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Well, the White House and Congress seem to have agreed on a bailout package, and all signs point to Wednesday being the day of the critical vote on the package. Even with the reluctance of some fiscally conservative Republicans, the vast majority of America's elected leaders seem to agree it's important enough to spend close to $1 Trillion of taxpayers' money to buy bad mortgages in a bid to save the banks that sold them. On the other hand, a Los Angeles Times poll shows that 55% of the American public do not believe it's the government's responsibility to bail out these troubled banks. All of this takes place with the background of what former Federal Reserve chairman Alan Greenspan called a "once-in-a-century" financial calamity, and the possibility of financial collapse for one of the engines of the global economy.

QUESTION: What would you do if you were in a position to decide on the bailout? Is the situation so bad that you'd give out that much money, or would you leave the banks to fend for themselves regardless of the consequences for the U.S. economy? Do you have a better solution than the one Congress is about to sign off on?

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borgseawolf wrote:
Sep. 29th, 2008 08:14 am (UTC)
I was wondering on another question: what would YOU do with $700,000,000,000 ? End poverty in Africa? Bring peace to Middle East? Give $100 to every single person in the world (and in some places that's half a year's worth of life) ? Give a medium-sized European nation 10 tax-free years?
izuko wrote:
Sep. 29th, 2008 10:07 am (UTC)
Give it back to the taxpayers.
(no subject) - borgseawolf - Sep. 29th, 2008 10:11 am (UTC) Expand
(no subject) - izuko - Sep. 29th, 2008 10:18 am (UTC) Expand
(no subject) - pennyann - Sep. 29th, 2008 07:42 pm (UTC) Expand
ilthit wrote:
Sep. 29th, 2008 08:40 am (UTC)
I'm not an economist so I couldn't decide whether that's actually the thing to do or not. If I was, I'd want to know who exactly benefits from the care package. If, indeed, it keeps the country's economy from a 1929-type crash, I'm all for it, and would be even if I was American. I wouldn't mind slightly higher taxes to compensate for the package if it means preventing a depression that would affect everybody. I'm not, however, entirely sure that rotten mortgage banks should be artificially revived; shouldn't you rather bail out their customers and employees and then let the corporations die?
putyourendtowar wrote:
Sep. 29th, 2008 08:58 am (UTC)
bail for jailbait? they are out on bail now... !!!
tell you what i'm gonna do... let's round up a posse and get them varmints that took the gold out of our mints and try them for treason and hang 'em by the proverbial neckties they're wearing. this is a simple bank robbery by the bush gang and nobody in dodge wants to believe it, so they're hopin' the next sheriff will save them from the next bank hole. that's what wyatt earp did. aw hell, they're all crooked! let's start our own bank...

support your local credit union
pyetw
izuko wrote:
Sep. 29th, 2008 10:10 am (UTC)
Re: bail for jailbait? they are out on bail now... !!!
Then let's toss Chris Dodd, Barack Obama, and Barney Frank on the same pile, along with Henrey Paulson.

If you want to know how we got here, look at Sarbanes-Oxley and the Community Reinvestment Act.
Re:gards rebuilding america - putyourendtowar - Sep. 30th, 2008 04:49 am (UTC) Expand
janet_prime wrote:
Sep. 29th, 2008 09:33 am (UTC)
Giving the taxpayers equity against any of those loans eventually being paid off helps some. But I'm old enough, I remember the stories my parents and grandparents told about surviving the depression in the thirties -- and every guru I've seen on TV seems to think this is indeed that bad. It took this kind of radical action to allow the average worker to survive that until ramping up to build material for WWII lifted the depression in '39. I strongly prefer to take such actions BEFORE it crashes completely.

Which is not the same as saying I like either the situation or any reasonable 'fixes'.
letitshine wrote:
Sep. 29th, 2008 10:25 am (UTC)
I would start from the federal reserve and the bad loan payers. I would help those people refinance or work out a deal to pay less until they can sell, thus profiting little to none and allowing all involved to break even.

The fed res bank has an unfair and ill equipped system that needs assessment and change. It is the cause of the inflationary bubble burst and it immorally plays to the disadvantage of the poor while allowing the rich to prosper from their losses.

