Quote Originally Posted by GoddessHerb
The following is not directed to TheMetal1 but rather is a general response to their and others' posts:

Whether we bail "them" (the people that created and profited handsomely from this mess) out or not we're still fucked, it's just a matter of who feels the pain and when. The boomers will postpone the pain (like they always do) until after their dead (if they can) and their kids down to their great great grand kids will be paying for this in the form of UN-CONTROLABLE INFLATION! Despite what the Fed wants you to believe.
Not really, let me explain.

One can only analysize the situation as you have, if you study Austrian Economic Theory. The Austrian school believes that inflation will arise when government injects money into the economy. Yet how does the money supply increase? Money is created (mostly) in banks. The banks that you and i work with every day... Bank of America, Chase, Washington Mut, Credit Unions, etc..., all have a FDIC license to create money. Whenever someone gets approaved for a loan of any aspect, the banking system which is authorized by the federal reserve creates the money it was loaning (actually it creates 90% of it, but thats another story within itself) to the loanee. As the loanee repays the the nominal value of the note, a bit of interest (cost for doing business) is attached in various ways, and when the loan is payed off, the transfer of money earned and paid through a (x) number of years offsets the initial creation, and ties it directly to nomitive and real growth. Therefore, no inflation has been created through this transaction.

Tell me, what happens when a person defaults on their loan?

With a bail out the pain will be slow and last a lot longer like a bad toothache. Without one it will hurt more but the pain will end sooner like a ripping off a band aid. Either way we're fucked and it's going to hurt! A lot! Oh and giving these guys more money isn't going to help any taxpayers in the end. It's just the only place they haven't sucked dry... yet. But as you give them more and more money inflation will rise so it will definitely hurt us on the way to the end. (can you say computer chips as money?) This is a generality for simplicity's sake if you care to debate the points please start another thread and I will be happy to explain and discuss the entire situation (as I see it) in greater detail.
Ehh... Think about it along the lines of stitching up a brain surgery. If you rip those stitches out, the "situation" will bleed to death. That is what will happen if taxes are maintained, and credit is not freed up. We are talking a 10% across the board cut in the labor force, with an additional 5%-10% in the following year.

It's sad that the citizens of this country are so clueless about money management, financing, and currency. People just don't understand the situation (including all those smarty pants' in government and business) and react out of fear due to ignorance.
Yes it is a shame.

I'm sure I could explain it to people but I just don't think they even care to understand it. And that's where the problem lies. People are so under-educated and mentally lazy that they don't know how to think anymore. They believe what bullshit they're fed as long as they don't have to feel "bad" about anything. Feeling "bad" (ever) is generally seen as a disease now. "We" (society as a whole) medicate people, or remove them from society completely, (via hospitals and prisons) for feeling "bad" so that we don't have to feel "bad" because they do. So they won't "infect" "us" with their bad feelings and "we" can go on blissfully ignorant to the reasons these "bad" people feel "bad" in the first place. The many make the few carry the emotional burden of all for the betterment of the many to the extreme detriment of those few. The beginnings of authoritarianism in our society. We shall see which road this leads us down next.
I am not trying to put my foot down your throat, but you really are not well informed in regards to how this bailout actually works, and the possible ramifications of tax payers getting stuck with paper that is worth pennies on the dollar.

I've been feeling "bad" for my entire life because I can see the big picture way ahead of just about everyone else, and I knew this "crisis" (among others) was coming. And now I'm glad that everyone else can't ignore that there's a great big reason to feel "bad", because things are BAD! And they're only going to get worse with or without a bailout. I can't even tell "you" (reader in general) how fucked "we" truly are. Then again I'm not sure "you" are ready to understand it as it will most assuredly make "you" feel "bad" too.
The Keynesian's will always be able to prop up the system through government intervention. Human economic activity acts in seasons, where booms and busts of the business cycle change the overall psychology of consumption/ production activity. Yet in order for the system to work, real GDP growth must be achieved, as well as the practice of "buy now pay later".

"We" should not accept ineffective government and its ineffective policies, "we" have the right, and the duty, to remove an inept government and it's arcane and obtrusive policies and install a new and better one. (maybe this time we can keep it simple, loophole free, with liberty and justice for all, not just those with enough money to buy it) It's just a matter of getting the authoritarians (followers and leaders alike) on board, and that is an almost impossible task.
When this bill goes through, it will be quite effective of freeing up banks to make loans so that regular economic activity can begin. As we speak, many large businesses that require financing to sell a majority of their products will have to make drastic cuts in cost, translating into jobs being lost. If Joe's Ford cannot sell half of the cars on his lot because the financing simply is not available, what do you think will happen to Ford? Ford will have to lay off people, and what do you think that will do to their spending patterns; will they spend less or more on things like going out to eat, movies, etc...?

The fucking economy will collapse, causing firms to lower their prices to remove of inventories. This in turn will enact a deflationary phenenomon, which will cause production of commodities to decrease to offset built in costs. What happens when their is a shortage in iron? How about oil? Shortage in oil means shortage in transportation, means shortage in food at grocery markets. Do you believe a responsible government would allow such a scenario?

I feel like i am repeating myself, so i will stop there. You need to go back and rethink the ramifications of the situation. Ron Paul believes in no intervention from the federal government. Yet the good Dr. also believes in dramatically lowering taxes. You cannot prevent collapse without the proposed bailout plan unless taxes are cut big time. Since they cannot or will not, we are left with really only one option.

:jointsmile: