My take: No crisis, no bailout. The country needs a deep recession.

[sinkingfeeling]

I've come to the conclusion that this economic 'crisis' is a ton of bull. Yes, the foreclosure/bad bets via credit default swaps and deregulation of 'financial' institutions has caused said lenders to face bankruptcy. So what? They wrote the 'rules' and were perfectly willing to throw out having to qualify people for loans. No one put a gun to their heads and forced them to write 'bad loans'. They reaped their profits on bundling mortgage securities and now they should take their 'hits'.

The whiz kids told the Senate that if there was no bailout, that credit would 'dry up'. Again, so what? This country has spent the last 30 years in credit heaven. The country is carrying $10 trillion in debt, corporations are in debt and crying for more credit to operate, every-day people are swimming in personal debts; credit cards with 21% APR, home-equity loans when there is no equity because they 'bought' with no money down, student loans that will never be repaid. Look around your city or town, do you have hundreds of new buildings, built in the last few years, sitting empty with 'for lease' signs? Most areas are overbuilt and the 'developers' borrowed the money to build.

Last night on ABC News, they said that bank X had denied McDonald's a loan to up-grade their coffee machines. So what? Will McDonald's go belly-up because they don't have new coffee machines?

Here's what would happen if we don't bail out Wall Street. Lack of expansion credit to corporations will cause unemployment. Failing banks and brokerages will cause unemployment. People will lose their jobs because of the trickle down. Investors in the stock market will take losses, including people like me with 401Ks and within a few years of retirement. The Dow might drop to $4000. Credit will become harder to get. But, there is a solution that doesn't write a 'blank check' from the taxpayers.

If I was to run things, the first act would be to declare a foreclosure moratorium and place all lending institutions under federal control. Rewrite all 'bad' mortgages to low rate fixed. We could either create a new federal agency to deal with the mortgages as FDR did with the Home Owners Loan Corporation or let it be handled by Fannie and Freddie.

Secondly, dump a couple of hundred billion dollars into a federal work program for those who lose their jobs. The country certainly needs to rebuild its infrastructure and others could be vested in finding solutions for our energy problem.

Set up strick regulation of the banks before allowing them to repurchase some of the newly created loans. Tighten lending rules across the board....including credit cards.

This country needs some tough love. People will hurt during the recession, but we might finally break the 'easy credit habit'. Let consumerism take a hit. People might start acting like their grandparents and actually only buy what they really need and start saving a little.

OK, flame away!!

[tekisui]

1. NO BAILOUT! NO COUP!!!

[Hawkowl]

2. Better than hyper-inflation

I do have an undergrad degree in Economics and a year of grad school. And I don't trust these Wall Street economist as far as I could chase one with a baseball bat. Former fed chairman, Paul Volker, presided over the Reagan recession which hiked interest rates up to the high teens. It preserved the value of the dollar and prevented hyper inflation, but did produce stagflation (i.e; high interest rates+ inflation).

We ARE in an UNAVOIDABLE RECESSION RIGHT NOW. It is a natural result in the cyclical boom/bust economic cycle that the Rethuglicans have DELIBERATELY engineered. The recession has arrived. The question is how do we recover from it? Invest in jobs, alternative energy and people? Or throw more money at the crooks, liars, and incompetent, arrogant assholes who got us into this? More corporate welfare? Continue pissing away over $500 BILLION per year on a needless occupation?

Are "crisis" is not unprecedented. There have been numerous posts on banking crises other countries have successfully weathered in the past 20 years--WITHOUT a massive taxpayer giveaway. Norway, Japan, Russia, Mexico, Argentina all have managed there own economic crises in the last 20 years.

Paulson's plan doesn't pass the smell test. Every time he and Bernake were asked why we needed all this money right now, they couldn't give a straight answer.

No Bail Out Howie.

[lumberjack_jeff]

30. Or worse, deflation. n/t

[NC_Nurse]

3. No flames here. I agree.

[caledesi]

5. I agree too! NT

[whosinpower]

4. I'm not going to flame you

Because I agree with you. I've said it before that this is a historic event - and a historic opportunity at the same time. A historic opportunity to rethink our very society and what it is built on - and to get of the market driven mantra that more "STUFF" makes you more successful and happy.

My father died very recently - and the funeral director asked us children what he left us as a legacy. He had no money, little in terms of assets, was a simple farmer - and yet he left us a wealth that goes beyond value in terms of money. When a loved on is on a deathbed - a person does reflect what is MOST important, and it surely is not money.

