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Joined: Dec 06 2007 Location: Connecticut Posts: 11244

I am trying to understand the way that the bailout has gone.

So far here is what I have seen.

1.) Economic meltdown
2.) Companies start to go out of business
3.) A bailout is planned and then money is given to the companies without terms
4.) The companies use the money to give executives awesome bonuses
5.) The American people freak out
6.) The Government sets rules that state you can't give money as bonuses if you took bailout money.
7.) Executives get pissed because they aren't rich enough
8.) Executives try to give money back
9.) Government says that they won't take money back yet.

I'm not sure where this leaves us, but that is as far as I understand now.

Wow we are super fucked.

http://money.cnn.com/2009/02/06/news/companies/goldman_tarp/index.htm?postversion=2009020604

Joined: Apr 14 2006 Location: Lake Michigan Posts: 3332

I didn't like this first bailout, but begrudgingly accepted it because of the situation. Now, it's pretty much imploded upon itself, and Obama wants an even larger one this time? That makes no sense.

This time around, I don't want another so soon after the first, especially since it has a serious threat of causing dangerously high inflation. Not to mention, that most of the bill has nothing in it about creating jobs. It's just a bunch of programs that the dems want. These sorts of things should be separate bills, debated on their own, not attached to a stimulus bill.

The Wall Street Journal did a study that showed that only every twelve cents to every dollar in this bill actually goes towards job creation:

http://online.wsj.com/article/SB123310466514522309.html

Plus, according to the Congressional Budge Office, the package will have long-term damage that far outweighs any short-term gains:

http://www.washingtontimes.com/news/2009/feb/04/cbo-obama-stimulus-harmful-over-long-haul/

Because we have become so used to great economies with minimal downturns, we fail to realize that while this is a bad recession, historically it isn't horrible, yet. The free market has a way of fixing itself in time. We don't need to see what happened in the Great Depression, where the downturn was interrupted by massive government spending that didn't solve the problem, but only alleviated some of its effects (Not that doing nothing like Hoover did is the answer either. There has to be a moderate middle-ground found where the government can help those who are hurting, but not make the economy dependent upon public spending that has byproducts of massive inflation).

Posted: Feb 06 2009 04:05 pm

This package may work and it may not, the important thing is that President Obama is putting restrictions on the market and helping to regulate it. To Cattivo, this must sound like communism, but we have seen the results of an unchecked market over the last eight years. Also you can not take that wall street journal article as fact as it is an "opinion article", and it is quite slanted to say the least. What really amazes me is that for the first time ever we are involved in a war and LOSING money from it. I think Mr. Obama should take a close look at some of those No-Bid contract scams that Mr. Cheney set himself up with and find a better way to spend the governments money. If you really want to see some tax payer money squandered check out this. Fuck BLACKWATER.

http://iraqforsale.org/

Joined: Apr 14 2006 Location: Lake Michigan Posts: 3332

Ash Burton wrote:

This package may work and it may not

According to the CBO, which is a non-partisan, government organization, it will fail in the long run.

Ash Burton wrote:

but we have seen the results of an unchecked market over the last eight years.

The cause of the current recession is the mortgage industry. Bush's economic policy, which mainly consisted of tax cuts and spending, had nothing to do with that. The policies that created this crisis stretch back decades and do not have their origins in the past eight years. That's a false argument that Obama and the dems in Congress have been using.

Ash Burton wrote:

Also you can not take that wall street journal article as fact as it is an "opinion article", and it is quite slanted to say the least.

That doesn't negate the findings of the study. Most everyone, including the CBO, recognizes that this is mostly a pork bill and not a stimulus bill. As this information has started coming out, public opinion has been becoming more and more negative towards it.

Joined: Dec 06 2007 Location: Connecticut Posts: 11244

My feeling is that all of the bailing out that is being done could be avoided by watching capitalism do its job.

Companies will fail. Big companies will fail.

Then if there is a need, smaller companies will begin to appear and through competition the need will be filled with better organized companies.

Yes, there will be job loss. Yes it will suck. But I feel like these bailouts delay a much needed rebalancing.

