Originally posted by: SP33Demon
Originally posted by: Evan Lieb
Without a massive capital infusion and increase in the money supply you'd have crippling contractions in GDP, wages, and investment expectations. We'd likely lock in a small generation of U.S. investors with overly cautious expectations to risking assets in equity investment, much the way we locked in an overly-cautious generation until the 1960's due to the crippling nature of the 1929 crash and Depression. This is what a lot of these loony laissez-faire laymans don't get; the investment-related expectations of the public are just as big a concern as practically anything else, be it recapitalizing firms or getting rid of toxic debt. To claim some oversimplified yeoman nonsensical solution like "moral hazard" or "gov't intrusion = bad" is absurd. This idea that you can't run an economy off of debt is, plain and simply put, something that laymans don't get because they don't understand TVM; time value of money. Bottom line is that if you can borrow dollars now, pay back the principle (plus interest) later, while investing those loaned dollars for years in the meantime, you'll come out ahead if you invest well.
In any case, there's simply no reasonable way to claim that the solution is let the debt go unpaid or to scrap the New Economy of the last 25 years as Michael Hudson (cited in the OP) would have us believe. You cannot "let" these institutions fail or, even worse, end up doing no bailout whatsoever (gov't-assisted or not) without entering into an inevitable multi-year or even decade-long domestic financial slowdown. And this is to say nothing of how foreign nations would react to our slowdown; our decisions will have a direct impact on global market expectations like you wouldn't believe.
To all these dolts, especially the fantasy-land far right Republican nuts in Congress that dare to put this country in jeopardy by threatening to not pass any bill whatsoever (by filibustering), due to misguided ideological BS about the evil of gov't bailout, I say shame on you. Put your country first you rejects, otherwise you without question risk a global fucking depression.
Fannie/Freddie (200 billions through 2009), Bear Stearns (29 billion), AIG (85 billion), and the big 3 auto companies (25 billion) were all bailed out or given/in process of getting unprecended loans from tax payers. I think the government has already done more than enough, 700 billion on top of the 300 billion+ already spent for aforementioned companies is
ridiculous. Where will it end after that big (700 billion) a precedent has been set? Our country will soon be pussified into a bunch of whining crybabies who won't take responsibility (if it isn't already that way already). Car makers, insurance lenders, financial giants, and soon other sectors will be asking for handouts.
You say the House Reps are filibustering, I say they're wisely deliberating. And I hope this stupid 700 billion dollar loan is never approved, 200 billion was enough for Fannie/Freddie. Somebody needs to stand up for the American taxpayer, our children, and
take responsibility for this house of cards (that the rich companies created) falling on its face.
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