Four More Years? Of This?

[BoberFett]

What you propose would have taken months if not several years. The government has no such mandate or even the infrastructure required to do something like that on such a massive scale with no notice. An act of congress would be required. Meanwhile the economy would be a smoking ruin.

Consolidation was an unfortunate but necessary compromise that had to be made at the time. It's possible to unwind that over the long term as well if the gov will pass regulation to that end.

I don't remember government having the mandate to run an auto company either.

 

[BoberFett]

Sorry, there is no way credit unions could have stepped in to replace institutions like BoA, Citi, Merrill Lynch, Morgan Stanley, Goldman Sachs, etc.

And if you think FDIC insurance was going to save consumer deposits from a massive bank run... you are just dead wrong.

The bailouts were an unfortunate necessity. What needs to happen now are tougher regulations and criminal investigations in to wrong doing. No more slaps on the wrist with fines levied against the institutions. Real people need to be accountable for fraud. And regulations need to be tough enough to make the financial system stable yet open enough to make sure capital ends up in the right hands. Not an easy task by any stretch.

If instead of putting money into the hands of too-big-to-fail banks, that same bailout money could have been used to back FDIC so it would make it's way back into the hands of savers and investors, instead of those people that fucked us over to begin with. At that point, the money would quickly find it's way back into more capable hands and we'd have no more BoA or Citi to worry about. Instead we're right back where we were. Or worse. The banks have gotten even bigger.

 

[Darwin333]

No, we should run as large a deficit as needed to not destroy the economy which would make the deficit worse.

The way to reduce the deficit is to grow the economy, not send it into a tailspin.

You still can not escape the mathematical fact that as you withdraw the deficit spending (as a percentage of GDP) the economy must contract by at least as much.

I am not arguing on what is "right or wrong" I am simply stating facts. It doesn't matter when we (or if) we decide to cut the deficit the math doesn't change.

But just for fun and because I am bored for a minute waiting on bid results, lets play your "grow our way out" game. Lets assume 3% increase in GDP a year and just to make it easy lets assume the Federal revenue rises at exactly the same rate. Lets also assume that Federal spending is frozen at what it is right now. It will take 11 years to "grow" our revenue to our current spending by year 12 we will no longer be running a deficit.

That doesn't sound to terribly bad now does it? But wait, we forgot about our good buddy inflation. Lets assume a steady 2% rate of inflation which I believe is actually below the norm (3% maybe?), at 2% a year every year by the time we reached our "breakeven" point we would have effectively cut our budget by a full quarter. If the trend continues as it looks like it will, the bulk of the countries wages will not keep up with inflation so its kind of hard to bank on that to cover the difference.

Wait, it gets better. Since we are not raising the budget at all every single year it effectively gets "cut" as a percentage of GDP. That is we are withdrawing deficit spending from the economy and the economy must grow by at least that amount just to break even. The left constantly argues that the .gov gets more than a dollars worth when it spends so it might be significantly more than that.

And finally the kicker, Medicare/medicaid has grown at roughly 9% a year for decades and with the boomers set to retire the people enrolled in them are about to expand much faster. We haven't accounted for a single dollar of that growth in the above and huge cuts in benefits would be necessary long before we "grow" out of our deficit.

I know you can nitpick my methods above but it was just for a quick demonstration to show you how absurd "growing" our way out of just the deficit is. Hell, I am not sure if we can "grow" enough just to keep up with medicare/medicaid much less tackle the rest of the deficit.

 

[K1052]

I don't remember government having the mandate to run an auto company either.

The government provided the DIP financing out of TARP so GM could go through an orderly and accelerated chapter 11 and in return the gov got equity in the new company. The government isn't "running" GM.

 

[K1052]

If instead of putting money into the hands of too-big-to-fail banks, that same bailout money could have been used to back FDIC so it would make it's way back into the hands of savers and investors, instead of those people that fucked us over to begin with. At that point, the money would quickly find it's way back into more capable hands and we'd have no more BoA or Citi to worry about. Instead we're right back where we were. Or worse. The banks have gotten even bigger.

