The Bailout is hurting Americans

Are you sure you have your title right?

Typical of Bahu to blame only Republicans when 90 Democrats voted no to the bill after Pelosi gave a very interesting speech telling those who are up for relection it's ok for them to vote no. It seems obvious that with a Democratic lead Congress, Pelosi and the Democrats are useless yet again.

Eh, wait a minute there. Off course, some Democracts voted no to the bill, but then again, there were more Republican who voted agains the bill than there were Democracts. Considering that the democrats are a majority by themselves, I'd say Republican ratio who voted against is much higher. Let's not start blaming the other party when it failed. I think everybody here (and in the USA in general) are pretty quick to get into the blaming game, while right now, THEY HAVE TO FIND WHAT TO DO NEXT FIRST!!!

What?  Where do you get your propaganda from?

That just shows there were more smart republicans voting aginst the rich than there were democrats.

As I said it in another post, the bailouts HAS to be done if we don't want to seriously wreak the economy. The libertarian philosophy attitude in that case will lead us into a potential serious depression, and nobody wants that. The people are right to criticise the rich of Wall Streets for putting themselves into that situation, but if the bailout isn't accepted, we might see a lot more of bankruptcies on the part of banks, insurance company and investment firms, which might spiral down to stopping the credit for almost everyone - thu stopping consumming.

No, the bailout will do more long term damage both in lessons not learned, and in devaluing the dollar.  Medicine does not taste good because it is not meant to be candy, but a necessary evil to get rid of an infection.  So it is with this situation.  I am not sayign that more republicans will not get stupid.  But so far, they are not.

Credit will tighten, and there will be ripples in the economy.  But the solution is not to shove it under the rug (bailout).

You may wanna point to Bahu first since he was the one blaming Republicans. Of course I would not expect you to say the same to him. But just as you said, Democrats are majority and they had the chance to get this done but failed and their only excuse was to point to the Republicans, as usual. This is suppose to be bipartisan, an idea meant to help all Americans regardless of party affiliation, but Democrats continue politics as usual always blaming Republicans for everything they screw up and for what they can't accomplish. Kinda ironic considering many here are blaming Republicans because these mistakes happened when they were majority.

Besides, I was one of the people who was making this an all around problem. There is enough blame to go around but obviously some here wanna play the blame game except when the blame point to Obama.

I agree wit DrGuy, this will only show everyone that you can always count on the Gov't to bail you out rather than teach a lesson as to not to let this heppen again. I have to believe there are other ways to do this, throwing money at something does not always fix the problem. We need a solution that does not bail out the guilty parties, one that will fix the problem and make sure it does not happen again without rewarding people for their mistakes.

Otherwise, to be fair, maybe everyones credit should be reset to zero. How come I can not benefit from my mistakes as well?

Well, I hadn't answered his initial post because.. well, because I though his post was just partisanship babbling, and I though it'd be somewhat ignored. But someone came and blamed entirely on the Dems, and I wanted to say something about the whole blame game going on here.

And I have seen as much pointless blaming on the Dem side than the Republicans, so I don't think a party could actually adopt an holier-than-thou attitude regarding the whole problem of "Let's point fingers rather than save the economy". GODDAMNED ELECTION!!!

If every single person in America was on the verge of bankruptcy because of stupid behavior, then it would probably happen, since letting everybody bankrupt would crash the economy.

YES, these people have to learn a lesson. YES, the taxpayers are going to pay for the mistakes of others. YES, it's a socialist-like action.

But not doing it will hurt everybody.

Credit will more than tighten, it's going to be so small you could smuggle it trough the airport. There aren't going to be "ripples in the economy", the economy will effectively crash and implode on the long-term. IF the bailout is aggreed, and only then, the consequence will be a credit tightening and ripples. But if we do nothing, it could very well plunge USA (and the world) into recession. You should not underestimate the crisis as just another recession. It's a complete sector of the economy that is in deep crisis, and that happens to be the single sector on which all the other goes to when they expand their business!

I am glad you posted that, because it takes this to the ultimate conclusion and shows the problems with the whole scenario.

If everyone is on the verge of bankruptcy, then what is going to happen/has happened?  Your money is worhtless.  That is what all these bailouts are doing.  Basically penalizing (they can raise taxes or not, the damage is paying the bailout) everyone for the sins of the few.  The bailout will cheapen your money.  You lose whether you pay more in taxes or not, and the hardest hit - the poor of course.  Dont believe me? Ask Weimar Germany. 

