Bailout question? What's it for?

[Burgold]

Okay, this may belong in one of the other bailout threads, but it's something that is bugging me and I think it is sideways enough to stand alone.

Here goes.

Okay, the original bailout was to have two purposes as I understood it. Too help with the mortgage crisis and to free up the credit market and get banks lending again. Right? Well, the mortgage crisis hasn't seemed to be addressed and as to lending. Why aren't the big three automakers using the original bailout money? I mean if the point was to give money to the banks and financials so that they could be loaning and lending again... why are the big three coming to the government and not the banks which are supposed to be freed up again?

I realize one bank probably couldn't handle this kind of loan, but several might. More, isn't this really the point of the whole bailout? So, that financials could produce loans for businesses and corporations so that they wouldn't fail, so that they could meet payroll, etc.

If that original 750 billion wasn't for dealing with bad mortgages and it wasn't for easing the lending, credit crunch. What in the hell was it for? What kind of insane con job and crappy deal did Paulson and Congress put together?

[SkinsOrlando]

Nobody knows and they won't tell.

**** congress

[Fergasun]

Think of it like laundering money to the banks. When you look at all of the Federal Reserve and Treasury programs going on now to launder the money the TARP is but a pittance. Don't you see who Congress and Treasury work for?

I've heard a bunch of BS regarding the bank bailout. I don't know why we need to bail them out. You see, the argument is that "without banks our economy will die". But the banks are really bankrupt (no, I'm not kidding) and it's only with them suspending accounting rules and hiding garbage on their balance sheets and bringing their garbage to the Federal Reserve (look up "discount window") can they survive. TARP was just another way for them to shore up their balance sheets.

A better plan would've been to be honest about the banks and let them fail. Then have the government recapitalize the good banks (the real good banks, not just the "too big to fail" banks). I don't know why some people on the right believe saving bankers is a good idea, they are the ones whose shortsidedness let us down this path.

[Special K]

Well, we were "told" one thing. However, nobody knows what the hell problem that money is supposed to be alleviating anymore...not even congress. In it's usual fashion, big government ****s up everything it touches.

In brighter news, the government is poised to dole out a hell of a lot more of OUR money to inept leaders...and that's just a smidgen of the amount of money they are going to ultimately need to remain "viable." Absolutely ridiculous.

Seriously, I have never been this pissed off with the ineptitude of our government.

But I'll take heart in knowing that when I eventually become an important manager in the workforce I can sit on my ass, display blatant ineptitude in my area of supposed expertise, and when I send my company to hell in a handbasket I'll be able to get bailed out for my idiocy. That's cool though, takes the pressure off of worrying about those minor little details like how competently I'm doing my job and stuff...

[chaddukes]

What is it good for?

Absolutely Nothin!

Say it Again!

[wilsonian]

The bailout's purpose is to reward mistakes and bad management. I say, let 'em fail! Every last one of 'em!

[ChocolateCitySkin]

none of it makes sense.

[chaddukes]

Nothin' but a heartbreaker!

[Burgold]

The bailout's purpose is to reward mistakes and bad management. I say, let 'em fail! Every last one of 'em!

It does feel a little bit like.

"Billy, you broke the cookie jar! Oh, Billy, don't cry. It's okay. Have a cookie?

Where are the controls? What's the purpose other than giving these guys a stack of cash to do what they want with? Is it just another trickle down that doesn't?

[Thiebear]

..........................................Amount Allocated in Millions of Dollars	Spent/Lent 
Federal Reserve:	(TAF) Term Auction Credit (allocated)	     900000	                                415302
Discount Window Lending		                                     139256
Banks (other loans primary credit)		                             92645
Investment Banks (other loans Primary dealer and othercredit)  46611
Loans to buy ABCP (                                                          661923
AIG (allocated minus Treasury 40B)	                                      112500	                                  87397
Bear Stearns (initial loan to JPMorgan)	                              29500	                                  26919
(TSLF) Term Securities Lending Facility	                              225000	                                  200524
Swap Lines (other federal reserve assets)		                      601963
(MMIFF) Money Market Investor Funding Facility (allocated)	      540000	
(CPFF) Commercial Paper Funding Facility                               1800000	                                  270879
(TALF) Term Asset-Backed Securities Loan Facility	              200000	                                  200000
GSE MBS NO NAME Program	                                              600000	                                  600000

