Bailout Plan??

[ColleenSwerb]

Ok, who understands this mess and can explain it to me? My friends are up in arms because Congress didn't pass it, and I'm totally confused.

Help!

[Jennifer]

My husband, the boring Governmental Auditor, could. But that means I would have to be listening. And I haven't been. Sorry. :p

[scrapmonkey]

The bailout plan was to provide money to the banks that are in trouble. By doing so, it would prevent credit from freezing up at those banks, which would in turn affect the housing market. Without the bailout, credit will start to freeze. No credit would mean no new house purchases and default on other house payments for some. It would also mean a loss of jobs for those in the related fields - banking and housing/ construction. This would also spiral us from a recession to a depression. The stock market is tanking from the news....

[wildblueeyez]

I had mixed feelings on the whole thing because something just didn't seem right. but I am VERY afraid for where we as a country are headed!!!

[scrappychic]

So why didn't it get the votes the first time? And what's the diff between the 1st plan vs the revised one? I'm pretty clueless too.

[crystalbella77]

I too have mixed feelings about it.....everything is soooooo scary right now...... :(

[cheltzey]

However, one reason it didn't pass is that it would saddle taxpayers with the bad debt. It's believed by many that companies who made poor decisions should be the ones who have to face the consequences, rather than taxpayers. This happens in nearly every recession (think the tech bubble in the 90's--no one bailed out failing tech companies). I'm not saying that I necessarily agree with this (I'm on the fence on this one), but that's the reasoning behind not passing it.

[ColleenSwerb]

Interesting.

I need to read the news more, lol.

[wildblueeyez]

I figured the tax payers would ultimately pay for this. no shock there. I need someone to break things down into simple things so I can understand them. The politician's start talking and my eyes glaze over and all I hear is blah, blah, blah.

[jessica31876]

wont the taxpayers suffer either way though? I mean if it is passed we get the debt from bailing them out but if it doesnt pass then alot of people will be losing their homes and possibly their jobs? Where we live there have already been two major car dealerships close down. There is talk that three more are due to close any day. So its not just housing but automotive sales also. Stores that have been in busines for years are closing. Restaurants are shutting down. Two for instance are Donatos (I think thats the name) and Fazoli's. Albertsons has closed here in Florida...at least most of their stores have. Driving down the road I see more and more signs for store closings. I for one am really worried.

[wildblueeyez]

our little city lost all of it's stores a few years ago. it's very sad.

[scrapmonkey]

Another part of the problem is that a number of Senators and Reps are going to be going on vacation tonight as it is a Jewish holiday (Rosh Hashannah). Supposedly 108 Reps did not even vote at all.
I'm concerned because my current job is in the financial field and if this crash continues, finding a job in that field come June (when I am being laid off) will be difficult at best - I might have to re-evaluate my career and take a different direction.
The stock markets dropped big time today - but not close to the depression levels yet nor as badly as Black Monday back in 1987.
Jessica is right - one way or another the taxpayers will pay for it with or without the bailout. My biggest concern with the bailout is we stick to our guns and not have the CEO's, CFO's or boards of directors of these bailed out companies get a single penny of benefit from this....
The good news is that oil prices dropped and the US dollar actually got stronger - there seems to be repercussions of the banking crisis worldwide....

[junebug]

i'm not totally sure about the details, but it all has me scared. i;m trying (been trying for awhile now) to find a job, even part time and now it looks enen more bleak.

[cheltzey]

Actually, from what I've been told by financial advisors (and NPR!) is that the bailout (or lack of) really won't have much of an effect on people outside the finance industry (sorry Leslie!). Granted, we have numerous other problems with the economy, and they could combine to make the perfect storm (which I don't believe, and I can't stand all of the "next Great Depression" talk since it's blatantly untrue), so there are plenty of other reasons to worry about the economy. I guess that could make you feel better...somehow.

[Traci Reed]

I, for one, am scared too but I got an email with a cool plan the other day..I think it could work! LOL

This is the best I've heard yet. What a concept!!!! Problem is, it makes too much sense!! Why isn't this person on the ballot!!!!!!

