Should the USA Bailout EVERYONE?

so when Asian markets in 98 were defaulting, USA was very much against bailouts. Free market they said, let the invisible hand fix everything and have firms go bankrupt. And now you don’t want to take some of your own medicine ?

The answer to your question is No, because not all companies are too big to fail. But its a silly question in the first place. Would you bail out joe the plumber too?

I don’t think it’s silly. Have you not been watching the news? We have the airlines, credit card companies and millions of homeowners in line as well as other companies asking for help.

Please tell me how asking what affect printing up money to pay for things when we have a huge debit to tackle.

My point is if you are going to pick and choose which companies to save then why not save everyone? They let Lehman die and that created a snowball affect IMO.

with the national debt reaching 10 trillion, the us govt budget reaching staggering yearly deficits, bailing out everyone is hardly a good idea, no? you don’t have money to do it.

you’ll need to print more in order to pay for it. by printing more, you’ld be diluting the value of the money currently in circulation, thus leading to a fall in value of US dollar…hardly an exciting thing for people who hold the currency.

furthermore, you already have enough problems to deal with like the retiring baby boomers and their pensions, aging infrastructure, money-eating wars, ever growing military spending, you name it! besides, with all the things obama promised to do, he already doesn’t have enough funds. bailing out the rest of the country is just plain silly.

as an afterthought, why exactly should you be bailing out companies that blatantly failed in doing business? think about it, banks went bankrupt! that’s pretty much one of the most idiot proof and risk averse businesses, and yet they went bankrupt. perhaps the reason for that was the fact that they took too much risk in their chase for profits? didn’t they realise that the profit levels they were experiencing at the start of the century were unsustainable? and i presume you are suggesting to bail them out…

anywho, i’m sure your taxpayers will love the idea throwing money left and right to finance every business which hit the fence. besides, the govt will surely ask for something in return. would they ask for ownership of those businesses? and all of a sudden US of A turns into a nationalized economy. hmmm. nah, not gonna happen…you have the biggest concentration of hardcore capitalist believers (unless they go bankrupt, of course)!

@GamTrak 186085 wrote:

I don’t think it’s silly. Have you not been watching the news? We have the airlines, credit card companies and millions of homeowners in line as well as other companies asking for help.

Please tell me how asking what affect printing up money to pay for things when we have a huge debit to tackle.

My point is if you are going to pick and choose which companies to save then why not save everyone? They let Lehman die and that created a snowball affect IMO.

These article on ecomomics may give you a good idea why printing too much money is a bad thing.

http://economics.about.com/cs/money/a/print_money.htm

http://economics.about.com/cs/neoclassical/a/value_of_money.htm

@slotplayer 186092 wrote:

These article on ecomomics may give you a good idea why printing too much money is a bad thing.

Thanks for the links they are informative. ” title=”” class=”bbcode_smiley” />

My problem with bailouts is that they don’t help anything unless changes occur. The next problem is that there is no bottom in sight and devalue our dollar which hurts as well. We have given away almost 2 trillion dollars and yet we are facing millions more jobs being lost this year alone.

How do we know that Paluson won’t ask for another $700 Billion and who knows how much it will be in the end? Until the housing crisis is addressed (which is has not been) then we will not see a recovery. What do you think will happen when millions of people have NO home and NO job, but the banks have all of the money? It won’t be pretty. :Cry:

My problem with bailouts is that they don’t help anything unless changes occur.

Great point, very true, like the “whats better, give some one a slice of bread, or teach him to bake.

when I went for a loan for a small janitor business, I had to give the bank a written plan, but I wonder if these banks gave any agency their written plan so they don’t get in trouble again, they would not talk to me unless I gave them one.

my opin? Nixon never should have taken us off the gold standard.

Forgive me if i’ve posted this before.

On Sunday i saw Fahreed Zahkaria of Newsweek on CNN. He argued that the US (obama) can and should spend as much as they need/want to fix the current problems. His point was that all industrial countries, in Europe, Asia and even Middle East Oil countries will all be adding on so much debt that there really isn’t a disadvantage to the US running up huge debts.

