US Financial Bailout Plan

[phjrsaunt]

Sorry bits, I'm just feeling extra surly today.

[alphabits]

Sorry bits, I'm just feeling extra surly today.

No worries, there's a lot of "edginess" going around lately. ((( Auntie )))

I think we need a giant, nationwide BN phlocking. Maybe they can earmark some of that $700 billion to cover the cost.

[LIPH]

Sorry bits, I'm just feeling extra surly today.

No worries, there's a lot of "edginess" going around lately. ((( Auntie )))

I think we need a giant, nationwide BN phlocking. Maybe they can earmark some of that $700 billion to cover the cost.

You typed one thing, my mind's eye saw another.

[BFinnsUp]

As I understand the two proposed plans, having seen them boiled down to bullet points on FOX (not) News Network while I was eating lunch:

Paulson Plan
1. Fed government uses tax dollars to buy failing securities
2. Fed government sets up over site organizations for creating a market for these and managing them
3 Fed government gets money back, if all goes well, at some point in the future

Flaw I see: Fed lacked oversight in regulation of this to begin with

Republican Rep Plan
1. Fed government sets up insurance for private firms that will buy failing securities
2. A private oversight group backed by the Fed government is established to oversee creating a market for these and managing them
3. Private firms will make money, if all goes well

Flaw I see: Wasn't Fannie and Freddy a private organization backed by the Fed government that had similar goals, that worked well, and if the Fed government spends money on this they do not get it back

Can anyone help me be smarter on this?

Where is plan three?

[Crazy Navy Flyer]

Pretty good, might have to pause here and there to read it all but it's a history of how we got to this mess.

http://www.youtube.com/watch?v=H5tZc8oH--o

[12vmanRick]

This crisis was caused by political correctness being forced on the mortgage lending industry in the Clinton era.

Before the Democrats' affirmative action lending policies became an embarrassment, the Los Angeles Times reported that, starting in 1992, a majority-Democratic Congress "mandated that Fannie and Freddie increase their purchases of mortgages for low-income and medium-income borrowers. Operating under that requirement, Fannie Mae, in particular, has been aggressive and creative in stimulating minority gains."

Under Clinton, the entire federal government put massive pressure on banks to grant more mortgages to the poor and minorities. Clinton's secretary of Housing and Urban Development, Andrew Cuomo, investigated Fannie Mae for racial discrimination and proposed that 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low- to moderate-income borrowers by the year 2001.

Instead of looking at "outdated criteria," such as the mortgage applicant's credit history and ability to make a down payment, banks were encouraged to consider nontraditional measures of credit-worthiness, such as having a good jump shot or having a missing child named "Caylee."

Threatening lawsuits, Clinton's Federal Reserve demanded that banks treat welfare payments and unemployment benefits as valid income sources to qualify for a mortgage. That isn't a joke -- it's a fact.

When Democrats controlled both the executive and legislative branches, political correctness was given a veto over sound business practices.

In 1999, liberals were bragging about extending affirmative action to the financial sector. Los Angeles Times reporter Ron Brownstein hailed the Clinton administration's affirmative action lending policies as one of the "hidden success stories" of the Clinton administration, saying that "black and Latino homeownership has surged to the highest level ever recorded."

Meanwhile, economists were screaming from the rooftops that the Democrats were forcing mortgage lenders to issue loans that would fail the moment the housing market slowed and deadbeat borrowers couldn't get out of their loans by selling their houses.

A decade later, the housing bubble burst and, as predicted, food-stamp-backed mortgages collapsed. Democrats set an affirmative action time-bomb and now it's gone off.

[12vmanRick]

Ten Reasons to Oppose the Wall Street Bailout

1. NO REFORM: The plan attempts to mask, rather than reform, imbalances in credit markets and in U.S. economic public policy. The plan props up reckless and failed banks by buying “troubled assets” instead of focusing on real reforms that go after government sponsored culprits Fannie Mae and Freddie Mac, and sustainable policies that will increase the availability of private capital and expanded economic growth.

