News:

Welcome to week4paug.net 2.1 - same as it ever was! Most features have been restored, but please keep us posted on ANY issues you may be having HERE:  https://week4paug.net/index.php/topic,23937

Main Menu

$$$700 billion right out of taxpayers pockets

Started by Ri©h, September 21, 2008, 07:25:13 PM

Previous topic - Next topic

0 Members and 1 Guest are viewing this topic.

keeb333

Quote from: rowjimmy on September 24, 2008, 03:46:46 PM
Try this on for size...
http://www.cnn.com/video/#/video/business/2008/09/24/am.lawrence.savings.safety.net.cnn


I've said it before, and I'll say it again:

The entire banking industry is a complete scam designed to make the bankers rich!

I mean come on, if some guy walked up to you and said "give me all your money", we'd call that being robbed.  Yet, somehow, we've all been convinced to voluntarily give up all of our money over to the "banks" to hold for us.  Oh, and by the way, while they're holding it for you, they're going to lend the same money out to five different people and charge "interest" to them.  This "interest" is creating wealth out of thin air.  It is purely a mathematical construct that benefits the bankers. 

Show me a physical process that works in the same way.  You can't, because it would violate the laws of conservation!  Yet, for some reason, banks do this everyday! 

I feel for the poor woman in the video.  Why should the government step in to save these Wall Street assholes who made bad decisions that are now affecting the rest of us, when they won't step in to save Joe Peon in the same situation?  Will the government bail ME out if I default on my student loans?

Why should I have to pay for people who bought bigger houses than they could afford and are now loosing them?  My wife and I were smart enough to buy a smaller house, because it was what we could afford.  Sure, we're cramped as hell now (we only had one child when we bought our 3-bedroom, 1 bath starter home, and now we have 3), but we're not in any danger of foreclosure.  Hell, we've even still got equity because a) we didn't fall into the trap of taking out a home equity loan, and b) our house is still worth more than we owe on it. 

Yeah it sucks that a lot of people are getting screwed, but we did it to ourselves by trusting in the banking system.

Ri©h

Quote from: rowjimmy on September 24, 2008, 03:46:46 PM
Try this on for size...
http://www.cnn.com/video/#/video/business/2008/09/24/am.lawrence.savings.safety.net.cnn


I watched that this morning.  I feel really sorry for folks that have to go through that kind of dishonesty.  Me, I'd be out for blood if someone stole $20K from me. 

Marmar

*correction*

....we did it to ourselves after being brainwashed by the corporate media that we should trust the banking system.....

"now's the time to buy!"

"the housing market has hit bottom"

"flip this house!"

"take out a home equity loan"

and so on and so on....

money that exists only on a computer screen is not real money...and that's all the fractional reserve banking system is....digits on a screen that come from thin air.....
Who's the Marmar? I'm the Marmar!!!

Phish doesn't write beautiful music...the beautiful music happens after the written parts.

<gainesvillegreen> now, if they could get their sound to be as good as the lights, we'd have a band hee-yah!!

Music is what feelings sound like.

gah

Quote from: Rich on September 24, 2008, 04:43:21 PM
Quote from: rowjimmy on September 24, 2008, 03:46:46 PM
Try this on for size...
http://www.cnn.com/video/#/video/business/2008/09/24/am.lawrence.savings.safety.net.cnn


I watched that this morning.  I feel really sorry for folks that have to go through that kind of dishonesty.  Me, I'd be out for blood if someone stole $20K from me. 

I feel for that person too, and yes, the bank did "steal" it in a sense, but at the same time, not really. Cause that's what the FDIC insured thing is, up to 100K. They had 120 between them, they got their 100K back. It definitely sucks, and I'm not one to make excuses, but as consumers I think we just have to be smarter. In the same way that keeb was saying he bought a home he could actually afford, and not take out a loan with bigger eyes than what their wallets could pay for. Yes, there was dishonesty, but as consumers we just need to learn to start to read the fine print from now on and know that no one has our back, not even the government, they're more concerned with keeping the industries, and their cohorts, in business.
Sometimes we live no particular way but our own.

susep

I love how this Administration's track record is creating a major disaster and then asking for trillions to fix it.  I don't blame the dems for wanting to analyze any proposals.  We don't need more blind legislation ala the Patriot Act.

