I gotta rant about the bail out plan

[SyntheticShield]

Okay first, you may not agree with my position and thats fine I dont expect anyone to just say well Scotty said so and so, I'll agree with it. Secondly, as with many of my posts, this may be long, LOL

I have several issues with this bail out is just completely insane. I am completely dismayed at the fact they have even considered this. How in hades do they jump so fast to bail out people that used very questionable business practices. Are they telling me that I can run my business in such a way that if it should fail they will come prop me back up? Heck no. Where was all this money when the housing market crashed. Mind you, I dont have a TON of sympathy for people that took out loans they knew dang well they could not afford on a gamble the market would continue to improve and off set their loan. But at least if you are going to help anyone out, why not start with the people that are going to be out on the street if they dont get help? The wall street execs are not going to be begging for money on the local corner.

Next, this morning I was listening to updates about the bail out and one political figure, I believe one of the represenatives, was quoted as stating that this is a hard pill we have to swallow. WHAT?!?!? You're telling me that I contributed in no way to this, benefited in no way from this and I have to swallow the pill of bailing out people that could care less about me!! How dare you!

Next, they are just giving this money to wall street as I understand it without any proposal that they pay this back. We are taking all the housing debt in the 'hope' that things will improve and we (the gov't) can sell that debt and offset some of the cost, break even or even make a little money. How many of you will take a bet that in the near future we will see a tax increase. Take MORE of our money to bail out people that should be in jail.

For those of you that dont know I work for Verizon Business, formerly MCI, formerly WorldCom. Did we get bailed out? NO! Where is Berney Ebbers? In jail!! Where are the Enron execs? In jail. Did they get a bail out? NO! I lost nearly $20k in stocks and stock options when WorldCom failed. WHERE IS MY BAIL OUT?!?!?! That was my house I was planning to buy. Not with a intrest only loan or sub prime loan or any other hoaky traditional bypass. NO, I was going to be responsible and use a traditional loan, fixed intrest. And that doesnt include what Ive lost in my 401k because of the market downturn.

Why arent the people that are responsible for this mess being pursued and jail time being sought after? Why are they getting away free? Heck they are doing better than that, they are getting money and lots of it. All the risk they took we are now holding with this bailout.

Next, the premise of this bailout actually more like a theory is that if we bail them out and take on all this bad debt that the banks will be free to lend money. HELLO!!!!!! isnt that what got us here in the first place? Furthermore, what if they dont, then what? We'll be holding nearly 3/4 of a trillion, thats TRILLION dollars in bad debt in a downward economy. I tell you what, how about you give my just 100 billion and let me go to the casino, I think I'll fair better.

Our Gross National Product is in the area of 4 Trillion dollars and we are propsing of giving away nearly 1/4 of that to reward those that took such terrible risks. If we MUST do this, how about a 700 billion dollar loan? Has anyone thought of that? Why must we just give them the money? Lets loan it to them and I'll be generous and make it low intrest. Pay us back and intrest can go to reducing my taxes, why is no one proposing such ideas?

Oh and on top of all this, we are giving BILLIONS to the auto industry as a loan to help them retool to make more efficient vehicles. HELLO!!!! How long have we been dealing with elevated gas prices? What, three years now? They are just NOW getting on board and want us to lend them money to do it? How long has the Toyota Prius been around? And your just now getting a clue and want use to lend you the money to do it?

Has anyone read the bailout plan? THAT thing is scary. It give way too much power to a select few and in many areas is really vaugue.

Then to top it off, they added in to the new revision of it a reduction in the Alternative Minimum Tax. The opposers to this are saying that any reduction in taxes should be 'paid for'. HELLO!!!!! Why do you have to reduce my tax in one area only to steal the money from me in another? Here's a novel idea. HOW ABOUT YOU PAY FOR IT BY REDUCING WASTEFUL SPENDING!!!

Im telling ya, Im so mad about this that I could just spit nails. We, the average citizen are not even a consideration in this proposal. They have proven that by not coming to the rescue of all the people that have lost homes but jumped at the opportunity to bail out people the KNEW what they were doing.

Oh well, I just had to rant about it. I hope they strike this thing down again. I have already heard on more than one occassion of CEO's saying that there were other ways to do this without the taxpayer intervention. I hope Congress gets totally flooded with hate mail and people voicing their disapproval of this package. Force them to consider other options that dont allow the people responsible for this off scott free.

[Quicklynx]

I totally agree, but we are the middle class... we have ALL the money... 95% of it to be exact. The govt. is corrupt and it has been since before I was born.

I wish I could just become a vigilante and start taking back (by force!!!) our correct rights as human beings in the middle class.

My parents, one has a PhD, roughly make a 200k combined salary a year, and they are struggling and they are budget people. I'm struggling to pay rent, and other bills, and goto school, and then save enough for hobbies so I can somewhat enrich the stressful life I have as a middle class citizen.