I would then instate a committee to assess the fed every 6 months until things are in order. From there on, an annual report to the people of the US and our elected officials. I'd also help people learn how to protect themselves in a confusing market while contributing and profiting as well.
izuko wrote:
Sep. 29th, 2008 11:29 am (UTC)
Really, the fed, itself, is an anathema to the way our system was organized. Unelected, unaccountable bureaucrats with government power. Oh yeah, James Madison would have LOVED that. -_-
(no subject) - kwsapphire - Sep. 29th, 2008 01:28 pm (UTC) Expand
farla wrote:
Sep. 29th, 2008 11:44 am (UTC)
Why not pay off people's mortgages?

There may be some economic reason it makes more sense to pay the banks and hold onto the mortgages, rather than, say, paying half of it and then having people refinance. But I find it weird it doesn't even seem to be mentioned.

It's true we have to save the banks or everyone will get hurt, but the true focus seems to be to save the banks period, regardless of if it harms the rest of the country. Most of the details don't really add up. Unless there's some economic reason it's vital to the country that CEOs get gobs of money for destroying their companies and forcing the bailout. Or that a reverse auction will work better if you ask for a ton of money first and then tell the banks you'll pay whatever price they ask. Or that there's a good reason it has to be completely unreviewable besides that it's going to be used in incompetent or illegal ways.
kardoth wrote:
Sep. 29th, 2008 12:51 pm (UTC)
This is exactly what I think they should do with it. From what I understand it would be way more than enough money to pay off every single mortgage. The banks would have the loans paid off and the tax payers would have their mortgages paid. Then, when people don't have to pay their mortgage payment every month, they would have more money to invest in stocks, savings accounts and other things that would help stimulate the economy.
(no subject) - batbuds - Sep. 29th, 2008 01:49 pm (UTC) Expand
(no subject) - farla - Sep. 29th, 2008 04:19 pm (UTC) Expand
(no subject) - batbuds - Sep. 29th, 2008 05:48 pm (UTC) Expand
sorry this is a little late..... - freak2760 - Oct. 3rd, 2008 02:38 pm (UTC) Expand
teensy80 wrote:
Sep. 29th, 2008 12:38 pm (UTC)
I posted my idea on my Journal last week. This post is in a public entry if your interested. It basically said take the "bad" loans retool them using HUD and FHA (existing programs). If Foreclosure isn't avoidable then buy the house and Set it up as a Auto FHA loan house to another family or Rent it as a hud home.

As for the banks we pay the "retooled" price for the Mortgages and thats all they get. In order to participate in the program any fired execs would be charged the bill in the form of Any severance package being forcibly given back and no Severance packages except for Health care benefits for the traditional 6 month time.

In other words Help the common people Help the banks by taking the debt off their hands then letting the banks deal with what they have after that.
wolfwyndd wrote:
Sep. 29th, 2008 01:25 pm (UTC)
Ok, I've got an idea (and an opinion, of course) and I'm not afraid to share it, for right or wrong. Here's were I'm coming from. I'm an American. Born and raised in America, but I've been LUCKY enough to be able to travel overseas on occasion. I'm married, two children still living in the household, two dogs, two cats, white picket fence. Oooooppps, wait, it's a chain link fence for the dogs. But you get the picture. I'm also NOT an economist. Just the opposite actually, my wife handles most of the bills because I can barely balance my checkbook. My wife and I were foolish enough 5 years ago to sign up for an ARM (adjustable rate mortgage) when we bought our house. We also missed the cut off to lock in a rate when the rates were good because we thought they'd get better. They didn't. Two years ago we had our house apraised at 140K. We attempted to refinance two months ago and it appraised at 103K. We did nothing. Actually, I can't say that, we finished one of the rooms in the basement for 5K. My wife and I both work and we make decent money. We have, basically, been both steadily working hard for over 5 years with the only changes in our income is our yearly raise.

With all that being said, we're about 1/2 step from declaring bankruptcy. Why? Because our mortgage company 're-evaluated our mortgage rate' and we're suddenly paying over 100.00 MORE a month then we were two months ago. We've cut just about every expense so that we're down to the bare essentials. IE, mortgage, utilities, phone, groceries and assorted credit card bills. In the 5 years since we've had this mortgage it's done nothing but nearly double.