Treasury:		
(TARP) Treasury Asset Relief Program	                               700000	                                 330000
Exchange Stabilization Fund to guarantee principal in money market mutual funds	50000	
Treasury direct purchases of MBS since Sept.	                       26570	
Citigroup (Treasury+FDIC guarantees)	                               238500	

FDIC: 		
Guarantees for Banks	                                                      1900000	

Other:		
Automakers	                                                                      25000	
(FHA) Federal Housing Administration	                              300000	
Fannie Mae/Freddie Mac	                                              350000	

TOTAL	                                                                [size=7]7361917[/size]  in millions

[Thiebear]

At this point they could just give:

31,000$

to every man, woman and child in the United States.

Want a car: here's one for free. Buy American..

Have a house of 4: 124,000 should fix that mortgage.

Need a new roof: Easy.

How's that for fixing the ecomony... it's the same thing as their doing but they are trying to use huge chunks of money into businesses that couldnt do it right the first time.

They might as well just say: There will be no taxes this year: enjoy.

[SnyderShrugged]

The bailout concept was severly flawed from day 1. Unfortunately, along with the initial fleecing of the taxpayer, virtual carte blanche power was granted to the Fed and Paulson. The latter is what will compound this thing to degrees unseen in the past.

It's time to end this nonsense.

[Burgold]

The bailout concept was severly flawed from day 1. Unfortunately, along with the initial fleecing of the taxpayer, virtual carte blanche power was granted to the Fed and Paulson. The latter is what will compound this thing to degrees unseen in the past.

It's time to end this nonsense.

Yeah, I hated and hate that part of it. These guys, including Paulson, haven't earned that kind of latitude or trust to handle or use the money. Election year politics always suck. Now, I choose to believe them when they said, things had reached meltdown and we had to do something. I still think that they did the wrong thing and now that we are out of the red zone, we ought to take a deep breath and measuredly figure out what and how this money ought to be used and really install some controls and checks.

More, I really think that the Auto makers need to go out and get money from these banks. That WAS one of the chief purposes of the bailout to create liquidity in the lending market.

[Hubbs]

Honestly, I don't even think Paulson knows. I really don't. It's already been said by multiple people inside the Treasury that they more or less made up the $700 billion number. The recipients of the cash change every week. The strategy changes every week. The rules change every week. They have no. Idea. What. They're. Doing.

...which, by the way, constantly adds credibility to the Top 10 Better Ways to Use the Bailout Money.

[SnyderShrugged]

Yeah, I hated and hate that part of it. These guys, including Paulson, haven't earned that kind of latitude or trust to handle or use the money. Election year politics always suck. Now, I choose to believe them when they said, things had reached meltdown and we had to do something. I still think that they did the wrong thing and now that we are out of the red zone, we ought to take a deep breath and measuredly figure out what and how this money ought to be used and really install some controls and checks.

More, I really think that the Auto makers need to go out and get money from these banks. That WAS one of the chief purposes of the bailout to create liquidity in the lending market.

In my heart, and as a former 10 year Ford employee, I think that the auto companies should be treated like any other business, large or small. They should file BK and restructure to become efficient and effective again. Their hubris in claiming that the nation will fial if they dont get help just irks me to no end.:mad:

[Burgold]

Honestly, I don't even think Paulson knows. I really don't. It's already been said by multiple people inside the Treasury that they more or less made up the $700 billion number. The recipients of the cash change every week. The strategy changes every week. The rules change every week. They have no. Idea. What. They're. Doing.

And if that's the case than the bailout has to fail, is destined to create more problems than solutions. You have to go in with a plan and make it work. Tinker with it as needed, but you can't just change it up as the wind changes, because you don't allow any opportunity for any of the fruit to blossom or seeds to even take root.

[SnyderShrugged]

And if that's the case than the bailout has to fail, is destined to create more problems than solutions. You have to go in with a plan and make it work. Tinker with it as needed, but you can't just change it up as the wind changes, because you don't allow any opportunity for any of the fruit to blossom or seeds to even take root.

I wish I even held out any hope that there would ever even be a fruit or a seed that is positive to begin with.

I'm so very negative on this subject. Thanks for the good conversation on it!