I worked all summer, 7 days a week (8 hours, sometimes more), no vacation, no days off, and still couldn't afford one semester, that's right, half a year of school because it's almost impossible to save. I still work but being at school has cut my hours drastically and it is rough. I hope things get better but it truly doesn't seem like they will. Good luck to the rest of you because I know majority of us have issues like this.

[Sabrewings]

Synth, I'm with you on a lot of it but brutal reality is that if nothing is done we're looking at something that might over shadow the Great Depression. Your analogy of the gov't bailing you out doesn't take into account that these corporations are key pieces to our national economy.

It is my understanding that CEOs are to be disciplined or fired in the bill. Also, the gov't is simply buying up tons of loans and this would then make people start paying the gov't back instead of banks. So, the money would in time be returned.

It is a hard pill to swallow. I hate the idea of it, but on the other hand I don't have a better idea. It doesn't affect me too much personally because I have 100% job security, can't take a pay cut, and am in no need of loans anytime soon. Yet I still want to see things taken care of because enough people I care about are struggling because of the downward spiral.

[Warhellride]

I'm kind of on the fence about the bailout. On the one hand, it creates a huge moral hazard. It also feeds the root causes of our financial problems instead of fixing them, and I'm afraid this will only postpone the mess, and make it worse when the house of cards finally comes tumbling down.

On the other hand, I believe the point of necessary government intervention isn't to prevent recessions (which is part of what created the credit mess: by cheapening credit to feed a slowing economy, thereby fostering unsustainable growth), but to prevent recessions from turning into depressions. Allowing the markets to just tank will hurt many normal Americans, but at the same time buoying those markets to save them creates another moral hazard.

This may sound a bit harsh, but everybody from a single individual to the largest corporation is responsible for its own financial future. This includes being able to ride out the bad times. The market naturally fluctuates, and a large part of the cause of our current problem stems from entities (both individual and corporate) who put all of their money into risky investments, believing that the market would go up forever. Banks didn't have enough cash to back up their risky loans, and individuals confused savings (which are generally government backed) with investments (all of which may lose value). Once they realized that what goes up must come down, they overreacted in the opposite direction, freezing the credit markets and the economy as a whole.

This is a complex, systemic problem, with many intertwined root causes. Trying to throw $700,000,000,000.00 at it to fix it is just as simplistic and flawed as trying to scapegoat a single entity (either political party, CEO's, etc). The proper solution is for housing prices to slowly come down to prices that the average person can afford without ridiculous loans. Next, the credit market needs to stabilize to where people can get the credit they need and deserve, but no more. It also requires the American people to once again separate savings from investments, and to have the financial discipline to save for the bad times while still spend enough to support the economy.

I don't know how to do this, but the bailout definitely won't do it. The only question is, can the average person survive (afford food, clothing, shelter, and retirement) in the economy that will result without the bailout?

[Quicklynx]

I realize that everyone is responsible for their own investments and financial future, however, right now it is almost impossible for a student like myself, or any young professional starting out to make it in the USA because they aren't making enough money to pay bills, or save. Many young people are moving back home with their families, not just for themselves, but because many parents are starting to need a little help as well. Sounds like a 3rd world country.

This is a rough time and I am being real careful with my investments and savings, what little I have. I did watch my 401k drop like a rock this past month though. When I started working at my job about 5 years ago I put almost 30% of my paycheck into my 401k... now I just feel like I worked all that time for nothing, and apparently I did. The market has to eventually go up so I still have all my money in there and don't plan on taking it out. Will it boom and make my money back? Nobody knows, but that is the advantage of being young and being able to make it back by working.

[TCO]

I disagree with the bailout plan and I don't want to get into it but anyone who thinks the government will pay us back after the whole thing is over is a fool. When the government sells everything they will keep that money for themselves and just line their own pockets. The don't get a damn about anyone but themselves.

[Quicklynx]

I agree. They now own 80% of the housing in the country... socialism here we come

[SyntheticShield]

Sabre, not to pick on you in particular, but since you mentioned it.

Im getting sorta fed up with the whole Great Depression analogy and that this is it all over again. Well its not. The great depression was the failure of deposit run banks not investment banks that and the run on the money, that is to say everyone at that time going and taking their money out which is not happening now. So the two events are drastically and historically different. It is, however, whats been thrown out there to instill a bit of fear if not a lot of it.

If you read the proposal H.R. 1434 or something like that, I dont remember the exact number now. It does not provide the protection against golden parachutes that everyone is lead to believe.

1. It states that if a institution that participates in the bailout fails they will not be able to deduct from their taxes any salary over $500k. Salary/Employee pay is a tax deductible item in corporate taxes.

2. It states that any bonuses and such already written into a contract will be honored. Well hello!! Every CEO, COO, etc that will participate in this bailout is currently under contract so they have done didly squat about no golden parachutes.

Also, read again, they say IF a institution fails after participating in the bail out. Does that not bother anyone? IF it fails!! I thought the purpose of the bailout was to prevent the failure. That tells me they are no more confident than anyone else this plan is actually going to do anything at all.