So here's my idea. Rather then this be a 'top down' proposal, why not make it a bottom up? If we give the BANKS the 700 billion dollars all they are gonna do is squander it away like they have been doing. Why don't be take the 700 billion and give it to the same people that got the 600.00 (or 1200.00) tax rebate over the summer and let the tax paper pay his mortgage? For people that don't have mortgages they can pay their credit card bills or other debts.
kwsapphire wrote:
Sep. 29th, 2008 01:25 pm (UTC)
I've heard some excellent ideas such as giving low-interest loans to banks and other companies who need it. Instead of just buying bad debts outright, this would give them the cash influx that they need, while still promising returns to the government (and therefore hopefully the tax payers). I do not believe we should just buy the bad debts outright, I think it's a horrible idea that shows investors that they can make bad decisions as often as they want, and if they're heinous enough the government will bail them out.
gregorykennedy wrote:
Sep. 29th, 2008 03:29 pm (UTC)
The bailout is extremely frustrating and unfair, but then again life generally is. As someone who pays their mortgage on time and has all his finances in order it's tough to feel sympathy for anyone that is caught in the sub-prime mess.
wolfwyndd wrote:
Sep. 29th, 2008 05:14 pm (UTC)
Guess who's next? YOU.

I paid my mortgage on time and HAD all my finances on order until my bank decided that I needed to pay more money to them.

Believe it or not, I understand your disgust. Until 2 months ago, I'd have totally agreed with you. The problem is it's not just the people who got caught up in sub prime mortgages, but everyone ELSE is getting dragged into it now. The sub prime mortgage was the stone that started the ripple, sooner or later the ripple is gonna affect WAY more people then just the sub prime people.
rhyannon wrote:
Sep. 29th, 2008 03:55 pm (UTC)
Stop investing in the banks and start investing in the people themselves. Give them the $1Trillion to get themselves out of debt so they're not paying interest but actually paying principle, can actually pay forward and get out of debt and invest in themselves and their futures. Once the people are more financially stable, they reinvest in the banks/economy making it more stable without the government throwing even more good money after bad and then adding more taxes. Those of us that live paycheck to paycheck (even without a mortgage), would greatly appreciate them thinking outside the box, not that I expect them to do so since it's not in their best interest and life isn't fair.
adamwolf wrote:
Sep. 29th, 2008 05:38 pm (UTC)
To give you a very simple example of how far-spread this crisis is: I'm Belgian. My dad works for AIG Europe, and has a hospitalisation insurance through his firm. That means that if he were to lose his job (due to bankrupcy or a take-over and subsequent reorganisation), he would also lose that insurance policy. Now, my dad has lung cancer. He needs chemo therapy, and my parents are paying that through the insurance. Without it, we couldn't affort the therapy (this is in a country with very good public health care).
If AIG had not been bailed out two weeks ago, my dad might not be receiving his chemo next week.

I hear all these grand theories, but it's not about ideals. It's about real people. And those real people are not just the COE's, they're all the people involved one way or another. This 'American crisis' is having a lot of effect on the global financial market.
batbuds wrote:
Sep. 29th, 2008 07:58 pm (UTC)
I agree with you... this is a global issue and one where global economic collapse is possible.

The sad part of this is that it seems to be basic human greed at the corporate AND consumer level that has led us to this point. If people (those who have lost their job do not fall into this catagory by the way... they are exceptions and in a situation that is unfortunate to say the least, as I have been there and done that) would consider their means and ability to pay debt before taking on and signing obligations; and financial institutions would be more judicious about issuing consumer loans; there would be much less bad debt paper floating between investors... but greed (consumer and corporate) leads people to make poor decisions; it is unfortunate but true.

I am sorry to hear about your dad, and I am thankful that he is still able to get the treatments that he needs. I hope he has a full recovery; I truely do. My brother is a cancer survivor due to good treatment and early diagnosis!
slavezombie wrote:
Sep. 29th, 2008 06:45 pm (UTC)
Magic number 700KKK
It's like an episode of 24 in which terrorists threaten the country with a dirty bomb, and if their ransom (of $700KKK) isn't paid, innocent people will perish. I think the government should get involved. It's like being in a traffic accident with a person who doesn't have auto insurance. No matter how hard you sue them, they can't pay your damages because they don't have any money. Does the court system then pass a sentence to enslave the guilty person?
pronoiacs_r_us wrote:
Sep. 29th, 2008 08:42 pm (UTC)
alternatives exist if we but look
yes, i believe that the situation is dire. yes, i believe that congress needs to act quickly. no, i do not believe the answer lies in the bail-out i've heard described on the news shows (i.e. buying the bad assets of these companies and leaving them with their good assets to go on doing business under the same rules or lackthereof that got us where we are today).

