$700 Billion: Picked Out of Thin Air?

[RainDog]

You won't believe where that $700-billion bailout figure came from!

 http://latimesblogs.latimes.com/washington/2008/09/bailout-plan.html

     You know where that very important $700-billion figure came from?

    Here’s a quote from that Forbes story:

    “It’s not based on any particular data point,” a Treasury spokeswoman told Forbes.com Tuesday. “We just wanted to choose a really large number.”

    They made it up to be sufficiently ginormous to frighten everyone into rapid action.

    And it worked.

 http://www.forbes.com/businessinthebeltway/2008/09/23/bailout-paulson-congress-biz-beltway-cx_jz_bw_0923bailout.html

[TexasShooter72]

What I wanna know is where that money came from or is being borrowed from.  We're in debt as it is...   where is it coming from?  At what rate will it need be payed back?  I mean, sure it's a decent plan to keep Wall Street afloat but what does it really do?  NOTHING!

It digs us in a deeper hole than we already are.  What's funny to me is watching Bush(who's largely responsible for this mess) sit-in on the board trying to make it work.  

[Big_Bill]

Well Matt,

That money will come from the Federal Reserve Bank, a private institution created by Congress to do there job of controlling and printing money ! The Federal Reserve will just print it ! then charge the people of the United States Interest on it also ! After they lend it to us, to pay out this huge debt. The interest rate will be determined by the Federal Reserve Bank ?

Now if the Congress was in control, they could tell the Fed to start lending money, at a fair rate, and this would have the same effect as this GIANT BAIL OUT. But the borrowers would be responsible for the payments to the Banks they borrowed from. With the Congress doing the borrowing, WE are Responsible for the payments, and the debt, so if these people default, they don't have to pay a thing, unless they personally put up collateral to US, The Government.

Just look at all the sweetheart deals the CEO'S of Fanny and Freddy have made with private banks, do you think they will ever pay back that money ? I think NOT !

This time you and I are going to be left holding the 750 trillion dollar default, as the CEO'S walk off with OUR money.

Who's side is OUR Government on ? Not OURS !

Bill

[RainDog]

I can't say I've heard anyone say that Bush had anything to do with this crisis. Although there's people who'll blame the-president-they-hate every time they get a pimple on their butt, let's be reasonable here.

 President Carter in 1977 signed the Community Reinvestment Act, which pushed Fannie and Freddie to aggressively lend to minority communities.

 Clinton saw homeownership as a way to open the door for blacks and other minorities to enter the middle class. Clinton ordered Robert Rubin's Treasury Department to rewrite the rules in 1995. Meant to help minority families afford homes, a noble idea, it instead led to a surge in mortgage lending that has levered our financial system to the crisis situation we see today.

 That said, the real villain here is not the deregulation matter itself, but the government's failure to develop new oversight to deal with the deregulation.

 With the new regulations in place, Fannie and Freddie gobbled up the market. They borrowed $1.5 trillion from U.S. capital markets with government guarantee of the debts.  

 The problem is that many of those loans have now gone bad. Many, many.

 Anyhow, we'll see a lot of partisan Blame That Party theories in the future, but I don't think you'll find Bush in the mix.

[TexasShooter72]

Bush is responsible for creating the largest US debt in history.  Our financial institutions are a different ballgame.

[RainDog]

What Caused the Increase in Federal Spending During the Bush Administration?

There is a persistent myth that the increase in federal spending during the Bush administration is due, in large part, to an increase in spending on domestic programs. But the increase in federal spending is mostly due to changes in defense expenditures, and not all of the increase is war related:

http://economistsview.typepad.com/economistsview/2008/03/what-caused-the.html

Now... you remember what happened, unexpectedly, a few years back that started these added military expenditures? Bush did that?

If it's a "No War in Iraq" thing, please remember that the democratic congress passed the Authorization for Use of Military Force Against Iraq Resolution of 2002, which the majority of Americans supported as well.

People blame the president-of-the-day far too much for events beyond any one person's control, and please remember that the Executive is but one of three branches of government in the US.

Anyway, blame whoever you wish. Blame the Cat in the Hat. Everything's ultimately his fault, isn't it?

I've got a really, really terrible sinus headache, and feel icky generally. Think I'll go crap out for the rest of the day. Ain't livin' long like this.

Seeya,

Parks

[TexasShooter72]

It's the Cat in the Hat!  I was wrong(again).  I knew it was an inside job!

[dave2288]

well, i agree with raindog on this one...although many ppl don't like bush, and think he's a complete moron, i don't think that he is the reason for what we are going through right now in washington.  bush was actually starting to do a little better when it came to this country's economy, and jobs, etc., but the real problems came about two years ago...what happened?  lets look at the election of that year.  in the last two years, things have worsened at an incerdible rate, and are only expected to get much worse(of course, everything is thought to get worse, so who really knows).  i completely understand that it is all a chain reaction of things from years and years ago, but, what is important for ppl to realize is that bush didn't destroy this country, and damn it to hell like everyone thinks.  but what do i know, i'm just some 20 yr old.  ya know what i think about all of this?...i think i'm gonna go shoot my gun a bit.

Dave