Several trillion dollars worth?

 

[Texashiker]

The bailouts were an unfortunate necessity.

That is short term thinking.

If the banks and wall street were not bailed out, the sun would still rise tomorrow.

Let the banks fail, it will not be the end of the world.

Mankind made it for tens of thousands of years without banks, they are a man made problem, a problem that we would probably be better off without.

 

[K1052]

That is short term thinking.

If the banks and wall street were not bailed out, the sun would still rise tomorrow.

Let the banks fail, it will not be the end of the world.

Mankind made it for tens of thousands of years without banks, they are a man made problem, a problem that we would probably be better off without.

The world also didn't have 7 billion people in it tens of thousands of years ago who are dependent on a globally sourced food supply. Or even back in 1930.

 

[BoberFett]

Several trillion dollars worth?

I'm pretty sure we've borrowed several trillion dollars in the past few years to pay for dumber things than bailing out people who had money saved in banks that failed. This could have been an opportunity to bail out the average American, but we bailed out the wealthy instead and put it all on the average American's tab in the form of future inflation and national debt.

Well done.

Well done indeed.

 

[Saint Nick]

Lol at people typing on a forum in 4chan green text. What a bunch of idiots.

That's all.

 

[K1052]

I'm pretty sure we've borrowed several trillion dollars in the past few years to pay for dumber things than bailing out people who had money saved in banks that failed. This could have been an opportunity to bail out the average American, but we bailed out the wealthy instead and put it all on the average American's tab in the form of future inflation and national debt.

Well done.

Well done indeed.

I mean 3-4 trillion dollars in a few days. That's what it would take to cover all the existing FDIC liabilities assuming they all came due in short order. Upwards of $7T if you want to cover everything above the deposit limits.

TARP loss is on track to be less than 10% of the total. The fact that there was not sufficient time to implement any other alternative also should not be forgotten.

 

[First]

Obama won by 9.5M votes in 2008, and he'll win by another roughly 5M+ votes this election.

With a 15M popular vote margin, it's pretty clear where the country is and where it's headed, and it's not conservativism. Sorry.

 

[Matt1970]

Obama won by 9.5M votes in 2008, and he'll win by another roughly 5M+ votes this election.

With a 15M popular vote margin, it's pretty clear where the country is and where it's headed, and it's not conservativism. Sorry.

Explain 2010 then.

 

[jman19]

That is short term thinking.

If the banks and wall street were not bailed out, the sun would still rise tomorrow.

Let the banks fail, it will not be the end of the world.

Mankind made it for tens of thousands of years without banks, they are a man made problem, a problem that we would probably be better off without.

No, it's not short term thinking. There is a reason I said that solutions were needed after the bailouts so that they won't need to happen again. They were a temporary solution to a bigger problem.

If you think think it we would have been better off with an even more massive blow to the economy... I don't know what to say to you. Glad to know you are willing to sacrifice others for your ideology though.

 

[Darwin333]

What you propose would have taken months if not several years. The government has no such mandate or even the infrastructure required to do something like that on such a massive scale with no notice. An act of congress would be required. Meanwhile the economy would be a smoking ruin.

Consolidation was an unfortunate but necessary compromise that had to be made at the time. It's possible to unwind that over the long term as well if the gov will pass regulation to that end.

The banks already have the infrastructure required all they needed was money which we provided anyway via an act of Congress....

The only difference is that today the bad positions would actually (or hopefully) have been unwound and there would be much smaller chunks of the big banks sold back into the private economy. No more too big to fail, no banksters "socializing losses", no incentive to do it again as there is today, etc...

 

[BoberFett]

I mean 3-4 trillion dollars in a few days. That's what it would take to cover all the existing FDIC liabilities assuming they all came due in short order. Upwards of $7T if you want to cover everything above the deposit limits.

TARP loss is on track to be less than 10% of the total. The fact that there was not sufficient time to implement any other alternative also should not be forgotten.

