Goverment Bailout

[Sargex]

AFP: Congress balks at huge US financial bailout

The shocking plan of a $700 billion bailout is still going on. To be honest, im still shocked the American economy has come to this point. A friend of mine actually works for AIG adn was extremly scared during the AIG crisis, the thought of tons of people losing the jobs is frighting.

[cpnichol]

That amount of money just shows you how badly a lot of banks and financial institutions have messed up and doesn't include all the billions already pumped into the industry by governments around the world. The cause seems to have been greed, giving out loans that can then be sold on as a financial product, paying big bonuses to those that make the loans and forgetting the fact that loans made to people who can't pay them back are worthless.

But because they can make a load more money in the short term by making these loans and then selling them on, they do it, regardless of the rights and wrongs or consequences.

When banks start going bankrupt something has gone seriously wrong. Without the government bailout there would be a lot more banks and financial institutions going out of business, this would then have a knock on effect on the whole sector with serious implications for share prices, every business, pensions, jobs, morgages etc. Even with the bailout this is still going to have a serious effect on the world economy, the UK for example is on the brink of recession due to irresponsible issuing of loans in the US and a few other factors like high oil prices.

The fact that the US is having to bail out and even nationalise some companies should give you an indication of the potential cost of this crisis without intervention. I see this as a failure of the free market and a prime example of why government regulation is required.

[Tills13]

Hrmm, This is a touchy subject to talk about. The government is trying to help out the American people and the ailing banks/ corporations with money they don't have. Last time I checked the United States was a staggering Three hundred trillion dollars in debt.

Makes you wonder where all that money is coming from. Not to mention the government is now responsible for both Freddy and Fanny. I'm hoping the presidential candidates this time can actually do something about the economy in the United States instead of making it worse as Bush has done.

~Tullsy

[zol]

So it's bad to regulate, but then good to fork over billions? Nice.

[Sargex]

Originally Posted by Tills13

I'm hoping the presidential candidates this time can actually do something about the economy in the United States instead of making it worse as Bush has done.

Bush will go down as one of the worst president's in American history, the man with the lowest approval rating. I do like to idea of free market, but times like this of oil prices, bankrupty, and possible recession, the goverment has to have inverntion.

Hopefully future presidents can resolve this issue.

[cpnichol]

Found this which I think gives you a good idea of just how much 700 billion is. I don't think the numbers are any suggested policies, they are just an example of the kind of measure that would be needed to raise 700 billion.

http://i36.photobucket.com/albums/e3...ailoutmath.png

[XTR3M3]

700 billion would fund universal health care in the US for 7 years! The business man in me understands why we can't let all these banks fail. Part of me wanted to Government to only get the money back to the people that had money in these banks and not to the institutions themselves. My hardnose instinct was to let these gluttonous instituions fail. There are plenty of GOOD banking institutions out there that weren't praying on people with predatory subprime mortgages and other companies, like Fannie May, that were stupid enough to buy all that bad paper.

Not only should the upper management and CEOs of these institutions be fired, but INDICTED!

[Tills13]

The official amount needed is actually not 700 billion but 1.2 trillion.

Banks Will Need Another $500 Billion: Gross - Markets * US * News * Story - CNBC.com

[Rosh93]

Well just to update everyone, the bailout was rejected by the house today, so I'm guessing that our economy is going to go down the drain....

[MyComputer]

You know, its just cheaper to give Every Leagal American 3 Million dollars, its cheaper, and that money gets spent so it helps the economy and It would acctually affect us, instead of of the big crop. banks.


My Two Cents...

[boblosanchez]

I agree with mycomputer since the stimulus check brought a lot of buisness, and that was a couple hundred dollars to only so many people. Also, guess who's buying all of the US bonds with their booming economy? China.

[teh-pwnzer]

Originally Posted by Rosh93

Well just to update everyone, the bailout was rejected by the house today, so I'm guessing that our economy is going to go down the drain....

....again!

Well, I didn't think it was going to pass anyway. This whole mess is the outcome of some stupid foolish idea/thought in the first place. =/

[IceAdam]

I genuinely thought they were going to pass it .. they wouldnt reject it out of hand and leave the economy floundering like a fish out of the water though

[seroone]

so who still thinks gore would have been worse?