And if that McDonalds could not afford to buy those machines with their own cashflow - then there is something wrong with their own accounting/saving practices. Everything needs to be rethought - but this is not necessarily a bad thing. It does, however cut the banks out of a piece of the action - and for that - so sad, too bad. I could care less.

[annabanana]

6. Do any of you remember the Depression?

Do you all have enough land to grow everything your family will need to eat year round? And graze a goat and raise some chickens? Will your job have any relevence in a pre-industrial society?

[sinkingfeeling]

7. No, but my parents lived through it.... and they weren't on a farm.

[Virginia Dare]

10. So we give them the 700 billion, roll the dice..

and we still end up in Depression. Then what? No jobs and no money to do anything about it. This 700 billion doesn't come with any guarantees, that's what bothers me. I just don't trust the shysters on Wall Street pushing for this thing. They are the ones who created this. I feel like we're being gamed again.

[bdamomma]

26. I feel so insulted and humiliated by this.

totally not listening to us, no bailout for these companies, shock doctrine is correct, they will keep on doing this until we stop them. They(Bush and Co) have such disdain for the American people.

[dkofos]

8. I agree. If we bail them out the dollar will crash. If we don't the bankers may crash.

I say let the bankers crash.
It will be cheaper to clean up that mess if it ever happens.

[earth mom]

9. Yep-how many jobs would 700 BILLION create?

I agree with your post 100%. :thumbsup:

[Virginia Dare]

11. Thank you. We need a NEW New Deal..

I say give them enough to get us through January like Schumer suggested, and get Obama in there to create another New Deal for us. The system needs to be rebuilt from top to bottom, and I'm not willing to throw that much money at a still corrupt system.

[whatchamacallit]

12. For me, this bailout represents proof that we have lost our place at the table

Our future is no longer in our hands.

[SteveG]

13. Millions of those over 55 would lose their retirements

Millions who have their retirements in 401's and 403b's would be wiped out - and be forced to move in with their kids --- serve them (the kids) right.

[sinkingfeeling]

15. Wiped out? They (and I'm over 60) might lose half of it. And anybody thinking about retirement

should have a home already paid off.

[guitar man]

14. I must sadly agree

As much as I don't want to see it happen, I have a 2 year old daughter to take care of, I'm afraid you're right. Real revolutions are born out of pain. I fear we'll go through some degree of suffering one way or the other, so let's keep the $700bn and go with the other.

[fla nocount]

16. Yes, a DEEP, DEEEP recession, one that our children will remember.

That will have enough impact to help them as voters to shape legislation for years to come. Let's go for a lasting impression.

Those with skills enough to produce in excess of their needs will do well in any economy. Let's develop those skills in our children and ourselves as a nation. Other nations are doing exactly that and it's why we are being left behind. It's not entirely our fault, that kind of thinking is being suppressed because WE, the people, are simply too expensive.

[cloudythescribbler]

17. Boy can I have YOU as a campaign advisor???? You really know winning political strategy!

[sinkingfeeling]

18. I think you're being facetious. You do know that calls to Congress are running 150 against to 1 for

the bailout.

[fla nocount]

19. Run with it, don't look back. I've got your back. n/t

[cloudythescribbler]

20. Yes, it was SARCASM -- after all, even Obama supports some KIND of bailout

and so do I

the question is what the SPECIFICS of the bailout should be (a proverbial $700 billion question)

[sinkingfeeling]

24. Dup. delete

[sinkingfeeling]

25. What is it that you want to 'bailout'? I'm for bailing out people not corporations.

[cloudythescribbler]

34. that's too simple a formulation -- like McGovern's "money earned by money should be taxed ...

at the same rate as money earned by men". It makes a great sound bite, but not economic policy, which requires far more pragmatism.

But the overall PRIORITY -- of doing only the minimum to keep the necessary big corps from going under (Fannie Mae and Freddie Mac were corporations, albeit not wholly private ones, and SHOULD have been bailed out) -- is right.

The main thing is to establish guidelines for COURTS NOT THE TREASURY DEPT, with VASTLY expanded staff of bankruptcy (special) courts, should review mortgages that were essentially fraudulent ripoffs (in my view, it was all obviously done IN EXPECTATION of a 'bailout') and forcibly renegotiate them, and the "bailout" should be PRIMARILY from the bottom up.

