investments, capital and otherwise.
     
  7. Henri Gaudier macrumors 6502a

    Henri Gaudier

    Joined:
    May 4, 2005
    Location:
    France
    #7
    Here and in real life, I'm often told how great the free market & globalisation are. I, as a Lakota red anarchist have never fallen for their line of guff. And now these free trade boys WANT temporary socialism by way of a helping hand. (Stuffed with the public's money of course!) I thought these boys were invulnerable? That they don't need society or community ... they're too rich for that. But wait ... now they want a helping hand! F 'em! I say let it fall and then perhaps, from the ashes, something more decent could be born.
     
  8. LiveForever macrumors 6502

    Joined:
    Dec 13, 2007
    #8
    That majority (and a big majority) for doing nothing is staggering.

    Yes fat cat brokers and all that-make them weep but do you know what the consequences are for punishing mr cocky stockbroker is?

    Sorry but the WORLD is on the brink of a great depression because a huge proportion of the the US population brought houses they couldn't afford (unless house prices kept going up!!!), rolled over car loans into new 100% car loans and generally spent too much.

    The US got the world (or their government) into this mess, now they have to pay a little more tax and get us out of it.

    Its not that we will be giving these blokes a "helping hand", unfortunately and its unfair, yes, but these blokes control the money supply, the lines of credit, the confidence which oils the wheels of the worlds economy.

    If you let them fall then there will be no money to keep your house going, pay your wages, lend your company investment capital to expand. So the banks will start to want their loans back which will mean forcing you to sell your house, your car, the company you work fro may lay you off as they can't afford the payroll .

    I'm being serious This is scary stuff-we are teetering on the edge of oblivion.

    This is no time to teach people lessons.

    Have you heard the expression, cut your nose to spite your face?

    If they do something like 700 Billion then maybe, just maybe, we can muddle through.

    Do nothing and its the soup kitchens, mass unemployment, social anarchy, the collapse of modern society, the whole toot.

    Forget your iphones, not having turn by turn navigation will be the least of your worries.
     
  9. LiveForever macrumors 6502

    Joined:
    Dec 13, 2007
    #9
    This from todays times explains it very well

    http://www.timesonline.co.uk/tol/comment/columnists/guest_contributors/article4863694.ece

    The harsh arithmetic behind the banking crisis.

    The $700 billion bailout seems much more reasonable when you understand how crippling a fall in a bank's assets is

    Banks are strange institutions. They can epitomise the free market at its best and also indulge in some of the worst forms of financial skulduggery just on the right side of the law; they are both the standard-bearers of the capitalist system and, too often, its worst advertisement.

    But, for the layperson, perhaps the oddest feature of banking is its arithmetic. When other businesses deal with each other they assume, correctly in most cases, that the assets - the land, the buildings, the machinery - belong largely or wholly to their shareholders. But most banks' assets consist of loans and are owned to a small extent only by their shareholders.

    Typically, the part of the banks' assets that belongs to shareholders - the capital - is less than 5 per cent of the total. In the jargon, banks' capital-to-asset ratios are under 5 per cent. The capital is needed to protect the banks' depositors, who own more than 95 per cent of the claims on a bank, against bad risks in the loan portfolios.

    When this is explained to them, the first reaction of most people is to run. However, British high street banks have operated with capital-to-asset ratios of about 5 per cent for many decades, and their customers have been able safely to deposit money and withdraw it on literally billions of occasions.

    The point is that banks have learnt how to ensure that their borrowing customers pay back loans in full and on time. In most years the losses from unpaid loans are comfortably exceeded by profits from interest income and an assortment of fees. But every now and again, the banks take too many risks and the arithmetic turns sour.

    In the past few years, commercial banks - Britain's high street and America's Main Street banks that take deposits from the public and process cheques - have purchased large quantities of so-called structured finance products from investment banks. (The latter differ from commercial banks in two main respects, that they trade and underwrite securities, and that their executives are - or were - even more stupendously overpaid.)

    In principle the typical structured finance product bought by a commercial bank has been very safe and, when issued, was given a triple-A rating by the credit rating agencies. These triple-A securities ought to repay 100 cents in the dollar, 100 pence in the pound, 100 cents in the euro and so on. The great majority of them probably will repay in this way, despite the recent shenanigans.

