Wow – 700 Billion! How many zero’s is that anyways? $700,000,000,000…well let’s just say it has more zeros than I’ve ever seen.
The question however is – Will this help?
The short answer…Yes!
Don’t get me wrong. I’m not in the habit of saying – “let the tax payers bail out the fat cats.” In fact I hate the fact that we have to bail-out greedy Wall Street fat cats that are supposedly smarter than you and I.
I am also concerned about the fact that we are rewriting our financial laws at such a turbulent time. From experience, we tend to overreact in situations like this and heavily-lobbied lawmakers tend to take advantage. I do love the American way – Capitalism. But are the new financial laws going to over-regulate the markets and move us closer to socialism? I know some of you like that word, but it worries me.
By the way, where are we getting the money from? Do we have it sitting around in some huge taxpayers’ checking account?
Nope! We have to borrow the money and add it to the debt we have already accumulated. Who keeps loaning our government that kind of money and can I get a loan? The Chinese and World Banks must have some amazing faith in our government’s ability to repay. We should all strive to earn the credit rating our government has. I’m not sure if it’s deserved, and I’m hopeful one day our politicians might choose another option than to put us and our children’s children in greater debt.
In my estimation this isn’t a bail-out of the fat cats on Wall Street, but a bail-out of the American people. Most lawmakers understand, if something isn’t done ASAP our entire financial system may fail. Yes, it’s that bad…or at least that’s what they are telling us.
I’m not excited about us dropping into a 30′s style depression right now. I missed the first one and I am hoping to dodge this one. So I am giving our government the benefit of the doubt.
But let’s look at the actual situation. What the government is talking about is purchasing 700 billion in complex Wall Street securities. Currently these securities have zero value, because of the sub-prime mortgage collapse.
Let me explain the zero value. No one knows what percentages of these securities are tied up in bad sub-prime loans. Therefore they can’t put a value on them today. So these securities do have value, but until things play themselves out – no one knows exactly how much. Unfortunately, the Wall Street institutions holding these securities can’t wait, because all the uncertainties are causing them to fail right now.
So the government is purposing to buy these securities and hold them until they can be valued. When the housing market recovers and depending on how the securities perform… the tax payers may even make some money out of this. I’m not holding my breath for that scenario, but I am hopeful we will make a chunk of our investment back and in the mean time save our way of life.
Here is the effect this bail-out will have on normal people like you and I and our credit. This will free up money for the Investment Banks to put into our economy. That will put you in a much better situation to refinance your house, get a car loan, or to get a new credit card and keep the economy going. That is why you need to work on improving your credit. So when you need the credit, you will get the favorable rates you want. I am hopeful some of you will use the free advice I provide on how to improve your credit.
I feel obligated, at this point, to give you a Public Service Message. Do not bury yourself in debt like our government is doing.
I’m not sure if this bail-out is the best options available, but because of the circumstances I am supporting it and crossing my fingers…all of them.
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actually your wrong about getting a loan from other govments, true we will have to foot about $2300 each but what people don’t understand is that in order to do this the government would have to do something that would give us a short term boost but a long term struggle, what’s that you ask? It’s called putting ink in the machines and turning them on!! That right!! They will print more money so to speak. They will do it and put it into bonds. Now by adding 100′s of billions of cash to the U.S would completly destroy our economy!! It think about it! It will add 700 billion to America. Use this example. If u have money you will spend it, right? You might save it but eventually you will spend it. There is a certain amount of money that continualy circulates between hands in America. For each new printed dollar an old one is burned. This keeps balance in our country. Now if we add an aditional $700 Bill that’s $2,333 for everysingle one of 300 mill Americans. Now this would be the altirnative. You decide.
I have to overwhelmingly disagree with your support of the bailout. You state it is a bail out for the American people but the secretary of treasury Henry Paulson does not want to include any stipulations for helping homeowners. This is an absolute bail out of Wall Street. Fear is being used against the American people to force them into accepting this economic plan. And why the urgency to get this passed in a week? You’re telling me the banking system and American economy is at risk of totally collapsing and there were no signs up until 2 weeks ago. You’re telling me these Wall Street guys didn’t know that the practice of over leveraging was going to be disastrous?
You mentioned hevily-lobbyed lawmakers take advantage and you’re right about that but not in the sense that you mentioned. The lobbyists pushed for more de-regulation which is the direct cause of this mess. Look up Phil Gram and his “Commodity Futures Modernization Act”. Amazingly they are talking about more deregulation. How can you in good sense talk about regulation as something “scary”? I don’t believe in socialism and unchecked capitalism is disastrous and the proof is in the pudding. If you support this American way of Capitalism and Free Market ideas with no government oversight then Wall St. shouldn’t ask for a helping hand once they realize this ideology is seriously flawed. A mixed economy is the answer. Balance.
Amna – I fully agree – greed is human nature but that”s why laws (regulation) are required to keep it in check.
The “free” market globalism must be reversed – it can be if enough americans have the foresight and will.
We need to get our factories back over here, hiring Americans only and at good wages and restore and protect our way of life and let the rest of the world do theirs anyway they want to.
The 1775 revolution at one time was only an idea in one person’s mind – so an idea is very powerful.
Some will call it protectionism – let them
Some will call it isolationism – let them.
We’re not withdrawing from the world – we’re just insulating our way of life from internation speculators and institutional and other investors.
If our bailout was of such interest that the European Union and Angela Merkel of Germany pushed HARD to get it passed – it only shows how far the tenancles of globalism have reached into America.
Free markets is globalism and we need to get back to regulating greed and keep it in house too – so we can.
Thanks for your post.