Experts See a Need for Punitive Action in Bailout

finance.yahoo.com...

As economists puzzle over the proposed details of what may be the biggest financial bailout in American history, the initial skepticism that greeted its unveiling has only deepened.

So, economists say its bad. The American people, especially those like me with debt, are getting pissed. Why can't I have 200,000 to pay off all my debts? Unlike the people Bush wants to give 700billion dollars to I don't have a private jet, 10 Mansions, or ten million dollar cars in all ten garages at each house. I actually could use it while the people getting our 700billion in tax money don't. They could easily sell a couple Mansions, pull money out of their Swiss Bank accounts.

Most of us are so angered and confused by this that we don`t even know what to say. Thanks for saying it for us. Lets ALL reply to this thread and make it huge to say we want accountability- and our share of the loot

reply to post by GordonJQ


I loved this snippet too..

"There's a tendency for people to think these are stocks and bonds and you know what the price is," said Bruce Bartlett, a former White House economist under President Reagan. "The problem is people are operating in a world in which nobody knows what the hell is going on. There's some naïve assumptions about how this would function."

If Mr. Paulson pays the market rate — whatever that is — that presumably would not be enough to persuade banks to sell. Otherwise, they would have sold already. For the plan to work, Treasury has to pay a premium. "It's a straight subsidy to financial institutions," said Martin Baily, a former chairman of the Council of Economic Advisers in the Clinton administration, and now a senior fellow at the Brookings Institution. "You're essentially giving them money"

No Duh

And now more information on the situation.
biz.yahoo.com...

Hopefully they don't give Billionaires Billions of dollars. Could you imagine it? BILLIONAIRES getting BILLIONS of dollars. I'd much rather have that 7,000 dollars given to me to help with bills then help a Billionaire fill up his Private Jet.

most propably though that is what will happen - the money will go to those who can do without.

And the normal tax payer will have 2 pay more tax to re-imburse the governments funding causing more people to loose their house ...

I personally think that the democrates are correct in wanting to have the answers to questions as those before signing Buch's bill on this

I suggest the guillotine for the elites that got us into this mess.

As for the government, I still say we photocopy some cash and use the copies to pay for our taxes. Printing money always works doesn't it?

[edit on 24-9-2008 by wutone]

The deceiving part of all this is, that 700 billion dollars is only what the federal reserve will write on their books at any given time.

Meaning that the bill could be trillions of dollars but all they will account for is 700 billion dollars.

Then to make sure that nobody knows how much tax payer money is use, they will stop anybody from looking into the books.

How convenient and guess what I am DARN ANGRY AND UPSET ABOUT TOOOOO

As should be any hard working tax payer in this nation.

BTW the bail outs will not be limited to only financial institutions and guess what we will never find out either who are the "others" to get the bail out.

Because we can never be able to question their shady, dirty and corrupted deals.

A proposition like this should be treated as treason against the American nation and its citizens.

reply to post by wutone


Or the family (all inclusive) of these guys, saving them for last; a deterrent
for others in a situation to take advantage of status/position to rape the taxpayer.

Folks, some great points have been made. However some things need to be cleared up.

First, for the most part, the goverment will not being paying more than the mortgages are worth. Currently the market value is way below the true value (underlying property values) of these loans. The goverment will be paying somewhere between the true value and market value. They will be able to resell them at or near Real value as well. They just need to kick start the market so that these instruments trade at fair value instead of the current depressed market values. The goverment will not lose money on this program!

The whole concern to me is what happens to these loans after the goverment buys them. The plan is now that they will resell them after the market has shored up and the underlying real values rise. They will be selling them to big money interest on the streets. These interests will get a discount to the increased real value as the goverment will accept making little profit to help their friends. They will hold them for a while until values rise further and then they will resll them at a huge profit. Real estate values will ahve risen so that they can now foreclose andsell theproperty for more than they paid. Good loan or bad loan these guys will feast on excessive profits from this program and the homeowners will still be in their same crappy situation with a huge upside down mortgage. Nothing has really exchanged exceptthe fat get fatter.

Instead after the goverment buys the loan they should go straight to the homeowner and refinance it at the price the goverment paid plus any costs of running the program. For the most part, folks in these crappy mortgages would be able to afford a mortgage 30-40% lower and lower the risk of future default significantly. These loans could then be sold to investors and the govermnent recoops their money back.

This is the only solution that adresses all the concerns of this huge problem. Banks get bailed out, the goverment ends up losing no money or even making some, the homeowner keeps their house and is freer to repursue the American dream boosting the economy, and the investor class gets some solid mortgages in which they can invest.

It all makes perfect sense! Why is no one talking about going in this direction? Please, someone tell me why this would not work?

reply to post by disgustedbyhumanity


That is fine and dandy for those whose mortgage is in the pile of crap. For the others, property values decrease.. to whose benefit? NOT the homeowner who is currently not in trouble...instead, it hurts those of us who have property as an investment. Not fair.

Originally posted by Chakotay
Most of us are so angered and confused by this that we don`t even know what to say. Thanks for saying it for us. Lets ALL reply to this thread and make it huge to say we want accountability- and our share of the loot

I want accountability, but why am I entitled to any compensation or any of the rest of you for that matter? How have you personally been hurt by this bailout package? If your home lost value, chances are the value was over-inflated to begin with. Got a home in California, Washington, New York, Washington D.C., etc? Then you know what I'm talking about.

Secondly, why should people who wanted homes, yet knew they could not afford to make the payments, be bailed out? Why should they be entitled to keep their homes when they were just as greedy as the predatory lenders who wrote up the ARM fine print?

What I want is accountability all around on this bailout. Executives should not be getting bonuses, period. If they get a severance then it should be no more than wha fraction of what the president makes per year, which is $400,000. This business of giving millions in bonuses is utter BS.

But I also want greedy borrowers who bought a home and knew they couldn't make the payments to be held accountable as well. The government shouldn't be paying their mortgage or providing them with a new mortgage just because the ARM that they didn't read before they signed got too high to pay.

Greed, greed, greed all around. That's what's killing this country, and it all starts with people saying "we want our share of the loot".

reply to post by sos37


So, if you're a billionaire, you deserve a bailout, if not, you're screwed? How does that work? Why not make the Billionaires sell a few Mansions and private jets before "bailing" them out? Wait, because they are friends with Bush & Co.

I'm watching CSPAN. Congress is questioning some people from the Budget Office.

One question was asked: How do we know that $700 billion is the right number?

Answer: "We don't".

What really makes me mad is the government could not even give those who made less than three thousand dollars an economic incentive package of a few hundred dollars. Yet they can bail out bankers for 700 Billion. Even foreign banks are getting in on the bail out. I heard that for only 100 Billion they could have bought off all the mortgages held by the troubled banks. I say bail out the little guy with the mortgage and let the greedy bankers suck air.

VOTE ANYTHING BUT DEMOCRAT OR REPUBLICAN THIS ELECTION.

[edit on 9-25-2008 by groingrinder]

Thankfully the Democrats pressured them to add things like caps on CEO pays and setting aside some money for the little guy. Its not enough if you ask me. They should DEMAND that the Billionaires sell their Private Jets, Mansions, Million dollar cars, Yachts, jewelry, so forth first. Then pull money out of their Swiss Bank Accounts. Then look over and see if they really need that 700billion.