Posted: Feb 06 2009 04:36 pm

Tax cuts for the rich and ridiculous spending on a war have just as much to do with the market as the mortgage crunch. Bush also allowed companies such as Enron to go unchecked and unpunished so yes, it is their fault. Either way, the Republicans have been passing their laws and packages for 8 years and I am willing to allow the Dems to do the same now, they cant do much worse.

Joined: Apr 14 2006 Location: Lake Michigan Posts: 3332

GPFontaine wrote:

My feeling is that all of the bailing out that is being done could be avoided by watching capitalism do its job.

Companies will fail. Big companies will fail.

Then if there is a need, smaller companies will begin to appear and through competition the need will be filled with better organized companies.

Yes, there will be job loss. Yes it will suck. But I feel like these bailouts delay a much needed rebalancing.

Absolutely.

Furthermore, what does all of this have to do with job creation:

$150 million for the Smithsonian
$34 million to renovate the Department of Commerce headquarters
$500 million for improvement projects for National Institutes of Health facilities
$44 million for repairs to Department of Agriculture headquarters
$350 million for Agriculture Department computers
$88 million to help move the Public Health Service into a new building
$448 million for constructing a new Homeland Security Department headquarters
$600 million to convert the federal auto fleet to hybrids
$450 million for NASA (carve-out for “climate-research missions”)
$600 million for NOAA (carve-out for “climate modeling”)
$1 billion for the Census Bureau
$850 million for Amtrak
$87 million for a polar icebreaking ship
$1.7 billion for the National Park System
$55 million for Historic Preservation Fund
$7.6 billion for “rural community advancement programs”
$150 million for agricultural-commodity purchases
$150 million for “producers of livestock, honeybees, and farm-raised fish”
$2 billion for renewable-energy research ($400 million for global-warming research)
$2 billion for a “clean coal” power plant in Illinois
$6.2 billion for the Weatherization Assistance Program
$3.5 billion for energy-efficiency and conservation block grants
$3.4 billion for the State Energy Program
$200 million for state and local electric-transport projects
$300 million for energy-efficient-appliance rebate programs
$400 million for hybrid cars for state and local governments
$1 billion for the manufacturing of advanced batteries
$1.5 billion for green-technology loan guarantees
$8 billion for innovative-technology loan-guarantee program
$2.4 billion for carbon-capture demonstration projects
$4.5 billion for electricity grid

All pork.

http://article.nationalreview.com/?q=YjcyODIyZGM2MGU1ZDdkNDgxZDc3OTNjYjM4ZDY1ODI=#pork

Joined: Apr 14 2006 Location: Lake Michigan Posts: 3332

Ash Burton wrote:

Tax cuts for the rich

Another dem canard you're just repeating. How are child-tax credits only for the rich? Don't all families no matter the financial background have children?

Take a look at the comparison in tax brackets. There was a decrease in percentages almost across the board:

http://en.wikipedia.org/wiki/Bush_tax_cuts#Tax_bracket_comparison

For example, if you were married and filing jointly and earning $50K per year, your percentage decreased from 27% to 15%. That's astounding.

Ash Burton wrote:

Bush also allowed companies such as Enron to go unchecked and unpunished so yes, it is their fault.

That has nothing to do with the mortgage industry, which was the main cause of our current dilemma.

Not to mention that your statement is a lie. Enron executive were tried under Bush's presidency for crimes that they committed in the 90s - when Clinton was president.

Besides, how can you fault any president for the criminal actions of a private citizen/company? That's just doesn't make sense. No matter the amount of regulation instituted by the government, it's the businessmen's decision to commit the crime against existing regulations that is the problem.

Docinsano's Channel 63 · Posted: Feb 06 2009 04:52 pm

Meh, I could listen to this political-economical mumbo-jumbo on NPR's Marketplace... Basically from what I understand, everybody has fucked up financially for the past 15 years or so. The result: the situation we're in now.

Joined: Dec 06 2007 Location: Connecticut Posts: 11244

Cattivo wrote:

GPFontaine wrote:

My feeling is that all of the bailing out that is being done could be avoided by watching capitalism do its job.

Companies will fail. Big companies will fail.