The Fed can create trillions overnight. Big deal.

Not to mention that the assets of those failed banks wouldn't magically disappear. They still have portfolios worth hundreds of billions if not trillions that would be sold off to repay a large chunk of that initial amount. There would be some outstanding debt that the taxpayer would have been saddled with after the dust settled, yes. But it would have been a major flattening of the distribution of money in this country, with the truly wealthy taking the brunt of it. Consider it a regressive bailout. Isn't that the goal?

Instead we have this.

http://washpost.bloomberg.com/Story?docId=1376-MB1C740UQVI801-63GKJO1C62EN3H4DSG4OT12IL9

The average American got fucked in the ass by the bailouts, yet the same people who complain about awful Republicans and the wealthy are the biggest cheerleaders of the bailout and other failed government handling of the economy.

 

[Darwin333]

I mean 3-4 trillion dollars in a few days. That's what it would take to cover all the existing FDIC liabilities assuming they all came due in short order. Upwards of $7T if you want to cover everything above the deposit limits.

TARP loss is on track to be less than 10% of the total. The fact that there was not sufficient time to implement any other alternative also should not be forgotten.

Come on, in order for that to happen that would mean that every last person would have the will and desire to pull out all of their money, not put it in another bank, AND all of the banks assets were either worthless or unsellable which is to say an impossible scenario.

I get where you are coming from but it just isn't possible in any situation besides friggen mad max nuclear war that the FDIC would have to cover every last dollar it insures.

 

[K1052]

The Fed can create trillions overnight. Big deal.

Not to mention that the assets of those failed banks wouldn't magically disappear. They still have portfolios worth hundreds of billions if not trillions that would be sold off to repay a large chunk of that initial amount. There would be some outstanding debt that the taxpayer would have been saddled with after the dust settled, yes. But it would have been a major flattening of the distribution of money in this country, with the truly wealthy taking the brunt of it. Consider it a regressive bailout. Isn't that the goal?

Instead we have this.

http://washpost.bloomberg.com/Story?docId=1376-MB1C740UQVI801-63GKJO1C62EN3H4DSG4OT12IL9

The average American got fucked in the ass by the bailouts, yet the same people who complain about awful Republicans and the wealthy are the biggest cheerleaders of the bailout and other failed government handling of the economy.

Not even close to the same thing.

Getting the money back out of a failed bank's assets can take years and you'll still only net about fifty to seventy cents on the dollar best case. Hell they're still trying to unwind the shitplile over at Lehman and it's been five years.

If you want to get into banking reform that will again separate the I banks from the commercial banks, impose more capitalization requirements, and curb speculation from the I'm wholly in favor. Those kinds of topics should not be debated while the industry burns however.

 

[BoberFett]

Not even close to the same thing.

Getting the money back out of a failed bank's assets can take years and you'll still only net about fifty to seventy cents on the dollar best case. Hell they're still trying to unwind the shitplile over at Lehman and it's been five years.

If you want to get into banking reform that will again separate the I banks from the commercial banks, impose more capitalization requirements, and curb speculation from the I'm wholly in favor. Those kinds of topics should not be debated while the industry burns however.

You seem to be under the mistaken notion that the industry is no longer on fire.

 

[K1052]

Come on, in order for that to happen that would mean that every last person would have the will and desire to pull out all of their money, not put it in another bank, AND all of the banks assets were either worthless or unsellable which is to say an impossible scenario.

I get where you are coming from but it just isn't possible in any situation besides friggen mad max nuclear war that the FDIC would have to cover every last dollar it insures.

Why is that inconceivable? People will hoard cash during economic turmoil and that will be magnified by the severity. You also just wiped out all stockholders of financial institutions everywhere. It would be impossible to float a public bank on the stock market so you'll end up with private banks and even less transparency. Raising capital would also be highly problematic without access to the stock market.

It would take years (or decades) to lay off those assets and get any amount of money back while every other dead bank is trying to do the same thing.

