My thoughts on the Bailout agreement.

[Coexist]

Looking at the details in this article, I am actually optimistic; not just about our economy, but about our future as a nation.

This legislation is a true bipartisan effort. Both sides obviously had a give and take, and in my opinion, it is a deal with some important components that are good for all of us. Here is an excerpt:

The plan calls for the Treasury Department to buy deeply distressed mortgage-backed securities and other bad debts held by banks and other investors. The money should help troubled lenders make new loans and keep credit lines open. The government would later try to sell the discounted loan packages at the best possible price.

At the insistence of House Republicans, some money would be devoted to a program that would encourage holders of distressed mortgage-backed securities to keep them and buy government insurance to cover defaults.

The legislation would place limits on severance packages for executives of companies that benefit from the rescue plan, but details were sketchy.

Also, the government would receive stock warrants in return for the bailout relief, giving taxpayers a chance to share in financial companies' future profits.

To help struggling homeowners, the plan requires the government to try renegotiating the bad mortgages it acquires with the aim of lowering borrowers' monthly payments so they can keep their homes.

from Forbes

The bailout, to be financed by government bonds, includes provisions to limit executive compensation for the firms that are being bailed out, an equity stake in those firms for taxpayers, an oversight board to account for the bailout process, and a measure to help prevent mortgage foreclosures. The $700 billion will be doled out in tranches of $250 billion immediately, $100 billion upon the approval of the president and $350 billion upon the approval of Congress.

Lawmakers also said there is language in the plan to allow the government to recover some of the money it is spending to buy troubled assets, as well as a provision that allows firms to buy insurance for toxic securities--something House Republicans had requested.

Credit will not dry up, so businesses who rely on this option to make payroll because they get paid at then end of projects will be able to stay afloat. The real estate market can get loans for people who are able to buy property. Homeowners facing foreclosure will have a good option to help keep them in their homes (helping de-escalate future crisis when these people default in addition to those already foreclosed on). Taxpayers will be able to share in future profits once values are stabilized/increased. If a company wants to keep the future profit, they have an option to keep the present bad debt with a government insurance plan, and executives will not be immune to the pain of their poor decision making on the job.

In my opinion, the best elements of both plans are included, and both parties are to be commended on working so hard to truly put the economy of the country before the nasty politics that could have paralyzed the country.

This is the kind of bi-partisan negotiation and cooperation that will be a hallmark of an Obama administration. Will the left always be happy? No. Will the right always be happy? No. Will we get shit done? Yes.

[lostnotforgotten]

1. Naomi Klein "The Shock Doctrine"

http://blip.tv/file/521421

[Coexist]

2. that is a very long video clip - can you summarize how this relates to the bailout agreement please?

[lostnotforgotten]

5. Do Your Own Homework - Why Do You THink The Video Link Was Posted!

eom

[Coexist]

7. wow - well, thanks for adding to the discussion.

:eyes:

[elocs]

11. I think, perhaps, someone did not watch the entire video clip themselves,

so how could they summarize? Hence, the snippy answer. A great way to make friends and influence people.

[Indiana_Dem]

3. Yes, I think it sounds good. I approve!

Now we need to get everyone else on board! lol

[Coexist]

8. I hope they do - its that important.

[RUMMYisFROSTED]

4. Nowhere is the little part about $700B mentioned.

Actually, with this package, over $1.2T.

Insanity. That's adding 12% to the already out of control national debt.

Fiscal insanity.

[Coexist]

6. something had to be done.

from what I've been reading on this and seeing on the sunday shows, they do mention that this is the beginning. The ramifications of doing nothing would have been felt in my home within months, due to how payroll is met with our employers.

[RUMMYisFROSTED]

9. If liquidity is an issue with small business...

Why not fund the SBA?

If liquidity is an issue with taxpayers...
Why not guarantee low interest loans? The same for Corporations.


Giving the money to Wall St is theft.

[Coexist]

12. we can agree to disagree - the OP is my opinion on the plan and the possible future

of how our government can work.

Peace.

[stillcool]

14. I think I read where it starts out..

at 250 billion and goes from there, according to circumstance? I look forward to the opinions of those more knowledgeable than myself when the final bill is posted. Do you think there is any way the final version could be beneficial?

[RUMMYisFROSTED]

15. Do you think there is any way the final version could be beneficial?

Yes. A small chance.

The main problem is that it is another in a series of redistributions of wealth. It is quite possible that this could be the final battle in the class war- and we're not winning.

[Coexist]

16. you are correct, from Forbes:

(emphasis mine)

http://www.forbes.com/2008/09/26/bailout-congress-bush-biz-beltway-cx_bw_0926bailout2.html

The bailout, to be financed by government bonds, includes provisions to limit executive compensation for the firms that are being bailed out, an equity stake in those firms for taxpayers, an oversight board to account for the bailout process, and a measure to help prevent mortgage foreclosures. The $700 billion will be doled out in tranches of $250 billion immediately, $100 billion upon the approval of the president and $350 billion upon the approval of Congress.

Lawmakers also said there is language in the plan to allow the government to recover some of the money it is spending to buy troubled assets, as well as a provision that allows firms to buy insurance for toxic securities--something House Republicans had requested.

[CrispyQ]

10. Did the house repubs get their ban on corporate & capital gains taxes for a two year period?

The article doesn't mention this, but it's the kind of thing I would expect. Tell us the best things about the bailout but leave out the worst. Just wondering & anxiously awaiting the actual bill they will vote on. We've been screwed so many times the past 30 years I expect the worst.

===
The Trillion Dollar Wrong Thing
by Larry Beinhart

http://www.commondreams.org/view/2008/09/27-0

snip...

The real problem is that we have moved from a production economy to a consumption economy. Even worse, a consumption economy that supports the production economy in other countries. When we start to consume more than we produce - which we have - we must borrow. That means we're selling off or mortgaging our assets. If we were to do that to create more production which would ultimately pay for the investment, that would be alright. But we're not, we're just consuming more.

You can't borrow your way out of too much debt. At least not without a plan to create more income.

You can't consume your way out of an over-consumption problem.

If we don't address the fundamentals now, we will have to do so later. At that time, they we will be worse. Both by themselves and with the addition of the new $700 billion debt.

The ultimate problem is remaking ourselves into a production economy.

[Coexist]

13. I haven't seen this anywhere, and I too am waiting to hear that,

personally, I think if that was included, it would have been mentioned under Republican concessions right away, as was the insurance part.

I think Obama has been so anti-corporate tax break that this would have been a non-negotiable issue for the Democrats. But we'll have to wait and see.