Then if there is a need, smaller companies will begin to appear and through competition the need will be filled with better organized companies.

Yes, there will be job loss. Yes it will suck. But I feel like these bailouts delay a much needed rebalancing.

Absolutely.

Furthermore, what does all of this have to do with job creation:

$150 million for the Smithsonian
$34 million to renovate the Department of Commerce headquarters
$500 million for improvement projects for National Institutes of Health facilities
$44 million for repairs to Department of Agriculture headquarters
$350 million for Agriculture Department computers
$88 million to help move the Public Health Service into a new building
$448 million for constructing a new Homeland Security Department headquarters
$600 million to convert the federal auto fleet to hybrids
$450 million for NASA (carve-out for “climate-research missions”)
$600 million for NOAA (carve-out for “climate modeling”)
$1 billion for the Census Bureau
$850 million for Amtrak
$87 million for a polar icebreaking ship
$1.7 billion for the National Park System
$55 million for Historic Preservation Fund
$7.6 billion for “rural community advancement programs”
$150 million for agricultural-commodity purchases
$150 million for “producers of livestock, honeybees, and farm-raised fish”
$2 billion for renewable-energy research ($400 million for global-warming research)
$2 billion for a “clean coal” power plant in Illinois
$6.2 billion for the Weatherization Assistance Program
$3.5 billion for energy-efficiency and conservation block grants
$3.4 billion for the State Energy Program
$200 million for state and local electric-transport projects
$300 million for energy-efficient-appliance rebate programs
$400 million for hybrid cars for state and local governments
$1 billion for the manufacturing of advanced batteries
$1.5 billion for green-technology loan guarantees
$8 billion for innovative-technology loan-guarantee program
$2.4 billion for carbon-capture demonstration projects
$4.5 billion for electricity grid

All pork.

http://article.nationalreview.com/?q=YjcyODIyZGM2MGU1ZDdkNDgxZDc3OTNjYjM4ZDY1ODI=#pork

Some of those things are really good ideas as long term investments. We should have spent our war money that way instead of on... well... a war.

I still think we should move forward as much as possible with clean renewable energy and going "green" for the sake of our survivability and the long road to success.

I'm not sure it is the government's job to create new jobs, but in a way perhaps it is. I do think it is their job to better our infrastructure in a positive way and that means that certain things need to get done. These things require people and therefore jobs are made.

There are too many places that have run out of money for plowing snow... how the fuck are people supposed to go to work and shit if no one will plow the roads?

I also think it is a terrible move to remove social workers from school systems. In general if we pay for them as an upfront cost, there are less children who end up in special needs classes or in deep trouble. It costs a fuckload of a lot more money to have a kid with a special needs worker just because they have a bad home life and can't concentrate on work. It also costs a lot more when cops have to deal with these people.

Joined: Jan 13 2009 Location: Chicago, IL Posts: 33

Giving people money to do projects creates jobs because they have to hire people to do projects.

It has more to do with creating jobs then giving companies a tax break so that the CEO can spend one extra week in his Summer Home, or so that Wal-Mart gets shit for $0.01 less per unit.

Everything and nothing can be abstracted to job creation, depending on how far you go with it.

Here's some research on how to spend stimulus dollars:

Table 1: Fiscal Economic Bang for the Buck
One year $ change in real GDP for a given $ reduction in federal tax revenue or increase
in spending
Tax Cuts
Non-refundable lump-sum tax rebate 1.02
Refundable lump-sum tax rebate 1.26
Temporary tax cuts
payroll tax holiday 1.29
Across the board tax cut 1.03
Accelerated depreciation 0.27
Permanent tax cuts
Extend alternative minimum tax patch 0.48
Make Bush income tax cuts permanent 0.29
Make dividend and capital gains tax cuts permanent 0.37
Cut in corporate tax rate 0.30
Spending Increases
Extending UI benefits 1.64
Temporary increase in food stamps 1.73
General aid to state governments 1.36
Increased infrastructure spending 1.59

http://www.economy.com/mark-zandi/documents/assissing-the-impact-of-the-fiscal-stimulus.pdf

Posted: Feb 06 2009 05:25 pm

Cattivo wrote:

GPFontaine wrote:

My feeling is that all of the bailing out that is being done could be avoided by watching capitalism do its job.