This bailout will not go that far, simply because it is not "all" but just one section of the economy.  So the results wil not be catastrophic, but will be bad.  It is bad, but the good thing that most people see is that the bad part will not be so easy to see.

No, that is the hyperbole.  The reality is that credit will tighten, we will go into a recession, and come out stronger.  You fail to realize that while thigns have gotten bad, the banks are for the most part still very sound.  And for them to make money, they have to lend money.  It will not disappear.

I personnaly think you are over-optimistic about the situation, Guy. The banks for the moment aren't "very sound", they are in panic mode. They haven't stopped their activity for the moment, but people just don't trust any sort of lending for the moment, and even the LIBOR rate is going trough the roof. Treasury bonds have sold at -1% only in the past months, which means people didn't trusted a bank to hold their money, they'd rather have the governement do it at loss.

Sure, the average consumer haven't felt directly the problem - yet. But that's because many bank hopes that the bailout is going to happen, and they know that if they actually stop the credit for the consumers, it's gonna be the end.

And 700 billion dollars injected to cover for the junk investments the financial sector has made won't plunge us into an inflationary crisis. You won't create new money, you will simply garantee the asset they own. If you were giving money directly to the consumers, then yes. But the banks will be using that money to lend to solid investors, not to invest themselves.

And except if the governement starts acting really stupidly - which will never happen -, never the money will become "worthless". At worst, in the worst-case senario when you actually give the money to the stupid consumers, you might have a surge in inflation, but won't make the money "worthless". That's an hyperbole, if I've ever seen one.

A Depression is an actual possibility if nothing happens, most economists agree on that. A Zimbabwe-like inflation crisis? Nobody actually believes that, save you.

Actually it would go back to Adam Smith and is seen as a further advancment of the economic ideas of John Maynard Keynes. 

But using the term 'Reaganomics' is so much more inflammatory in current times.

But the whole point of state interventionism - Keynes's philosophy - was to prevent another catastrophic crash. And this is what we are facing today.

And Keynes's philosophy is the determining attitude of the federal governement right now - even Reagan hasn't stepped away from *that*. So I really don't see what we are betraying, if we are actually saving the economy as a whole from the stupid actions of a few.

Actually, no.  Most do not. And most (for a great variety of reasons) are against the bailout.  The AP just ran a story on it that I read.  The economists ran the gamut on political persuasion, but all had one thing in common.  They thought the bail out bad.

I may be overly optimistic.  I prefer to think of myself as not running for cover as the chicken littles tell the sky is falling.  It may be more than an acorn, but it is not the heavens.

And a great many economists, and most from the very esteemed Chicago school, do not buy Keynes.  Nor do I.

And many people still thinks Obama is a muslim, what's your point? Wether you believe in Keynes's theories, it is still the determinant factor in modern economies.

Eh no, and that is my point.  It is one of 2 predominant schools of thought (the other being Moneterists), and at present the least regarded of the 2.  I was only giving you my perspective to show why I differ from your interpretation, and why I still think Keynes is a smart man, but not when it comes to determinant economic theory.

Mixing economics with politics in the prsent situation is the worst kind of  situation to be in. Chicago school holds that reducing money supply is a sure enough stategy to control stagflation.     The present crisis demands injection of money in amarket that      is short on liqudity and confidence.Bush and Paulson hvae set aside their onservative economic vies and have hit upon a solution and much as one dislikes Bush there is much to admire in his package. I think the solution may not be bold enough to stave off the drift into recession, but a bold first step. 

The symptoms of the crisis were evident as early as September 2007 when the Feds cut the prime rate.

The taxpayer cannot be made to pay for the sins of the corporate fat cats: having said that, I must add that there is no alternative.

That is simplistic and false.  The problem today is NOT mixing Economics and politics.  It is essentail (and what is lacking especially with this bailout package).

The Chicago school (in a nut shell) believes in minimal intervention, and then through manipulation of the interest rates.  It is not meant to be a sledge hammer, but a surgeon's scalpel.

The problem is that for the last 20 years, Keynes has been running wild in government(and why not?  A politician loves to think he is doing something good - regardless of empirical evidence), and has brought us to this mess.  So we are going to fix it with more government meddling?  ONly in a pigs eye.

Yes there is.  There always are alternatives.  But they are political suicide (perhaps if Bush was looking for a right solution and not a legacy, he could have done it).  We saw what Keynes philosophy got us.  But since Moneterist philosophy is not conducive to the current political campaign, it will not happen.