Could these economic realities lead to a new currency for the western hemisphere, the Amero?

Hicks

Quote from: susep73 on September 26, 2008, 07:06:06 PM
I love how this Administration's track record is creating a major disaster and then asking for trillions to fix it.  I don't blame the dems for wanting to analyze any proposals.  We don't need more blind legislation ala the Patriot Act.

Could these economic realities lead to a new currency for the western hemisphere, the Amero?

hmmm, I dont think there's much more stability to be gained by joining forces with Mexico and S. America unfortunately and Canada's economy is relatively small.
Quote from: Trey Anastasio
But, I don't think our fans do happily lap it up, I think they go online and talk about how it was a bad show.

mattstick


Canada would have to give up too much in the way of natural resources, and get almost nothing significant that we don't already have in return.  Not interested.

gah

Agreed. I don't see why any country would want to join economic forces with this mess.
Sometimes we live no particular way but our own.

shoreline99

Quote
Smart people do their math before leasing a car, buying a home, or taking out a loan. So how come the same basic sense is getting left out of this debate about the rescue package?

A lot of what you're hearing is very misleading.

Take that "$700 billion" price tag with a gigantic pinch of salt.

Let's assume Hank Paulson gets his $700 billion appropriation. Let's assume he then spends it all, immediately, buying up the financial toxic waste that is rapidly destroying the banking system.

How much would that actually "cost" taxpayers?

The Federal government pays just 4.34% interest on long-term, 30-year loans. So the government could borrow this money for 30 years at a cost of just $30 billion in interest per year.

To put that in context, that is about one-fifth of 1% of our gross domestic product. One-fifth of 1%.

We've almost certainly lost many times that just in the dithering, flapping and populist posturing over this rescue package. And if we don't get a rescue package, we will probably lose a lot more.

Obviously, the story doesn't just end with the interest cost. When you take out a loan, you've got to be able to repay the principal in due course as well.

Let's take a worst case scenario. Let's imagine Uncle Sam borrows $700 billion to buy these assets and never gets a single penny of it back. Let's imagine this paper ends up completely worthless. So instead he has to tap taxpayers to pay off part of the principal every year for 30 years, until the loan is all redeemed.

How much would that cost per year?

Try $42 billion. That's the interest and principal repayment.

That's less than one-third of 1% of our annual gross domestic product. That's the true, annual cost of this bailout. Not $700 billion.

And that's the worst case scenario. That's assuming Uncle Sam never gets back one penny on these assets. In reality, the Treasury will certainly get some of its money back and will probably get most.

It may even make a profit. Someone with deep pockets, the ability to borrow long-term money for just 4.34%, and the expertise to analyze today's distressed mortgage market could make an absolute killing here.

http://online.wsj.com/article/SB122245659564179649.html
Quote from: rowjimmy on August 25, 2015, 11:19:15 AM
You're entitled to your opinion but I'm going to laugh at it.

antelope19

Just got this in an email:
Quote
How come our politicians cant figure it out.............


I'm against the $85,000,000,000.00 bailout of AIG.
 
Instead, I'm in favor of giving $85,000,000,000 to America in a "We Deserve It Dividend".
 
To make the math simple, let's assume there are 200,000,000 bon-a-fide U.S. Citizens 18 and older.
 
Our population is about 301,000,000 +/- counting every man, wo man and child. So 200,000,000 might be a fair stab at ad ults 18 and up.
 
So divide 200 million adults 18+ into $85 billon that equals $425,000.00.
 
My plan is to give $425,000 to every person 18+ as a "We Deserve It Dividend".
 
Of course, it would NOT be tax free. So let's assume a tax rate of 30%.
 
Every individual 18+ has to pay $127,500.00 in taxes. That sends $25,500,000,000 right back to Uncle Sam.
 
But it means that every adult 18+ has $297,500.00 in their pocket.  A husband and wife has $595,000.00.
 