By all accounts the gov't gave no other consideration to any other rescue plan. It was lets take 700 Billion of the taxpayers money and save wall street. No consideration as to whether or not there were other option, no hearings of any value, nothing, just lets get 700 billion and bail them out.

As Quicklynx so correctly stated, its the biggest land grab in our nations history. You think McDonalds or Burger King are in the hamburger business? Think again, they are in the Real Estate business and they use fast food as a vehicle in which to do so, as are many other such businesses do.

I again come back to the point that they are operating on the premise this will free up the banks to start loaning money again, but there is no guarantee that they will. And if they dont what then? We are in the same mess just 700 BILLION more in debt.

Furthermore, if there is no immediate reform in lending practices we are just going to start the cycle all over again and if we leave the same business people in place what do you think you are going to get?

They have made this thing sound so friggin' dire that everyone things that the economy is going to implode tomorrow and that is not the case. Yes, there will be a short time of difficulty as everything corrects but it will pick back up in no time. Everyone is screaming about the lack of credit yet credit is just an outflow of the reserve printing money and have they stopped printing money? NOPE! So there is a current squeeze on credit and that is due in part to the proposed bailout and everyone that is waiting for their hand out so they can wipe their books clean. If there were no bailout talk I dont believe it would be any where near this and if there were no bailout plan, as the money the reserve prints and the big lenders funnel more money into the system, this would correct itself in short time.

Oh well, I guess we'll have to wait and see. The good news in this? Well if you are buying stock with your 401k or seperately, then there is a big sale on wall street right now with the NYSE down as it is, and its an even bigger sale if you consider we are down from a high of 14,100 points. So anything being bought now, once the market recovers is going to reap high rewards because it was bought so cheaply compared to what it was.

[Sabrewings]

Sabre, not to pick on you in particular, but since you mentioned it.

Don't feel picked on.

You're obviously more informed than I, and I admittedly don't get enough time to sit down and read through everything myself. Thanks for the info. Nice to think we're not that bad off.

Now, back to figuring out which nimrod I want to vote for.

[SyntheticShield]

Im doing a write in vote for Larry the cucumber from Veggie Tales. He cant be any worse at this than the crack heads running wall street now.

[Quicklynx]

Sears Holding... prime example of a Company that owns a lot of land and uses its company to fund it. When I first started getting into stocks a few years ago SHLD was the stock to buy because everyone, and almost everyone, thought this stock was going to sky rocket due to all the land it owned. Well good thing I never bought it, and I wanted to real bad at the time, because the real estate market crumbled and down went SHLD with it. This was roughly 3 years ago and if I would have bought it, I would have never seen a gain. It just continuosly dropped. Analysts kept saying stick with it, the God Jim Cramer most notibly, and they just kept misleading people. I listened to analysts, but did research myself, and I made money for the time I was in it, but it took a lot of time and i didn't want to only follow the guidance of investment firms and analysts.

Turned out to be the best move there as they all were making pretty bad decisions...

[02BlueGT]

I agree with Syn 100%, the people that caused this whole mess, the 10+ million dollar a year CEOs, and all the people that got these Sub Prime mortgages for houses outside their income level.......

Why do I now have to jump through hurdles when I go to buy my first house, cause some a**holes that wanted big houses on minimum wage decided to F it up for the rest of us thats why.... Let the system fail, and fall apart we need a new one anyways

[Quicklynx]

I'm not a republican, more on the Democrat side, but I blame Bill Clinton for a lot of this crisis. He passed the bill to make it easy for middle class people, to get easy credit, to live the American Dream on minimum wage.

[02BlueGT]

^^Minimum wage is not the middle class, I understand what you are saying, but it was more him giving access to credit to the lower class in the hopes that they could raise them selves up, witch failed, and actually expanded the lower class........

But I'm only 23, so I don't have the experience to say whether his moves we smart or dumb, but there were a lot of people that took advantage of his efforts

[Quicklynx]

What you said was correct. He wanted them to bring themselves up, but many people are in the lower class for a reason. Many made bad choices with their money, and just continued to do so.

As for my comments, you're right, I used minimum wage and middle class interchangably. Basically I was doing a quick rant but to correct it Clinton wanted the American Dream for all lower, middle, and upper middle class people to rise a bit.

Another reason for this crazy amount of lending is because of technology. The more you lend, the more companies get, the more money they can put towards developing new technology. That was what Clinton actually used to help loosen the credit lending.

[njbrain]

Scott, I agree with you on this one. I'm writing in Ron Paul.

[Quicklynx]

Ron Paul was by far the best out of all the candidates..... besides Steven Colbert

P.S. Brain!! When you getting a 6 speed manual conversion kit together for everyone?!!?!?

[njbrain]

Ron Paul was by far the best out of all the candidates..... besides Steven Colbert

P.S. Brain!! When you getting a 6 speed manual conversion kit together for everyone?!!?!?

Started new thread in the tech lounge. By the way, I don't consider my self the "Brain", it just happens that "Brainard" is my last name. NJ are my initials.

[Quicklynx]

but brain is awesome...