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 bonafide U.S. Citizens 18+.

Our population is about 301,000,000 ? counting every man, woman and child. So 200,000,000 might be a fair stab at adults 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 entrepreneurs.

Buy a new car - 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 ( "vote buy" ) economic incentive 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 US Citizen 18+ !

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!

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, The Birk 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.


LMAO!!

[HeatherKS]

LOL I got that same email today Traci! :p Sounds like a GREAT idea to me - I'll take that money anyday! :thumbup:

[lauren grier]

lmao that sounds like an awesome plan traci

[ColleenSwerb]

Traci I'm aaaaaaaaaaaaaaaall for THAT plan! LOL!! New car and wardrobe here I COME! LOL!

[Brooke W]

My husband, the boring Governmental Auditor, could. But that means I would have to be listening. And I haven't been. Sorry. :p

too funny,lol.

[cheltzey]

Love that, Traci! I'd give my vote to any person who supported that plan!

[lizzyfizzy]

595K. i could deal with that! i would be a good stewart. wow. could you imagine?

[Brooke W]

Traci I'm aaaaaaaaaaaaaaaall for THAT plan! LOL!! New car and wardrobe here I COME! LOL!

I could so definitely get behind this plan!

[junebug]

i lurve that plan, Traci! I could finally pay off my car loan (its down to around $25,000 now woo hoo!) then i could buy a bigger house than this tiny one that i hate (but we own it outright) and a new wardrobe! oh, and i could really go on a digi scrapping kit spree, huh?

[crecia27]

I, for one, am scared too but I got an email with a cool plan the other day..I think it could work! LOL



LMAO!!

except the math is wrong and its really on $425.00 per person. But I'd be ok with that too some months!

[Traci Reed]

lmao yeah but it's fun wishful thinking!

[wildblueeyez]

I say make everyone in the Senate and House take a big pay cut - they should only make what the average american makes. let them live on what we do and see how they like it!!! the pay cuts could be used to pay down our deficit!!!

[scrapmonkey]

I agree that we are not anywhere near another Great Depression. We have enough protection thanks to the lessons we learned from that time. But there will be enough people freaking out about the economy to shake it up for a while (like my DH who just took $14K out of our retirement nest egg and is refusing to put it into our bank - since it's National City whose stock tanked 63% today). It's going to take a lot of different (bad) cogs to fall into place to create a depression - at this point, we only have a few bad cogs in play - we just need to get people to stop panicking and get them to just fix the darn problem....

Actually, from what I've been told by financial advisors (and NPR!) is that the bailout (or lack of) really won't have much of an effect on people outside the finance industry (sorry Leslie!). Granted, we have numerous other problems with the economy, and they could combine to make the perfect storm (which I don't believe, and I can't stand all of the "next Great Depression" talk since it's blatantly untrue), so there are plenty of other reasons to worry about the economy. I guess that could make you feel better...somehow.

[Di-ahh]

$595,000.00 could buy a lot of scrapbook kits! :thumbup:

[Angie4b1g]

My husband works for National City :(

[Nikki Epperson]

I figured the tax payers would ultimately pay for this. no shock there. I need someone to break things down into simple things so I can understand them. The politician's start talking and my eyes glaze over and all I hear is blah, blah, blah.

Most def. I can't stand it. Use smallllllllllllllll words. Your big words don't impress me. :thumbdown:

[Sue Setiadji]

except the math is wrong and its really on $425.00 per person. But I'd be ok with that too some months!

Thats a considerable mathematical error!! There is still something so wrong about CEO's stuffing up and still walking away with their whopping paypacks intact. Happens worldwide unfortunately!
I love the spreading of wealth concept though $425 wont really make a huge contribution to that ideal!!

[AmyM]

OH good grief don't get me started on this. Let me type a short version of what I've been reading, studying, and discussing with friends the last week or so..

