So I watched President Bush last night. (Keep in mind- I am a democrat, never liked Bush.)
Anyways, to start off- he did seem to be trying to 'sell' this bailout package. I thought president's talk and people do.
Bush sounded like he was trying to convince us to 'buy' something. And I understand the bill needs to pass congress, and Congress won't pass it without the public's support...
But last I checked there were still enough people who trusted Bush to support his plan. In addition, the plan SOUNDS good to average people who don't pay attention to economics and industry. I mean, to say that the govt is going to use $700 billion to put into the banking system so that banks don't fail, lending still continues, the stock market recovers, and in several more years the money will be repaid plus interest...well- I think that would get plenty of support from average people. Especially with the economy as it is- I think people are looking for anything with the promise of improvement. So just the president's endorsement should be enough to pass this bill.
But instead the president sounded very alarming. He used sensational words to get an extreme emotional reaction, and predicted an outcome worse than I anticipated was possible...he really strongly implied that America as we know it will be wiped out if the bailout package does not pass.
So my questions are these:
1. Now- what if it does not pass? Will Americans go into a panic because they thought this was the answer and without it America is doomed? Pres Bush really suggested there were no alternatives besides the bailout. He just set us all up to panic if the bill does not pass.
2. MUCH more important than the first. What if the bailout passes but FAILS? All the experts are trying to figure out if it will pass...but what if it passes, the treasury invests $700 billion in mortgages/banks, and the economy still continues going downhill? What are we putting up at stake here? What are the risks?
I can't help but remember President Bush's last big idea to start the Iraq war. After the war on terror. And the bombing in Afghanistan. In my book, President Bush has had marginal success in some cases and less in others. Not a great track record.
Therefore...I really am concerned about this bailout NOT WORKING...and I am at a loss to imagine what the government/society/economics/daily life is like in the case of failure or mistakes or mismanagement.
Question regarding this bailout package
September 25th, 2008 at 11:56 am
September 25th, 2008 at 12:09 pm 1222344556
I was going to post a response here, but I think it will be too long. So I'll post an entry on my blog later today.
September 25th, 2008 at 12:16 pm 1222344997
September 25th, 2008 at 12:28 pm 1222345716
Still, while I do not fully understand the bailout package, I do support it. Here's why:
1. I have to agree that there may not be much alternatives. The economic crises is hitting harder than even I think it should be. We're not going to the soup lines or anything, but the weak financial institutions were starting to sink even the good ones, and we can't afford to let that happen.
2. The bailout doesn't necessarily equate to the sound of a flushing toilet. First, Uncle Sam is going to buy up the riskiest stuff, which will re-capitalize our financial institutes and reduce their risk at the same time, improving their outlook.
Yes, while Uncle Sam will have a bunch of sub-prime stuff (including real estate stocks) for a while, it doesn't mean they can't be profitable some day. That's how we are in this mess to begin with, because they were very profitable at one time. Uncle Sam can afford to sit on these until the real estate market improves and perhaps (PERHAPS) even sell them back to the market some day, for a profit! The bonus is that, if Uncle Sam were to pick up these risky stuff, and re-capitalize our financial institutions, there's a good chance that it will speed up the healing process, allowing Uncle Sam to get rid of these risky stuff and maybe even profit sooner rather than later.
3. The bailout is GOING to happen. It's not IF, it's not necessarily even WHEN, but right now, what's being debated is HOW MUCH. The congressional committee wants to start low ($135B), but Henry Paulson and others insist that it is not enough, and ideally need the full amount ($700B), but I think there may be a compromise in the works ($350B now, $350B later if needed). The compromise just might be enough, but we'll see.
I think the bailout will work. The only catch is that we are doing this at the expense of the tax payers, but fortunately, people on both sides of this debate are fully aware of this point. The only debate is over the details.
(Edit: Merch is right. This can get lengthy. I'm only covering what I think are the highlights.)
September 25th, 2008 at 12:34 pm 1222346080
September 25th, 2008 at 12:38 pm 1222346298
Are they using money already in the treasury system..or are taxes going to go up to cover this plan? I was under the impression we already had the money in savings...
September 25th, 2008 at 01:13 pm 1222348381
Sadly, he's the biggest debtor of us all. What is the national deficit up by? I forgot. 2 trillion now? It certainly will be by the time this bailout occurs.
No, I'm sorry to say, but he's putting it on his IOU credit card, literally at the expense of the tax payer.
This weakens our economy even more, and sooner or later, has to lead to higher taxes. Either that or a runaway inflation.
But I'm no economist.
September 25th, 2008 at 04:02 pm 1222358520
Also why are we bailing out corporations but letting people loose their homes? I'd be more pro bailout if it included a cause to also bail out regular people who are in the same dire circumstances like foreclosure. Sure the economy will suffer if these banks go under, but it also will if everyone looses 1/2 of their home value and can't find a job or goes bankrupt from lack of healthcare.
September 25th, 2008 at 04:16 pm 1222359413
Rather than call it 'bailout' he should call it 'investing in America.'
And rather than focus the bailout on Wallstreet, they should say they are ensuring that your retirement locked in the stock market stays safe.
Rather than say they are bailing out CEO's of banks who lent too much credit and mistakenly offered stupid unaffordable mortgages, they should say they are putting money back into the banks so that everyone's money stays safe and local banks don't close down.
Rather than say they are bailing out people who are losing their homes- they should say they are helping to improve the economy so that people will keep their jobs, lending can continue and peoples retirement accounts will increase.
He rightly pointed out that most responcible people do not want to help wallstreet, banks,CEO's or irresponcible people who are losing their homes. Responcible people tend to hate all 3 of those catagories and would enjoy watching those people squirm. But this bailout is really going to keep the 'everyday' people from losing their retirements in a tanking stock market, losing the ability to open businesses through lending, or losing their house due to layoffs and job losses.
Interesting way to look at it. Just goes to show what good public relations and good 'spin' can do. Same package/totally different reaction.