What would you do with $297,500.00 to $595,000.00 in your family?
Pay off your mortgage? Housing crisis solved.
Repay college loans? What a great boost to new grads.
Put away money for college?  It'll be there.
Save in a bank?  Create money to loan to entrepren eurs.
Buy a new20car?  Create jobs.
Invest in the market? Capital drives growth.
Pay for your parent's medical insurance?  Health care improves.
Enable Deadbeat Dads to come clean? Or else.
 
Remember this is for every adult U S Citizen 18+ including the folks who lost their jobs at Lehman Brothers and every other company that is cutting back, and of course, for those serving in our Armed Forces.
 
If we're going to re-distribute wealth let's really do it.  Instead of trickling out a puny $1000.00 economic incentive (vote buy) that is being proposed by one of our candidates for President.
 
If we're going to do an $85 billion bailout, let's bail out every adult U S Citizen 18 and over.
 
As for AIG?  Liquidate it.
Sell off its parts.  Let American General go back to being American General.  Sell off the real estate. Let the private sector bargain hunters cut it up and clean it up.
 
Here's my rationale.  We deserve it and AIG doesn't.
 
Sure it's a crazy idea that can never work.  But can you imagine the Coast-To-Coast Block Party!  How do you spell Economic Boom?
 
I trust my fellow adult Americans to know how to use the $85 Billion "We Deserve It Dividend" more than I do the geniuses at AIG or in Washington DC.
 
And remember, my plan only really costs $59.5 billion because $25.5 Billion is returned instantly in taxes to Uncle Sam.
 
Ahhh...I feel so much better getting that off my chest

Personally, I'd want to be like Tyrone Biggums and throw a 280k crack party!!!!!   :-D  How would you spend yours???

Quote
Good judgment comes from experience, and a lotta that comes from bad judgment

rowjimmy

Funny.

I'll admit that I don't understand the direct repercussions of AIG going bankrupt but, I suspect that whomever wrote that email doesn't either.

sophist

Quote from: rowjimmy on September 29, 2008, 09:53:43 AM
Funny.

I'll admit that I don't understand the direct repercussions of AIG going bankrupt but, I suspect that whomever wrote that email doesn't either.
AIG is like many insurance/annuity/mutual fund/bond or stock firms- essentially money is given to a rep from clients and invested in one of those categories.  The concept being to diversify the risk and maximize the return for the client.  Like many financial firms, AIG's options were weak versus the industry averages and as a result they failed.  Money was lost and clients were left without investments or insurance.  Essentially it is the same thing as money being burned, it is gone into thin air.  The filing of bankruptcy puts a burden on our macro-economy, as we now have a deficit to fill.  The failed financial policies serve as a red flag that those respective investments were weak and leaves us vulnerable to domestic or foreign arbitrage.  The "loan" from Uncle Sam fills that void, so think of it like a mulligan in golf.  AIG clients didn't lose their money or investment, and the market isn't responsible to compensate for the failed corporate policies of AIG. 

The author in that piece is arguing that by direct wealth redistribution the individual would make smarter investments than AIG would with that money.  Thus keeping market perpetuation in the right direction: growth.           
Can we talk about the Dead?  I'd love to talk about the fucking Grateful Dead, for once, can we please discuss the Grateful FUCKING Dead!?!?!?!

rowjimmy

I understand what you wrote but I don't think you are answering my query which was, "What would happen if AIG were allowed to fail?"

You don't have to provide the answer, I can look it up later.

I will say that I could sure use $595,000 right about now. It'd sure but a dent in my debt.

sophist

Quote from: rowjimmy on September 29, 2008, 11:54:05 AM
I understand what you wrote but I don't think you are answering my query which was, "What would happen if AIG were allowed to fail?"

You don't have to provide the answer, I can look it up later.

I will say that I could sure use $595,000 right about now. It'd sure but a dent in my debt.
I apologize for that, to answer your question.  Many, many, many, many people would be without financial or insurance needs, thus exposing the public to massive risk.  It would force the economy even more downward. 
Can we talk about the Dead?  I'd love to talk about the fucking Grateful Dead, for once, can we please discuss the Grateful FUCKING Dead!?!?!?!

rowjimmy

So the plan did not pass the house.

The Dow had tanked. At one point it sagged 800 points down before a brief rebound. it now down only 500 points.
Holy crap.

The brief, big, swings in the market are due to short term speculators but, overall, this is not good news.