[TMK9973]

At this point they could just give:

31,000$

to every man, woman and child in the United States.

Want a car: here's one for free. Buy American..

Have a house of 4: 124,000 should fix that mortgage.

Need a new roof: Easy.

How's that for fixing the ecomony... it's the same thing as their doing but they are trying to use huge chunks of money into businesses that couldnt do it right the first time.

They might as well just say: There will be no taxes this year: enjoy.

Will people PLEASE stop posting this chain email. It's false (Bailout was 700 billion. 31k x 330 million equals 10 trillion.

If the Bailout was passed around to every American, it would be 2k.

There is a LOT wrong with the bailout and how it's being used, but this arguement is wrong and pointless.

[JohnLockesGhost]

Will people PLEASE stop posting this chain email. It's false (Bailout was 700 billion. 31k x 330 million equals 10 trillion.

If the Bailout was passed around to every American, it would be 2k.

There is a LOT wrong with the bailout and how it's being used, but this arguement is wrong and pointless.

Well, the bailout was 700 billion in its original form. But after all the "goodies" the Senate stuffed it with it was closer to 850 billion.

[TMK9973]

ok - Still not 31k per person.

[Special K]

ok - Still not 31k per person.

What about if we changed that to giving the money to the tax-paying Americans as well as taking the children out of the equation?

I think I'd STILL rather do that than to just funnel more money into poorly-managed companies, essentially flushing it down the proverbial crapper.

But, if they want to give money to these big businesses, they must ensure proper transparency (which they aren't) and kick out most of the upper management individuals who drove these companies into the ground in the first place. They way I see it, they are simply throwing money at a problem in hopes to "stop the bleeding" instead of actually fixing the problem to make sure that any money they do happen to give them has at least some hope of success.

[frommd]

If the problem were a bucket with hole in it, the government's solution is to pour more water in the bucket. If that doesn't work, pour a lot more water in.

Maybe they should try and plug the hole first.

[PeterMP]

First, the bailout didn't do anything with the mortgage situation, especially as finally implemented because the bailout didn't proceede as we were told and the bad securities weren't bought.

Second, as per the director of the CBO BEFORE the bailout, there was a chance that it wouldn't do any thing for the credit market. Essentially, you just gave a bunch of people that were just insolvent a bunch of money. They aren't likely to go out and spend it, ESPECIALLY if there are still bad securities out there that might be hiding and making seemingly stable companies unstable.

I'd be curious to know how much of the money that was given to the banks ended right back up into goverment securities. My best guess is we just financed our own debt even more.

[Burgold]

If the problem were a bucket with hole in it, the government's solution is to pour more water in the bucket. If that doesn't work, pour a lot more water in.

Maybe they should try and plug the hole first.

I think you are wrong. The government's solution is to give money to the termites that made the hole in first place and tell them to patch the hole and not eat anymore wood.

or

It's like the old folktale about the scorpian and the turtle. The scorpian wants to get across the river and asks the turtle for a ride. Turtle says, "I don't want to give you a ride. You might sting me."

"Why would I do that? If I sting you we both die" The turtle decides that's reasonable and agrees to give the turtle a ride across the river. About halfway across the turtle feels a sting and realizes that the scorpian has indeed stung him.

"Why would you do that?" the turtle says as it begins sinking.

"I couldn't help it?" answered the scorpian, "it's in my nature." and they both drowned.

The bankers are corrupt greedy scorpians. It's in their nature to do this, even if it kills them too.

[PeterMP]

I think you are wrong. The government's solution is to give money to the termites that made the hole in first place and tell them to patch the hole and not eat anymore wood.

or

It's like the old folktale about the scorpian and the turtle. The scorpian wants to get across the river and asks the turtle for a ride. Turtle says, "I don't want to give you a ride. You might sting me."

"Why would I do that? If I sting you we both die" The turtle decides that's reasonable and agrees to give the turtle a ride across the river. About halfway across the turtle feels a sting and realizes that the scorpian has indeed stung him.

"Why would you do that?" the turtle says as it begins sinking.

"I couldn't help it?" answered the scorpian, "it's in my nature." and they both drowned.

The bankers are corrupt greedy scorpians. It's in their nature to do this, even if it kills them too.

It's a frog not a turtle.