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Thread: Hypocrisy of Bailouts

  1. #1
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    Default Hypocrisy of Bailouts

    Just like a sheep herd mentality, you can hear media stoking the anger of how Average Joe has to bear the burden of the rich people's gambles.

    Here's a news flash

    The top 1% ile pay 40% of the taxes. The top 5% ile pay almost 60% of the taxes.
    i.e the Average Joe doesn't complain about this gross injustice that has been happening over the past hundreds of years, while the $700 B bailout will be pretty much picked up by the rich guys.

    Basically, it is so easy for media to manipulate the herds. Just like Mish's readers, with all their self-proclaimed contrarion views, were manipulated like a sheep by Mish himself

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    Default Re: Hypocrisy of Bailouts

    Yes, but isn't it interesting that 15% of Americans earn 80% of our nation's income?


    Promote yourself and earn more money! This is a business that is owned by strippers for strippers. Let's make that money!


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    Default Re: Hypocrisy of Bailouts

    I assume this is in reference to Mike Shedlock's recent 'Open Letter to Congress' initiative ?



    (snip)"Problem Defined

    Before one can work out a solution, the first step is to identify the problem. The problem is not a lack of liquidity, it is not a lack of trust, it is not lack of consumer confidence, it is not subprime lending, and in fact the problem is not housing at all.

    The problem is consumers and corporations are deep in debt with no way to service that debt.

    Attempts to bail out banks and brokers at taxpayer expense will do nothing but add to consumer debt, weaken the US dollar, and literally waste $700+ billion dollars that can and should go to more productive uses.

    What Caused The Problem?

    The Fed
    Congress
    Fractional Reserve Lending
    The Treasury

    The root cause of this problem is the Fed micromanaging interest rates, the Treasury cheerleading every step of the way, and Congressional sponsored spending that went wild. The critical issue that ties everything together is fractional reserve lending allows banks to borrow money (credit really) into existence with insane amounts of leverage."(snip)

    (snip)"Uncertainty Principle Corollary Number Two:

    The government/quasi-government body most responsible for creating this mess (the Fed), will attempt a big power grab, purportedly to fix whatever problems it creates. The bigger the mess it creates, the more power it will attempt to grab. Over time this leads to dangerously concentrated power into the hands of those who have already proven they do not know what they are doing.

    Why The Paulson Solution Fails

    The Paulson solution fails because it does not help consumers or businesses service debt, it does not create any jobs, it increases the national debt, and it encourages more reckless lending by banks. Attempting to bail out banks on the back of cash strapped consumers is simply doomed to fail.

    If printing money was the solution to all problems, Zimbabwe would be the most prosperous country in the world.

    The Barney Frank Non-Solution

    "We're going to be buying up a lot of mortgage paper" said House Financial Services Committee Chairman Barney Frank.

    Sadly, that will not do a single thing in and of itself to stop foreclosures. All that will do is bail out banks and brokers at taxpayer expense.

    Barney Frank also stated “We should be more willing to write down the mortgages. We’ll become the lender. The government will wind up in a controlling position so that we can reduce the number of foreclosures.”

    Congress needs to ask "How much extra will Barney Frank's proposal cost taxpayers?"

    Were does the madness end?

    As stated earlier the problem is not housing in the first place, and besides taxpayers who pay their mortgages on time should not be subsidizing those who don't!

    Banks Need To Recapitalize

    Paulson wants to recapitalize banks so they can keep lending. Ironically, one of the problems is lending. The US has been on a credit binge to such an extent that I have to ask what more do we need? More Pizza Huts? More Home Depots? More Houses? More Nail Salons? More Car Dealers? What?

    What is the urgent need to lend still more?

    We are in this mess because of too much reckless lending. We do not need more lending, we need more saving!

    Paulson's idea that more lending is needed is ass backwards. Paulson's proposal cheapens the dollar, and discourages the one thing that is desperately needed: saving.

    Alternatives Discussed

    In the mad rush to push through this package, Paulson states it is better than the alternatives. That is an interesting statement because no alternative have even been presented to Congress, let alone discussed.

    Shouldn't there be a discussion of alternatives before doing a mad dash to sign a $700 billion package?

    Paulson is attempting to hoodwink Congress to pass his plan without any discussion of alternatives. I believe the Paulson proposal is the worst of all solutions in that it bails out banks at the expense of the taxpayer and the taxpayer gets virtually nothing out of the deal: no jobs, no tax relief, no health care.

    Paulson claims that taxpayer will benefit by the bailout indirectly because one the government owns the debt, servicers will be more willing to negotiate terms. Once again, it will be taxpayers on the hook for any negotiation granted. Paulson conveniently ignores this cost as does Barney Frank.

    Taxpayer Gets Nothing From Current Bailout Proposals

    The taxpayer gets nothing for this bailout $700 billion. Actually the taxpayer gets a negative benefit because the Paulson and Frank proposals will cheapen the US dollar, increase the deficit, and ultimately cause prices of imported goods to rise for everyone, while saving a relative few."(snip)

    (snip)"Congressional Spending

    Congress needs to admit its own role in this mess. Congress passed hundreds of programs to make housing more affordable. They all failed including the biggest failure of all: Fannie Mae and Freddie Mac.

    It should not be the role of Congress to promote housing vs. renting. The very act of doing so creates an artificial demand for housing. Ownership society madness culminated with many financially unqualified to buy a house buying house anyway because Congress and the White House promoted the idea.

    Congress is also directly responsible for deficit spending and that weakened the US dollar. Indeed there was virtually a panic out of dollars for this reason. Adding another $700 billion to the deficit as Paulson is asking you to do is adding insult upon injury. Don't do it."(snip)

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    Default Re: Hypocrisy of Bailouts

    THe irony that seems to be lost is that IMO most or at least a lot of americans even including business small and large a like are not as Paulson would like to get us to beleive "desperatley clamoring for loans"

    They have all the debt they want right now, thankyou very much, the last thing they want is more.

    I have a mortgage that I ave been paying on time for years, a littlebit of CC debt but if I were denied a single dollar in credit from now until whenever I could care less.

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