2. TREASURY POWER GRAB: The plan raises Constitutional concerns by dramatically expanding the power of the current and future Treasury Secretaries, giving the government agency power to directly purchase assets from for-profit financial and non-financial firms.

3. STUNNING PRICE TAG: The $700 billion bailout figure is as much money as the combined annual budgets of the Departments of Defense, Education and Health and Human Services. It amounts to $2,300 for every man, woman, and child in America.

4. INCREASES NATIONAL DEBT: Instead of cutting spending elsewhere, Congress will borrow all $700 billion on global capital markets, and the bill raises the national debt ceiling to a staggering $11.3 trillion.

5. GLOBAL BAILOUT: The plan includes taxpayer purchases of distressed assets from foreign banks.

6. HURTS RESPONSIBLE AMERICAN BANKS: The plan punishes responsible U.S. banks by keeping reckless, insolvent investment banks in business. As BB&T CEO John Allison wrote in a letter to Congress on Sept. 23rd, “….this is primarily a bailout of poorly run financial institutions…. Corrections are not all bad. The market correction process eliminates irrational competitors.”

7. FLAWED PROCESS: Members of Congress and the public will have less than 24 hours and no hearings to discuss and understand the impact of this sweeping plan. This rush to pass a wildly unpopular plan without benefit of significant public debate and input will also undermine its legitimacy and effectiveness.

8. BY WALL STREET, FOR WALL STREET: Treasury Secretary Paulson, the architect of the plan, was formerly the head of Goldman Sachs, one of the firms responsible for the mess and a direct beneficiary of the bailout. Further, the advisers managing the bailout auctions and assets will be Wall Street firms and will likely receive billions of tax dollars in fees.

9. OTHER OPTIONS NOT EXHAUSTED: The idea that taxpayers will make money on the bailout is not credible. There are ready buyers for these “troubled assets” — Merrill Lynch sold its entire portfolio of mortgage backed securities in July– provided the price is low enough. If a profit was possible, private speculators would readily buy these troubled assets.

10. MORALLY OFFENSIVE: The plan violates basic principles of American capitalism and honest governance by creating a system of “private profits, socialized losses” that transfers money from taxpayers directly to Wall Street investment banks. Free market capitalism only functions if individuals and firms are held accountable and are allowed to both succeed and profit, and also to sustain losses and even fail.

[SharkOnLand]

I’m against the $85,000,000,000.00 bailout of AIG. I'm also against the $700,000,000,000++ bailout being proposed in Congress right now!

Instead, I’m in favor of giving $85,000,000,000 to America in a "We Deserve It" Dividend.

To make the math simple, let’s assume there are 200,000,000 bonafide U.S. Citizens 18+. Our population is about 301,000,000 +/- counting every man, woman and child. So 200,000,000 might be a fair stab at adults 18 and up..

So divide 200 million adults 18+ into $85 billon -- that equals $425,000.00.

My plan is to give $425,000 to every person 18+ as a "We Deserve It" Dividend.

Of course, it would NOT be tax free. So let’s assume a tax rate of 30%. Every individual 18+ has to pay $127,500.00 in taxes. That sends $25,500,000,000 right back to Uncle Sam.

But it means that every adult 18+ has $297,500.00 in their pocket. A husband and wife has $595,000.00.

What would you do with $297,500.00 to $595,000.00 in your family?
Pay off your mortgage – housing crisis solved.
Pay off credit card debt.
Repay college loans – what a great boost to new grads
Put away money for college – It’ll be there for Junior.
Save in a bank – create money to loan to entrepreneurs.
Buy a new car – create jobs
Invest in the market – capital drives growth
Pay for your parent’s medical insurance – health care improves
Enable Deadbeat Dads to come clean – or else

Remember this is for every adult U S Citizen 18+ including the folks who lost their jobs at Lehman Brothers and every other company that is cutting back. And of course, for those serving in our Armed Forces.

If we’re going to re-distribute wealth let’s really do it...instead of trickling out a puny $1000.00 ( “vote buy” ) economic incentive that is being proposed by one of our candidates for President.