Companies will fail. Big companies will fail.

Then if there is a need, smaller companies will begin to appear and through competition the need will be filled with better organized companies.

Yes, there will be job loss. Yes it will suck. But I feel like these bailouts delay a much needed rebalancing.

Absolutely.

Furthermore, what does all of this have to do with job creation:

$150 million for the Smithsonian
$34 million to renovate the Department of Commerce headquarters
$500 million for improvement projects for National Institutes of Health facilities
$44 million for repairs to Department of Agriculture headquarters
$350 million for Agriculture Department computers
$88 million to help move the Public Health Service into a new building
$448 million for constructing a new Homeland Security Department headquarters
$600 million to convert the federal auto fleet to hybrids
$450 million for NASA (carve-out for “climate-research missions”)
$600 million for NOAA (carve-out for “climate modeling”)
$1 billion for the Census Bureau
$850 million for Amtrak
$87 million for a polar icebreaking ship
$1.7 billion for the National Park System
$55 million for Historic Preservation Fund
$7.6 billion for “rural community advancement programs”
$150 million for agricultural-commodity purchases
$150 million for “producers of livestock, honeybees, and farm-raised fish”
$2 billion for renewable-energy research ($400 million for global-warming research)
$2 billion for a “clean coal” power plant in Illinois
$6.2 billion for the Weatherization Assistance Program
$3.5 billion for energy-efficiency and conservation block grants
$3.4 billion for the State Energy Program
$200 million for state and local electric-transport projects
$300 million for energy-efficient-appliance rebate programs
$400 million for hybrid cars for state and local governments
$1 billion for the manufacturing of advanced batteries
$1.5 billion for green-technology loan guarantees
$8 billion for innovative-technology loan-guarantee program
$2.4 billion for carbon-capture demonstration projects
$4.5 billion for electricity grid

All pork.

http://article.nationalreview.com/?q=YjcyODIyZGM2MGU1ZDdkNDgxZDc3OTNjYjM4ZDY1ODI=#pork

Thanks Rush...er, I mean Cattivo, I agree. I have no idea how an electricity gird, state energy programs, repairs to buildings, Amtrak will ever create jobs. Really dude change Fox news for one second . Thanks Softnum for a voice of reason.

Joined: Apr 14 2006 Location: Lake Michigan Posts: 3332

Believe me Ash, my choice of news is not monolithic. I read dailykos.com, watch some CNN, MSNBC, & NBC news, as well as read the AP & Reuters newswires.

Sorry if you don't like hearing the other side's argument. Perhaps it is you who likes sequestering themselves with one-sided news?

Joined: Oct 12 2007 Posts: 821

I am sick and tired to both the left and the right pointing fingers at each other over the economical situation, because at the end of the day, all that energy spent bitching and moaning won't fix anything. There are many factors for the state of the economy, and both sides caused their fair share of problems. Yes, Clinton's mortgage plan was flawed in the end, but Bush giving insane tax breaks to oil company ECOs didn't help at all. The point is, lets stop pointing fingers like small children, it doesn't flatter either side.

as for that list of figure, a lot of those are a good ideas in my mind, but putting off on a lot of them until we are more economically stable would be a much better idea.

As for the free market, in a perfect world, it would work without government help. It would pay its worker's fairly and give them all the benefits they need while serving the public, and when they break from that, they would fall a part. But the world isn't prefect, and companies have proven they will cut corners, cheat their workers out of money, even kill people over creating a monopoly in order to stay in power.

Like wise, in a prefect world, having the government completely control the market would allow for everyone to have what they needed and make sure everyone is treated fairly. Once again, the world is not prefect, and it has been proven in the past that the government will abuse it power.

The problem is, both extremes just don't work in the end, damning we, the people by picking one extreme or the other, and no one seem to be willing to compromise to find a system that works.

Posted: Feb 06 2009 08:13 pm

Cattivo wrote:

I didn't like this first bailout, but begrudgingly accepted it because of the situation. Now, it's pretty much imploded upon itself, and Obama wants an even larger one this time?

