Sunday, September 21, 2008

Uneducated Reaction To The Bailout Plan

Now, I'm serious about the uneducatedness--and, ergo, the weightlessness--of my reaction here. I just post such things to sort of keep track of such reactions. My judgments about such matters are worth almost exactly nothing. They're worth about what a coin toss on the matter would be.

But, FWIW (again: nothing), my reaction at this point is, roughly: you're sh*tting me, right?

I'm trying hard to figure out how it is that we're not being asked to give an almost incomprehensible amount of money to a bunch of idiotic criminals because their get-rich quick scheme went awry.

I do understand that there are advantages to be gained for us by doing this...but, then, there are advantages to be gained by turning your wallet over to the mugger. That doesn't mean that you should do it, nor that the advantages outweigh the disadvantages.

Personally, this seems like the soft bigotry of low expectations to me. I say, if you want to be a de facto criminal (even if what you're doing is, strickly speaking, legal), then you need to be good at it. Don't expect the taxpayers to give you a handout just because you weren't smart enough or hard-working enough to achieve the American dream of easy, non-actual-work-related money in incomprehensibly vast sums, cocaine snorted off of hookers' asses, and really stupid-looking suspenders.

But I can't stress enough how little I actually undertand about what's going on.


Blogger The Mystic said...

Here's what gets me about this BS:

All of a sudden there's a "crisis" on Wall Street because some asshats own businesses that are now imploding like neutron stars made of greed. Somehow, at the same time this crisis is occurring, the government is talking about what to do with $700,000,000,000. It's as if they just serendipitously found this sum of money at the same time it's necessary to bail out these companies so they think "Hey, let's do that!"

The Iraq war was just the same. All of a sudden, they wanted to invade Iraq and half a trillion just pops out of nowhere. WTF IS GOING ON? Does no one think "Hey, if we have this money, why don't we think of the best way to use it - not just whether or not we ought to use it for this specific issue?"

Every time there's some sort of issue (which happens to be something the Republicans care about, that is), all of a sudden the debate is about whether or not we should pay an enormous amount of money to "take care of" (I balk at saying "solve) whatever issue is being discussed. Why don't we have a discussion about what we ought to do with $700,000,000,000, bailing out some companies on Wall Street being one of the many, many viable options?

Why don't we put that into our education system? Why don't we use it to help people out of foreclosures? Why don't we use it to pay back good students' student loans? What about care for the veterans coming back from Iraq? What about our own poverty crisis? Huh? Why don't we use it to actually reward good people in bad situations for being good people? Whenever THAT sort of issue is discussed, the government just pulls its pockets out of its pants and goes "Yeah, if only we had money", but as soon as big companies go down, or a war is looming, the money appears! It makes me sick.

It's like this isn't even considered. The only question is whether or not we ought to pay these companies $700,000,000,000 (look at all those zeroes!). It's not "What should we do with this money?" WHY NOT? WHY DON'T WE ACTUALLY DO SOMETHING WORTHWHILE?

I'm sick of this money just appearing when there's an issue that the republicans happen to care about. Does no one else see this as an issue? Maybe there's something important about this that I'm missing.

9:53 AM  
Blogger The Mystic said...

Here's an example I just thought of looking up. If you go to the following website:

You see that the average cost of succesffully averting foreclosure is $3300 per household (that includes costs of counseling and/or financial aid). With $700,000,000,000, we could save a bit over 212,000,000 homes from being foreclosed. That obviously FAR exceeds the amount of homes out there being foreclosed. We could literally save every single person's home at risk of foreclosure in this nation and have TONS of money left over.

This is ridiculous.

10:02 AM  
Blogger The Mystic said...

Ok, I just can't get over this. I looked up the statistics on how many homes are actually being foreclosed.

that website reports that the number of foreclosures is expected to "exceed one million" in 2007. Say we go with one million homes. That means we'd pay, if the other fact is correct about $3300 per home saving it from foreclosure, a mere 3,300,000,000 in order to save every home out there from being foreclosed. I say "mere" because that leaves us with the staggering sum of 696,700,000,000 to figure out what to do with.

Can you believe that? That's practically NOTHING. And yet, here we are, not even contemplating that as a solution and rather putting this money into some companies that are run by greedy bastards.

I can't even imagine what could be done with this money if someone actually thought of how best to use it for the nation as a whole.

10:11 AM  
Anonymous Anonymous said...

Actually, Mystic, it's even worse than you say, since in the case of any expected expenditure, we don't *have* the money anyway. What's being proposed is that we BORROW the money from one of the usual lenders: the Social Security Trust Fund, The Central Bank of China (or UAE or Saudi Arabia etc.), Norway's Sovereign Wealth Fund among many others.

So considering all the worthy other projects you mention, such as education and infrastructure, as well as aid to cash-strapped states are things which might actually help get the economy moving again, increase efficiency and productivity, it becomes an even bigger question as to why it's worthwhile *borrowing* for other pressing issues like the abortion that is Iraq and the restoration of confidence on Wall Street but not for these other worthwile endeavors.

And the elephant in the room is that the ability to continue borrowing this money is dependent on these lenders continuing to believe in the "full faith and credit" of the US government. Something which, due to our fiscal irresponsibility and irrational resistance to collecting sufficient revenue, is beginning to be questioned. S& P has already come out and said that the United States Government's AAA rating is not a "gift from God":

Sooner or later, those lenders are going to demand a higher return on their loans, which would spell disaster for us; hard to imagine how we could pay higher interest rates AND deal with the massive inflation that comes with an increase in the money supply from issuing so much debt. (Look up on Wikipedia or something what a 'liquidity trap' is - it ain't pretty)

What ever happened to having adults like Paul Volcker in charge?

12:42 PM  
Blogger Jim Bales said...


Wow -- great comments, and some serious research behind them! Many, many thanks!


3:15 PM  

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