If we’re going to do an $85 billion bailout, let’s bail out every adult U S Citizen 18+!

As for AIG – liquidate it.
Sell off its parts.
Let American General go back to being American General.
Sell off the real estate.
Let the private sector bargain hunters cut it up and clean it up.

Here’s my rationale. We deserve it and AIG doesn’t.

Sure it’s a crazy idea that can “never work.”

But can you imagine the Coast-To-Coast Block Party!

How do you spell Economic Boom?

I trust my fellow adult Americans to know how to use the $85 Billion "We Deserve It" Dividend more than I do the geniuses at AIG or in Washington DC.

And remember, This plan only really costs $59.5 Billion because $25.5 Billion is returned
instantly in taxes to Uncle Sam.

Bill Gates will personally send you $1,000 if you forward that email... really.

[Skibo]

Ten Reasons to Oppose the Wall Street Bailout

I'm on board with this unfortunately, the politicians that want to get reelected feel that they need to instantly fix this problem that has been building over the past 20 years. There is no magic bullet to make this crisis stop. Too bad our economy has become a service economy and we don't produce wealth anymore. The only way to make this problem go away is become an exporting nation instead of importing nation. To do that manufacturing has to return to the US. Of course there is some great wealth to be produced by producing and exporting oil. Even producing our own oil would reduce imports and our wealth being sent to other nations.

[Lightning Bolt]

This crisis was caused by political correctness being forced on the mortgage lending industry in the Clinton era.

Before the Democrats' affirmative action lending policies became an embarrassment, the Los Angeles Times reported that, starting in 1992, a majority-Democratic Congress "mandated that Fannie and Freddie increase their purchases of mortgages for low-income and medium-income borrowers. Operating under that requirement, Fannie Mae, in particular, has been aggressive and creative in stimulating minority gains."

Under Clinton, the entire federal government put massive pressure on banks to grant more mortgages to the poor and minorities. Clinton's secretary of Housing and Urban Development, Andrew Cuomo, investigated Fannie Mae for racial discrimination and proposed that 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low- to moderate-income borrowers by the year 2001.

Instead of looking at "outdated criteria," such as the mortgage applicant's credit history and ability to make a down payment, banks were encouraged to consider nontraditional measures of credit-worthiness, such as having a good jump shot or having a missing child named "Caylee."

Threatening lawsuits, Clinton's Federal Reserve demanded that banks treat welfare payments and unemployment benefits as valid income sources to qualify for a mortgage. That isn't a joke -- it's a fact.

When Democrats controlled both the executive and legislative branches, political correctness was given a veto over sound business practices.

In 1999, liberals were bragging about extending affirmative action to the financial sector. Los Angeles Times reporter Ron Brownstein hailed the Clinton administration's affirmative action lending policies as one of the "hidden success stories" of the Clinton administration, saying that "black and Latino homeownership has surged to the highest level ever recorded."

Meanwhile, economists were screaming from the rooftops that the Democrats were forcing mortgage lenders to issue loans that would fail the moment the housing market slowed and deadbeat borrowers couldn't get out of their loans by selling their houses.

A decade later, the housing bubble burst and, as predicted, food-stamp-backed mortgages collapsed. Democrats set an affirmative action time-bomb and now it's gone off.

That could almost pass as a chapter of the story, but it leaves out the crucial final act of the play:
From the early part of this decade, Republicans pushed with their congressional majorities to further deregulate the banking systems.
Home ownership was a highly prioritized plank of the Bush administration, and with further lowered lending rates, (remember the refinance rush?)
mortgages were written for practically anyone, and it has been well-documented now that proof of income was not even a prerequisite.

Mortgage defaults were not simply a result of minorities being overrated, as is claimed in the clearly racist story above.
They were both the faults of lending institutions (and their brokers)
and by seemingly opportunistic buyers who somehow felt that the investment would be almost immediately rewarded by rapidly increased value.

Being in denial of this past decade of outright corporate and personal greed only highlights sheer incompetence towards the matter,
and allowing posts that look as if they are lifted from white supremecist writings should not be tolerated here.