Basically the reality is that for the next 30 years most of the world governments will have huge debts and that the reality is that investors will just accept that as a given. Now my buddy who was working on his PhD in Economics at one point, was saying that Keynes felt the same way, that debt is really only an issue relative your competition. If the EU countries, japan, russia, Australia, etc. are all deeply in debt then we’re all competing on the same field.

Now i would still argue that we shouldn’t overdue it, but probably should only consider bailouts in cases where large numbers of jobs or important technical abilities may be lost

@GamTrak 186094 wrote:

What do you think will happen when millions of people have NO home and NO job, but the banks have all of the money? It won’t be pretty. :Cry:

none of this is new, we’ve been talking about this for over 6 weeks now. However, I was bitchin about the state of affairs ironicly exactly 4 years ago today on my blog. As were many others.

Friday, November 12, 2004
Fasten your Boots

Fasten your boots, the ride is just beginning.

With the working population growing at 150k a month, the American Capital System is in jeopardy. Gone are many of the manufacturing jobs that supported working class famlies for so long. It’s a new dawn in the job market these days.

With a large pool of workers, corporation no longer need to offer benefit packages to attract qualified candidates. This is why there has been a large rise in temporary workers the past decade and a half.

Bush stated in the third debate that the country is moving towards an “ownership society” and in a recent Gallop poll and “greed and materialism” was the number one moral issue.

Ultimately, this will further divide our country into have and have nots.
Further evidence is that home ownership is at a record high, but also are the number of bankruptcies and the number of people entering poverty. This a bubble ready to burst.

When a computer hangs, the user presses the reset button. The capital system is in much need of a reset. Similar to the stock market crash of 1929. Although, the human suffering would be widespread, it is the best thing that could happen to this country in the long run as greed is out of control.

@AmCan 186103 wrote:

On Sunday i saw Fahreed Zahkaria of Newsweek on CNN. He argued that the US (obama) can and should spend as much as they need/want to fix the current problems. His point was that all industrial countries, in Europe, Asia and even Middle East Oil countries will all be adding on so much debt that there really isn’t a disadvantage to the US running up huge debts.

Basically the reality is that for the next 30 years most of the world governments will have huge debts and that the reality is that investors will just accept that as a given. Now my buddy who was working on his PhD in Economics at one point, was saying that Keynes felt the same way, that debt is really only an issue relative your competition. If the EU countries, japan, russia, Australia, etc. are all deeply in debt then we’re all competing on the same field.

on the other hand, as far as i’m aware, US has the worst outstanding debt out of all countries in the world. i think that while the current Brenton Woods agreement remains in force and de facto keeps USD as the “reserve currency” around the world, US will be safe. Now if that would change (france, and several other industrialised countries are calling for a change)…US would be literally fucked as nobody would be interested in dollars nor American debt.

i guess that’s one side of the story. regardless of the truth, and actual cause and effect, the science (its actually art) of economics has been severely discredited over this financial crisis. makes you wonder how the vast majority of economists never “saw it coming”. i mean, if economics is your speciality, you should’ve seen that the world is doomed and done something about it, no? usually the same is expected of other professions…

i did my bachelors degree in economics and found it overwhelmingly bogus. some of the reasons were related to the fact that economists couldn’t predict the future (not in a crystal ball kind of way, but based on circumstances), they always had a 50/50 split in opinion (physics, chemistry, biology can). they could only gather data from the past to support their theory. and even then, they only chose data that validated their theories.

so yea, me thinks that economists are overrated!

The value of the Dollar has actually gone up quite steeply recently. Even though this seems to have been driven by quite peculiar logic…

Printing large amounts of money could lead to hyper inflation which isn’t a very thrilling prospect. This is not to say that the US can’t take on more debt. The problem is that Paulson seems to be a complete and utter idiot with no grip on the situation. Obama should replace him straight away and also replace all the loyalists Paulson may have established somewhere further down the chain of command. Thanks to Paulson the markets fell by another 5% and he injected a great deal of insecurity by retroactively changing the terms of the bailout package. We know what to think of retroactive term changes eh?