    Unfortunately, last year the wholesale money markets closed up for a wide variety of reasons, of which the most important was the fall in American house prices and the implications of that fall for the value of the structured finance securities. Triple-A securities dropped in value, often by 10 to 20 per cent. If such securities were, say, 10 per cent of high street bank assets then they had lost 1 or 2 per cent of the value of all their assets.

    That sounds trifling, hardly enough to threaten the banks' charitable donations let alone the future of capitalism. But here comes the vicious arithmetic. A drop in the value of assets of 2 per cent wipes out 40 per cent of the capital of an organisation such as a bank that is only 5 per cent owned by its shareholders. According to rules developed by international financial bureaucrats in Basle over the past 20 years, a bank that has lost a big chunk of its capital must - at least theoretically - shrink its assets to restore the sacred capital-to-assets ratio to its original level.

    A ghastly downward spiral, called “debt deflation”, can now engulf the system. The banks can shrink their assets by selling off securities or forcing their customers to repay loans. But sales of securities aggravate the fall in their price, and forcing customers to repay loans is even more gruesome. As loan portfolios decline, so does the level of bank deposits. Bank deposits are the principal form of money in today's world. If the quantity of money goes down, so do asset prices, incomes and spending.

    None of the above, despite its overwhelming significance for employment and living standards, is rocket science. Ben Bernanke, the Chairman of the Federal Reserve, has written extensively about the Great Depression of the 1930s, the worst example so far of debt deflation.

    The downward spiral is caused by a logjam that prevents market agents from pricing assets correctly. The textbook answer is well known and was applied by the Bank of England on many occasions in the 19th and 20th centuries. The central bank, assisted by the Government, must move into the markets and buy up every decent security in sight. Instead of the triple-A securities trading at 80 or 85 cents, heavy official purchases could raise the price to 90 or 95 cents. The banks can start to write back their capital and to lend again, ending the crisis.

    Like Mr Bernanke, the US Treasury Secretary Hank Paulson knows that big government or central bank purchases of securities must be the priority in an extreme crisis of the present kind. That was the rationale for the Paulson plan of a fund of up to $700 billion to buy in the banks' blighted securities. It was the right thing to do, but Congress didn't like Mr Paulson's chumminess with the bankers.

    Given the harsh arithmetic of a modern banking system, Mr Paulson and Mr Bernanke must try, try and try again to get a similar package through the American political system. If Congress remains pig-headed, a big cut in interest rates, possibly to zero, could be needed to rescue the banking systems and economic prosperity of the leading industrial countries.
     
  10. killr_b macrumors 6502a

    killr_b

    Joined:
    Oct 21, 2005
    Location:
    Suckerfornia
    #10
    This is quite possibly the WORST solution I've read on the net.

    More government, or government involvement is NEVER the answer. The government started this whole mess in 1995 under Clinton forcing lenders to give mortgages to "moderate" income families. And this is what happens.
     
  11. kavika411 macrumors 6502a

    kavika411

    Joined:
    Jan 8, 2006
    Location:
    Alabama
    #11
    George Bush is pushing it very hard. Any quick, high cost proposition pushed this hard by Bush must be a mistake.
     
  12. Beric macrumors 68020

    Beric

    Joined:
    Jan 22, 2008
    Location:
    Bay Area
    #12
    As a fiscal conservative, I believe the government messed up the economy in the first place, by giving companies free reign to exploit the government. Do we really expect the government to do any better now? The country is currently reaping the consequences of corporate and government irresponsibility. Letting the irresponsible government help out the irresponsible corporations seems mighty foolish.

    And making the taxpayers pay for irresponsibility is NOT something I support, as much as it happens in this country already.

    Any "quick" solution involving 700 billion has GOT to be a mistake.
     
  13. hulugu macrumors 68000

    hulugu

    Joined:
    Aug 13, 2003
    Location:
    the faraway towns
    #13
    I didn't see this option, I want to change my vote. Give me 1% and I'll sort it out cheap, honest.
     