i, like most, believe that the folks who got themselve into this mess with shady business practices should pay the consequences (at least loose their shirt, better if they go to jail) but that the average joe who invested in these companies' 401ks and their many direct employees should be protected, not to mention protecting the national economy from the collapse of these corps that are so huge that their sudden demise would be catastrophic.

so, what should be done? i'm no economist, but it seems to me that the problem is lack of confidence in the market as a WHOLE. it therefore seems that a wide variety of plans could exist that sure up the market without saving the necks of these particular companies that CAUSED the problem.

can't we find some other way to dump some money into the stock market that doesn't save these scum bags?
pennyann wrote:
Sep. 29th, 2008 09:02 pm (UTC)
I am not an economist. I am not in a position to decide on the bailout or offer alternatives. I would however like to see the people who profited on the mess that is causing the rest of us to suffer be made to suffer it too. I know they might not have done anything "illegal" (no one was watching them closely enough, regulations were re-written/done away with that would have kept this from happening, etc.), but MAN it burns me to see someone (anyone) pad their bank account while the rest of us have to bail out their corporation/bank/financial institution. I think there should be some consequence for using predatory practices to meet your quota and get your fat bonus, when a year later it would mean the crash that requires the very people who you preyed upon have to turn around and pay again. I don't know if there is any way to do that; to make those folks pay. But there should be. It is disgusting.

You can't leave the banks to "fend for themselves". They've been fending for themselves for FAR too long. It's not just the predatory lenders in this situation who are to blame, it is people getting in over their heads. But the predatory lenders are in the profession! They should know better than to give someone a loan that can't be paid back (and that they know can't be paid back!). I know that if I went to the bank for a loan or a mortgage, I'd be counting on the loan officer to be straight with me about what I could afford (after assessing my income and debt/other expenditures). You're the professional... you tell me! A lot of people may have known they were getting in over their heads, but a lot of people just plain didn't think that way. They were lured by 0%-interest this, and adjustable-rate that. Many believed there was a way that someone with average income could own a better than average home. Who wouldn't want that? And now, here's this professional telling you that you CAN have it. Bad advice + bad decisions = here we are folks!

But you can't "punish" either culprit without punishing everyone. What if you are a reliable mortgage-paying homeowner whose bank just happens to be the one who has a few bad loans and mortgages (even if not yours)? Do you think they are going to keep your loan safe while the rest go up in smoke? Or if you were a small business owner who has been continually crunched in the economy of high gas prices and were needing a short term loan to make payroll, but now that bank is gone and so is your hope of keeping the employees around because you suddenly can't pay them. Now they can't pay their mortgages either, fixed rate or not. Vicious circle time!

I know that people say we shouldn't bail out people who made bad financial decisions, and I agree... but the problem is that if we don't, we'll be punishing people who DID make good financial decisions whether it is by helping pay for a bailout, or the sudden dry up of credit or mortgages for those who did everything right in the first place. I mean, some of these places had people with sound mortgages, but they will go bye-bye with the bad ones if that is what we let happen.

There isn't a good answer that I've heard yet (at least, from the people that are making the final decision), like many things... it is the lesser of two evils. There are a lot of decent suggestions here, but they based in common sense... and we all know that doesn't see the light of day in the places that matter.

Bottom line is, the government messed up BIG time. Turns out there is a use for government intervention and oversight of the market after all. Lets just hope this gets better instead of worse.
zumayabooks wrote:
Sep. 30th, 2008 08:51 pm (UTC)
How easily we forget
What has gotten lost in all the Chicken Littleness is that there was a reason mortgage lenders were willing to give money to people who otherwise would never have gotten it. The current administration encouraged it. For most of the last eight years, as the economy slowed or, in some cases, came to a screeching halt and jobs were disappearing faster than frost in July, our chief executive was pointing to the "thriving housing industry" as the indication there was nothing at all wrong with the economy.

He built a literal house of cards and it's coming down around all our ears. And not a single person in the media seems to remember, because I've yet to hear it mentioned.

And now, in the dust as those cards settle, the banking industry in this country is slowly falling into the hands of three major financial corporations. I somehow don't think that's a better alternative to government assistance, and it's not arguable anymore that SOMETHING has to be done.
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