[Lightning Bolt]

Ten Reasons to Oppose the Wall Street Bailout

Too bad our economy has become a service economy and we don't produce wealth anymore. The only way to make this problem go away is become an exporting nation instead of importing nation.

Why should we promote manufacturing at higher U.S. labor costs...(asked years ago)
when we can just run to buy it soooo much more cheaply at the Wal-Mart?

guess what? We're all about to cover those great "savings"....

[Skibo]

Ten Reasons to Oppose the Wall Street Bailout

Too bad our economy has become a service economy and we don't produce wealth anymore. The only way to make this problem go away is become an exporting nation instead of importing nation.

Why should we promote manufacturing at higher U.S. labor costs...(asked years ago)
when we can just run to buy it soooo much more cheaply at the Wal-Mart?

guess what? We're all about to cover those great "savings"....

I have spent most of my career in manufacturing. I have watched my plants close, transfer production overseas and move to some of the cheaper states for production. After 4 company changes I gave up and now work in the service sector (cellular) There are so many indirect costs that people don't even pay attention to. Most importantly is that manufacturing companies gave the "unmotivated" HS graduates the opportunity to get a good paying job with benefits. Today we don't have that. All these grand economic plans since the late 70's ignored the fact that some Americans are only able to work on an assembly line. Many of those people are now in illegal distribution of narcotics and weapons a lot are now burdening our legal system. I have seen many functional illiterates lose their jobs (many over 40) because of "outsourcing". These were some of the best workers I had the pleasure of knowing.

[rednekkPH]

Looks like the bill did not pass the house...and CNN is reporting the Dow just dropped 600 points. Good thing I spent all my money on beer.

[moog]

So some money (23 billion?) can go to....

Report: Everglades in decline as restoration lags

By THE ASSOCIATED PRESS
Published: September 29, 2008
Filed at 1:51 p.m. ET

WEST PALM BEACH, Fla. (AP) -- A multibillion-dollar effort to restore Florida's Everglades has made little progress amid funding shortfalls, bureaucratic red tape and disagreements, according to a congressionally mandated report that warns the vast wetland is in peril.

[LIPH]

Looks like the bill did not pass the house...and CNN is reporting the Dow just dropped 600 points. Good thing I spent all my money on beer.

It's down 506 points right now but it dropped as much as 700 earlier. My 401k is drowning it's so far underwater.

[Wino you know]

Also, crude oil is down about $8.00 a barrel to once again just under $100.00. Not sure if this has anything to do with the bailout, but, rather, the lessening demand for the product.

Anyway, as long as I have an extra $200.00 in my wallet, I'd better hurry to Wal Mart and spend it before it's too late.

[Skibo]

Looks like the bill did not pass the house...and CNN is reporting the Dow just dropped 600 points. Good thing I spent all my money on beer.

It's down 506 points right now but it dropped as much as 700 earlier. My 401k is drowning it's so far underwater.

Who needs money when the chicks dig you?

[rednekkPH]

Looks like the bill did not pass the house...and CNN is reporting the Dow just dropped 600 points. Good thing I spent all my money on beer.

It's down 506 points right now but it dropped as much as 700 earlier. My 401k is drowning it's so far underwater.

Who needs money when the chicks dig you?

I'd settle for either of the above.

[Wino you know]

Looks like the bill did not pass the house...and CNN is reporting the Dow just dropped 600 points. Good thing I spent all my money on beer.

It's down 506 points right now but it dropped as much as 700 earlier. My 401k is drowning it's so far underwater.

Who needs money when the chicks dig you?

I'd settle for either of the above.

One will very easily get you the other.

[LIPH]

Looks like the bill did not pass the house...and CNN is reporting the Dow just dropped 600 points. Good thing I spent all my money on beer.

It's down 506 points right now but it dropped as much as 700 earlier. My 401k is drowning it's so far underwater.

Who needs money when the chicks dig you?

Look for that line about my 401k in the November issue of Money magazine. I just went downstairs to get some air and I was interviewed by a reporter from Money. Her photographer took 6 pictures of me. Autographs will be available for a small fee.