But no simple formulation can answer this extremely tangled question, and it is better to be overly lax w/some of the rich to keep the whole shabang from capsizing than to nail every possible injustice. Problem is, even the Democrats on the whole go WAY too far in the direction of laxity at the top, and letting the bottom sink. Indeed, Clinton, though less at fault in this sphere than the Repukes, did a LOT to promote much of this elite ripoff (including in the area of taxes re: McGovern's comment)

[magellan]

21. TOUGH LOVE definitely needed

The wakeup call is overdue. There's no way to avoid it, it's coming. And yes it's sad that innocent people are going to suffer -- hell, I've been opposed to the BS that got us here all along and my family is going to be hurting too -- but there's no avoiding that either. Too many Americans have been sleep-walking or actively complicit in putting into power the forces that brought us to this. That includes the leadership in both parties.

Solid ideas like you've laid out can minimize the pain, but the Repubs won't give us the next FDR. And that's what we need now.

[unkachuck]

22. why don't we....

....LOAN wall street the money to be repaid with interest? that's the way they would do it to us....why give the money away hoping that it will be for something of value in the future?

....couldn't the government acquire these bad mortgages as security for a LOAN to the institution that wanted to clean its books?

....obviously, I know nothing of high-finance, but it makes sense to me to be LOANing the money instead of giving it away for free....

[lib2DaBone]

23. No Bail Out.. Not A Dime... There are many things they can do..

Bring the troops home... that would save a quick $12 Billion a month. Start a public works project.. fix our roads and bridges. Ya.... I'm sorry.. I keep forgetting our CONgress is not in the business of serving America.

[bdamomma]

27. yes, the Iraq invasion

seems to be on the back burner now, you never hear about those troops who are getting killed everyday.

bring them home, fuck the military industrial war complex.

[mmonk]

28. I believe we are a little bit of a crisis.

However, it needs to be done smart and not under pressure. China called in its chips in a direct warning to the US. We then took over Fannie Mae and Freddie Mac. Now more of Wall Street wants a handout. My opinion is something needed to be done. However, I would go much more slowly with a reregulation plan and smaller infusions of capital to watch and see if the markets stabilize and with a non partisan adisory board.

[SammyWinstonJack]

29. Doesn't matter because the fat cats are going to protect their financial future at our expense and

NO ONE is going to stop them. As one DUer put it, They're too big to fail and we're too small to matter. Bottom line. End of story.

[lumberjack_jeff]

31. Everyone needs more information.

It's as reactionary to impulsively throw money at this problem as it is to say "no bailout".

With a $10t debt, the country is much more vulnerable to a depression. My experience also suggests that we, as human beings, are wanting in survival skills compared to the depression generation.

[liberalpress]

32. Absolutely

Let's have a deep, deep Depresssion. 80-90 percent of us out of work, Food dsitributors won't be able to stay in business, so even those working will starve. Fear and Hunger grip the populace, and those with guns take what little food there from those without guns. Yup. That's the ticket.

[sinkingfeeling]

35. And what makes you think that won't occur after they have successfully bankrupted the USA.

We're looking at $12 trillion in debt. A bailout will bring down the US dollar even more. Those countries that have put up the money we spend, may want it back because the government will have nothing to back up those T-bonds.

[liberalpress]

33. Absolutely

Let's have a deep, deep Depresssion. 80-90 percent of us out of work, Food dsitributors won't be able to stay in business, so even those working will starve. Fear and Hunger grip the populace, and those with guns take what little food there from those without guns. Yup. That's the ticket.

[Neshanic]

36. Harsh, but you will get your wish, as people seem to think this is fixable in months.

The bailout will occur. That is a fact. Then we will have waves of panic and stock drops, all the while the economy sinking even more into a hellhole. Jobs will be lost in the millions. Everything bad that some here tisk-tisk, will happen. Massive layoffs, monster home depreciations, and more begging from the usual suspects for more money injections. This will be for years. Not months, not early 2010, but 2017 and beyond.

So you will get what you propose, and this economic crisis may be "bull" in asking for the huge bailout, but all the things you desire when an economy falls apart at the seams will occur. The horse is out of the barn, nothing will forestall our life in this country changing drastically over the next decade and beyond.

[Matariki]

37. You seem to think "people will hurt" is the equivalent to knocking a shin

And not people losing their homes, being forced to live in cars or on the street, children going hungry or without medical care, loss of jobs, the elderly losing the bulk of their retirement, and so forth.

Be careful what you wish for. You may find out what real suffering is.

[sinkingfeeling]

38. And giving away $700 billion dollars, which will cause a devaluation of the US dollar, and not

correct the root cause of our economic woes (greed, deregulation, legal gambling via credit default swaps, etc) will help how?