 

[K1052]

You seem to be under the mistaken notion that the industry is no longer on fire.

A moderate torpor would be a better description. Europe isn't helping anything either.

 

[Throckmorton]

I'm pretty sure we've borrowed several trillion dollars in the past few years to pay for dumber things than bailing out people who had money saved in banks that failed. This could have been an opportunity to bail out the average American, but we bailed out the wealthy instead and put it all on the average American's tab in the form of future inflation and national debt.

Well done.

Well done indeed.

Conservatives wouldn't allow bailing out the average American

 

[Throckmorton]

You still can not escape the mathematical fact that as you withdraw the deficit spending (as a percentage of GDP) the economy must contract by at least as much.

I am not arguing on what is "right or wrong" I am simply stating facts. It doesn't matter when we (or if) we decide to cut the deficit the math doesn't change.

But just for fun and because I am bored for a minute waiting on bid results, lets play your "grow our way out" game. Lets assume 3% increase in GDP a year and just to make it easy lets assume the Federal revenue rises at exactly the same rate. Lets also assume that Federal spending is frozen at what it is right now. It will take 11 years to "grow" our revenue to our current spending by year 12 we will no longer be running a deficit.

That doesn't sound to terribly bad now does it? But wait, we forgot about our good buddy inflation. Lets assume a steady 2% rate of inflation which I believe is actually below the norm (3% maybe?), at 2% a year every year by the time we reached our "breakeven" point we would have effectively cut our budget by a full quarter. If the trend continues as it looks like it will, the bulk of the countries wages will not keep up with inflation so its kind of hard to bank on that to cover the difference.

Wait, it gets better. Since we are not raising the budget at all every single year it effectively gets "cut" as a percentage of GDP. That is we are withdrawing deficit spending from the economy and the economy must grow by at least that amount just to break even. The left constantly argues that the .gov gets more than a dollars worth when it spends so it might be significantly more than that.

And finally the kicker, Medicare/medicaid has grown at roughly 9% a year for decades and with the boomers set to retire the people enrolled in them are about to expand much faster. We haven't accounted for a single dollar of that growth in the above and huge cuts in benefits would be necessary long before we "grow" out of our deficit.

I know you can nitpick my methods above but it was just for a quick demonstration to show you how absurd "growing" our way out of just the deficit is. Hell, I am not sure if we can "grow" enough just to keep up with medicare/medicaid much less tackle the rest of the deficit.

Fine, let's reduce the size of government gradually through attrition and raise taxes to cover Medicare and Social Security.

But the demand that conservatives are making that the president cut deficit spending to zero, and somehow that will help the economy, is ridiculous.

 

[BoberFett]

Conservatives wouldn't allow bailing out the average American

When the bailouts were being debated, how many Democrat congressmen pushed for bailing out the average American?

 

[dank69]

How can we expect people who have net negative taxes to care about the fiscal responsibility of the government?

Our tax system needs massive reform and, at worst, people in poverty should have an almost zero tax burden.

Those people pay other taxes. Paying more and labeling it 'income tax' isn't going to magically make them start thinking about the government's budget.

 

[buckshot24]

Those people pay other taxes. Paying more and labeling it 'income tax' isn't going to magically make them start thinking about the government's budget.

They pay hidden taxes for the most part and after getting all the credits such as EIC a lot of people pay a net negative total tax. I think a flatter tax would not only be fairer but get people to think about federal spending. We have too many people who depend upon the government for their sustenance.

I also think that the "Obama phone" lady who has probably been on welfare had food stamps and countless other entitlements gets the same vote that I do is absurd. I'm not better than her but I am a much better addition to the society than she is. I create wealth through my ideas, I have 10 people relying solely on what I create providing for their families. I buy a ton of stuff, I pay a ton of taxes, I know more about the issues but her vote carries as much weight as mine does. (although I don't live in Ohio)

She's enslaved by sucking on the government tit. That sort of thing is the most inhumane aspect of entitlement society.

Americans used to have to own real estate to vote. Doesn't sound so bad at this point.