Flashback to 1992 when Congress mandated that Freddie and Fannie have a minimum 42% of their portfolio in high risk loans (DUHHHHHHH what did they think would eventually happen should the price of oil go up a little or the economy take a down turn, or heck, just with high risk lenders in a perfect economy?). Google community reinvestment act. Mix in predatory lenders, greedy executives, and shallow citizens trying to outdo their neighbors borrowing money they didn't have to buy what they couldn't afford to keep up with the Jones's (the American way, living over and above your means) and voila' you have the mortgage crisis.

For the man who was wounded in Iraq and now can't work to pay his house payment because he fought for this country - heck yeah he can have my tax dollars but the likes of my hypothetical man are a minority. But the rest can go live in a tiny apartment or a crappy house in a crappy neighborhood like I had to do for 8 years, I have no sympathy for them and their stupid choices. You made your bed now lie in it. That sounds harsh but that's the way the cookie crumbles and that's life. Who paid my bills when I was on bedrest with Kassi and coudln't do so a few years ago? Who bailed out my dad's business when he lost money many times over many years? Not the freaking government but that's no surprise because govt. NEVER rewards responsibility. Since when does making bad decisions in life or falling on hard times spell a government bail out and a Robinhood act taking my money and yours to pay off somebody else's loans? No offense to the French, but if I wanted to live in a socialist nation I'd move to France. In this republic, and in any democracy, the government has no business buying up the private sector and handing a trillion dollars to one man with very low restrictions and over sight. Nancy Pelosi and the rest of the thugs in congress can stick it where the sun don't shine for all I'm concerned and yes I've called and emailed all of them. So have friends and family members.

It boils down to this. Banks will not be willing to lend as much money for people to buy bigger houses and more stuff they can't afford which is part of what got us into this mess in the first place. People with 401k funds that are not highly diversified will lose TONS of money, and people like us with highly diversified investment have and will lose more money. Us, to the tune of 15% in the last quarter and much more after the last few days. But I don't care because it's a matter of integrity and principal and what this country was founded on. I can lose my money with great peace of mind if the alternative is bigger government and more government control. Also, the treasury will have to print more money to cover this crap which will lower the value of the dollar. Folks this is bad, bad, bad and we all need to do our research. I'm telling you, unless you are a socialist you do not want to hand over that much control to the government. I'm very passionate about this as I come from a long line of self made folks with small businesses and not a lot of money who have worked their butts to the bone their entire life and don't care to hand it all out to the government.

[AmyM]

I, for one, am scared too but I got an email with a cool plan the other day..I think it could work! LOL



LMAO!!

I got the same email thing Traci, and it's a whole hell of a lot better than the bail out. LOL

Especially with credit card companies and student loan companies, etc etc etc hoping to get their hands in the cookie jar too.

This mess of certain reps trying to spread fear and wide-spread panic is absolutely insane. The bail out is a band aid for a bigger problem and in the short run will possibly work but in the long run will spell bigger and worse trouble and bigger and more powerful govt.

[AmyM]

Here's the website of a respected economist. I don't have a clue what his political views are and honestly don't care which way he goes politically. He has some interesting reads and comments on the "crisis"
http://mjperry.blogspot.com/
About the community reinvestment act
http://www.ffiec.gov/cra/
More stuff
http://www.foxbusiness.com/story/markets/market-overview/myths-financial-crisis/

Did you know the bailout plan also contains foreign banks?

[ColleenSwerb]

Thanks for the info Amy, I'm gonna check it out tomorrow.

I didn't understand why my friends were all up in arms. It just didn't make sense to me for soem reason, for the government to take over banking. I mean cripes, they can't do anything right, why give over ALL our money too? LOL!

[crecia27]

Thats a considerable mathematical error!! There is still something so wrong about CEO's stuffing up and still walking away with their whopping paypacks intact. Happens worldwide unfortunately!
I love the spreading of wealth concept though $425 wont really make a huge contribution to that ideal!!

I was just saying the same thing to my dad - its not fair those CEO types will still likely get huge bonus packages! :thumbdown: