Thoughts on the 700 billion dollar bailout?

Surprised someone hasn't made a thread yet about this. Anyway, what are your thoughts? Do you think it would be better if a bailout happened or not?

Personally, I think the whole thing is ridiculous. The Fed is just trying to save itself by once again taking advantage of people's perceptions of whether this is a good thing or not. The media for example.

But I shouldn't say that, a LOT of people were are against it.

 

I think it should have happened since the alternative is even more pricey than the bailout plan.

 

I've kept my ear to the ground with this bailout news. I can't say that i fully udnerstand what all the details entail, but the fact is, the stock market is continuing to fall, banks are looking to merge or go under and either way, the economy is screwed right now.

 

I know I'm not putting any thoughts into this but could some1 tell me whats going on and whats with this hype and fervor about these banks and stuff...

BTW, do they mean bailout as in prisoner bailout or... =/

 

not even close to a prisoner bailout. i'm not entirely sure what's going on as well, i've been watching the news but i just don't understand.

 

Essentially they're using taxpayer money to bail out major corporate debt, saving them.

Or so I hear/understand.

 

Yup, basically. It has a lot of negative press, but in all honesty the banking companies are gambling with your money, so to not bail them out will ultimately cost you more.

 

There doing the same thing over here in ireland to protect all the major Irish banks.

 

The federal reserve printing 700 billion dollars into existence to bailout the stock market would absolutely destroy the United States dollar, and for what? It's nothing more then a short-fix solution being made in the hopes that those 700 billion dollars would be better invested, all it's doing is delaying a fallout and in turn destroying the worth of the dollar and making the prospect of economic rebound much harder to attain.

If corporations invest improperly, then the consequences of those investments need to come to fruition, that's how capitalism works, if your company does something so financially disastrous, then your company needs to die so that another can take your place and not do what you did. The bailout is making it so that corporations don't have to worry about this consequence, because they'll get their buddies in Washington to print out fat sacks of cash and give them a slap on the wrist saying "Don't do bad stuff with the people's money again, ya hear?"

Not bailing out the stock market is going to more difficult in the short term, as in the next 2 years, and people are going to have tough times, but an economic rebound can happen much faster through a natural progression of consumerism. With a 700 billion dollar bailout, the economy is still going to crash, and we're still going to have those tough times, the difference is that we just magically poofed 700 billion dollars into existence and the upper class is fine for it, but we absolutely destroyed the worth of the dollar through inflation, which in the end is only going to make everything we buy more expensive for the next decade, instead of a potential rebound in 2 years.

 

*hopes this isn't a stupid question* but how does any of this affect just regular people?

 

It affects you because you're a consumer; it will cost you significantly more to buy anything anywhere if 700 billion dollars is created out of thin air. In other words, if you were to buy something for 10 bucks, and the FED bails out the corporations, but at the same time increasing inflation, destroying the dollar, it will cost you quite a bit more to buy.

Also keep in mind the only thing that gives the dollar value is how much of it is in circulation, since there is no backing of gold or silver.

Not to mention prices on things like gas, electricity, food, and basic survival necessities will spike, making it even harder for you to handle it. Once again, from the inflation.

The wealthy will be the only ones able to handle this because they have so much money, but the middle class will take this hit much harder due to the fact most people live paycheck-to-paycheck.

 

Its just bad, its awful... Especially if you are a student and trying to pay for rent in university or even the poor poor people who can barely scratch off enough to pay for bills.

I'm doing sociology, so I have to learn the inside out mechanics about this... -_- Next lesson though...
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Basically it's going to be the great depression again.
My family is part of the lower class, so if the bailout does happen, we won't even have enough money to pay the rent of our apartment. I'm just happy with my live now that I can have food on the plate and a computer with internet.

 

Did anyone know that England is going to copy America's moves on getting out of the oppression of the credit crunch?? -_- I heard it in some assembly last week lol at college...​

 

we were talking about that today in 4th period, if anyone had heard about it...

i hadn't heard of it till today, and alot of people are starting to believe we're going into another "Great Depression"

 

2 major banks have already been nationalised. In Europe a major bank had to be bailed out by the governments of France, Belgium and Luxembourg.

This time has been known as the Age of Irresponsibility. The banks need to know that they need to be more careful and that they can't take such high risk ventures just to make a quick buck.

 

ok thanks i see how the bailout woudl affect us. but what about if the government did nothing instead? would regular people still be affected?

 

Thanks for the additional info xD
Now I have an insight on this... I think

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The Bail Out Plan is not just coming up with 700 billion dollars that would be circulated out of thin air, as far as I know. I believe it works more like this:

- 700 billion dollars is an estimate between 500 billion and 1 trillion dollars. The government plans on basically buying out the mortgages on all troubled loans given and then selling them to establishments.

- The 700 billion is basically coming out of a loan itself which -we- the people will pay so that these mortgages move and our system does not collapse. If our system collapses because Wall Street and the banks go belly up, we are in serious doodoo.

- Corporations that are the biggest part of this mess, which isn't the banks themselves but the loan corps Fannie Mae and Freddie Mac are getting 25 billion, or 100 billion each...the news is not clear on this from three sites, to cover their losses. Fannie Mae also covers student loans which many people took out loans on their mortgages to pay for student loans on their children etc.

- The failed loans are affecting us and others on a global scale. Europe and others suffer along with us because of similar problems they have and also money isn't circulating properly as it should. There's a lot to lose globally and we have to monitor that market as well.

Hope that clarifies it a bit more. Is it a -bad- thing? Yes, but it would be worse if we did not come to an agreement and fix these problems. If we do nothing, our banks will go down the crapper and we will have lost a ton of investments, our next president will probably shoot himself in the head and we will be in a Great Depression. Our money will be worthless but to the wealthy who will also receive a sturdy kick in the groin as the dollar drops yet more in value and there just may be no middle class after a while if we don't fix this.

The reason why this happened? Banks and especially places like Freddie Mac and Fannie Mae screwed a lot of people. They made arrangements in loans that after a period of years, mostly 10 years, interest rates on the loans would increase. They also were doing some of these deals with citizens that were not from this area originally and could not speak English well so they were bamboozled. Others took out loans and were also screwed and some parents who have college kids wanted to help them get through it and the interest jumped on them ridiculously too. Also, some people were given loans that could not hope to pay them back because our job market sucks and they lost work when corps moved overseas or shut down due to poor economy and people not buying into their businesses. There are some people that can be outright blamed for approving loans that should not have been or those who tried to get loans without the intentions of follow-thru, but mainly the problem seems to be that these businesses decided to add on ridiculous interest rates which screwed so many people, or the future of the loans became unlikely due to our unstable work issues.

So, yes, it sucks we will have to pay for the mistakes of some people and also because of our unstable work situation. It sucks, but the alternative is much worse and we will still see a decline in things but not as bad as if we do nothing and let it all fall apart. I think negotiations still need worked on and Freddie Mac and Sally Mae should suffer more since other private corps could arise with better ethics to take their place, but at the same time if we have to pay for it, you know, maybe we the people will stand up and demand that these corporations and banks must follow a better line of judgment and abolish these interest rates that are ridiculous. People are now forced to leave their homes because they can't cover the costs. It's ugly all around. As much as I hate to cover the corporations' asses for being stupid, or pay for execs, which I think should be investigated as well and lowered and is an issue in negotiations now, we do need to see that the Bail Out Plan, when revised, is possibly our only route to take at this juncture.

 

The only difference is that congress is trying to agree with the FED on the bailout by the vote.

If in fact the government did nothing and we couldn't come up with a solution, the dollar would suffer a lot in the short run, but in the long run it would slowly patch up. The international bankers can't just let it settle. That would be like the great depression.

Whether they take action or not, we still end up in the hole. But it depends on which option is the worst one. This bailout is a temporary fix.. for like a week. Then the long term effects will kick in and the dollar will collapse.

Actually Repliku answered your question in much greater detail. Read his. XD