  14. Anuba macrumors 68040

    Anuba

    Joined:
    Feb 9, 2005
    #14
    So if you walk straight into a car accident where irresponsible driver #1 didn't use a seat belt, and irresponsible driver #2 forgot to look left, you're not gonna help out or call an ambulance, but walk away in order to teach them a lesson?

    The problem is, your vindictiveness is misguided because the people who created the mess are not going to be punished, regardless of whether there's a bailout or not. Wall Street as you know it is already gone, and those who created the mess are still having champagne and beluga caviar as usual. The only thing the bailout will do is to save a few million Joe Sixpacks from losing their jobs and their homes. Unfortunately it looks like the government dragged this out for too long, this should have been done a month ago. It could still have made a good difference a week ago, but the numbnuts in the House got too many angry emails from voters who don't know jack about the economy, so the House chickened out.
     
  15. pranavss11 macrumors 6502

    Joined:
    Dec 29, 2007
    Location:
    San Jose
  16. 7on macrumors 601

    7on

    Joined:
    Nov 9, 2003
    Location:
    Dress Rosa
    #16
    Surely voters know what would happen when you create $700 billion new dollars. It means the dollar in your pocket is instantly worth a lot less.
     
  17. gotzero macrumors 68040

    Joined:
    Jan 6, 2007
    Location:
    Mid-Atlantic, US
    #17
    The intention is right but the execution is wrong.

    The fact this is being billed as something that could possibly make money for taxpayers is astonishing.

    I think they should have offered straight equity stakes, diluting investors (who deserved it), raising capital, and letting the companies holding the garbage sort it out for themselves. If there was a reason this was not possible, it was certainly not explained.

    I voted less than $700B, not nothing. Letting the credit market freeze up would not be an ideal situation.
     
  18. Aranince macrumors 65816

    Joined:
    Apr 18, 2007
    Location:
    California
    #18
    Well...the bill passed. Say good bye to the economy as we know it.
     
  19. Anuba macrumors 68040

    Anuba

    Joined:
    Feb 9, 2005
    #19
    The economy as you know it is gone. This is about saving the last remains of it. They should have done this 2 months ago.

    When the bus was heading straight for the cliff, they did nothing. When it drove off the cliff, they did nothing. When it was plummeting down towards the ravine floor last week, the Dems voted to cushion the fall but the Reps said nah, screw it. Now that it's already crashed, they voted for taking those who survived the crash to the hospital.
     
  20. Aranince macrumors 65816

    Joined:
    Apr 18, 2007
    Location:
    California
    #20
    As far as I'm concerned, all they did was reward everyone for their misjudgment and sweep the problem under the rug, all while pulling all this money out of thin air.
     
  21. iShater macrumors 604

    iShater

    Joined:
    Aug 13, 2002
    Location:
    Chicagoland
    #21
    Not everyone, unless the government changes the loan agreements that individual house owners signed.
     
  22. leekohler macrumors G5

    leekohler

    Joined:
    Dec 22, 2004
    Location:
    Chicago, Illinois
    #22
    Like I said before- we get some form of universal health care and I'll give them their bailout. That should be the deal on the floor right now.
     
  23. nanofrog macrumors G4

    Joined:
    May 6, 2008
    #23
    There's a number of topics that should probably be on the floor now. It seems that we have some that are in "critical", and others on "life support". :p
     
  24. solvs macrumors 603

    solvs

    Joined:
    Jun 25, 2002
    Location:
    LaLaLand, CA
    #24
    Dear God, I wish you guys would stop spouting this ridiculous talking point. It's simply not true, and I can't help noticing the lack of reliable links or evidence of these claims. While there is plenty of blame to go around, regulation didn't cause this. Deregulation did. Most of those who are screwed right now weren't under the obligations of CRA (which was passed back in the 70's BTW). Congress did pass some screwy laws, the one you're thinking of had to be signed into law by Clinton, it was passed with a bi-partisan veto proof majority, but it was certainly lead by people like Phill Graham. Most of the regulations some were trying to enact, which would have helped to stop this, were blocked. Bush continued this with his owner society mantra. Yes, Dems were also culpable, but it was deregulation, not regulation.

    I've noted this elsewhere on the forums with links, and can point anyone to them if they haven't read it if they need it.
     

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