In response to criticism that his stimulus plan was expensive and would drastically expand our already critically large national debt, Obama said that it wasn't his fault Bush handed him a giant deficit. Maybe so, that doesn't mean that Obama can't be held accountable for making it worse, nor does it mean the inherited debt is not his problem; it most decidedly is. It is times like these that I wish Ron Paul was our president.

Joined: Jan 13 2009 Location: Chicago, IL Posts: 33

My question to you would be.. what would Ron Paul do differently?

I agree with you. Using Bush as a scapegoat is getting old already. And it would be good for us to move on, whichever side of the isle (as they say) that you are on. I shutter when he makes excuses like that.

But in classical Keynesian economics, there's 2 ways to stimulate the economy. Lower Taxes (or offer refunds) and raise spending. Both of these things cost money.

And, just to head off one of the common retorts, Yes. I have heard of the Laffer Curve. I know the arguments on both sides, and have even seen that treacherously incorrect chart the WSJ ran about 3 years ago.

The fact is that Clinton's economic policy doubled federal revenue in 8 years, where as W's only increased it by 50%. In fact, half the years he was in charge the federal income actually shrank year-over-year. It's hardly conclusive proof, but I don't think we're on the 'wrong' side of the Laffer Curve, anyway; and this seems to at least supprot this argument.

Posted: Feb 06 2009 11:23 pm

More money for government is not always a good thing. A good government is nice and lean so it can do the projects that its best at (roads, law enforcement, and other jobs that benefit the majority and are awkward at best to enforce in a market system).

Where I differ from Cattivo is that I think some of the above "pork" is wise investment into energy use. Green energy technology is definitely the way to go, everyone wins, and more importantly from the perspective as to who should lead the research is everybody benefits.

I'm also personally fond of the weatherazation program.

My mother and me lived in a house that had no insulation, save the attic. Drafts would come in and the winter would leave the mutually unnappealing options of blasting the heater nonstop and killing the pocketbook or freezing constantly. We came to a comprimise, that of being only mildly miserable and almost broke. We also had an illegal heater setup, which threatened to burn the house down entirely, which fortunely(?) fixed itself in the heater burnt out. We replaced it with a cheap gas heater, also illegal. There was no money to tackle the project on the supply side, much less the problem of labor. The weatherization program came along, fixed us up with a working safe heater and insulation, fire and carbon monoxide alarms, and rubber on the doors and windows. It saved us a fortune, made winter comfortable, and from the state's perspective ended up increasing energy efficiency, as well as removing a very expensive fire hazard.

I don't think tax cuts are the way to go. Big money is clamping down hard on spending, and a few tax breaks here and there are just going to go into the mattress. Tax breaks on everyone else are just going to be de facto unemployment checks.

Republicans lose big respect from me for their alternative monumental tax break they proposed. I'm sort of happy that they dragged their heels a bit, giving everyone the time to process this thing and at least keep it from being bought sticker. That being said, I respect Obama's statement on the matter, in that any action we DO take should be now, rather than later.

Joined: Apr 14 2006 Location: Lake Michigan Posts: 3332

Syd, that's exactly what I thought when Obama said that at the dem retreat the other night.

Nihilist brought a nice dose of common sense into the question. Moderation is usually the best answer.

As for Clinton in regard to Softnum's comments, keep in mind, Clinton was able to benefit from his "peace dividend" where he cut military expenditures in order to balance the budget. That worked for the time-being, but was very complacent, and left the military unprepared for the challenges of the war on terror, and gave Rumsfeld an opening to instigate his shitty "modernization" techniques which basically consisted of less troops, but trained better, which left us without the necessary numbers to stabilize Iraq quickly....On a similar note, I actually support Obama's recent statement that Russia and us should reduce our nuclear stockpile to 1K, down from 5K. Now that the cold war is over (in spite of recent authoritarian overtones in Russia), no one needs that many nukes, which would help us cut maintenance costs on existing icbms and what not.

Posted: Feb 07 2009 05:55 pm

so...... fuck capitalism