700 Billion dollar bail out.

[tomgallagher]

Does anyone have any thoughts on this subject one way or another.?

[StumpyDave]

I saw this on another forum:
Just think of the new $700 billion plan

I'm against the $85,000,000,000.00 bailout of AIG.

Instead, I'm in favor of giving $85,000,000,000 to America in a We Deserve It Dividend.

To make the math simple, let's assume there are 200,000,000 bonafide U.S. Citizens 18+.

Our population is about 301,000,000 +/- counting every man, woman and child. So 200,000,000 might be a fair stab at adults 18 and up..

So divide 200 million adults 18+ into $85 billion that equals $425,000.00.

My plan is to give $425,000 to every person 18+ as a We Deserve It Dividend.

Of course, it would NOT be tax free.

So let's assume a tax rate of 30%.

Every individual 18+ has to pay $127,500.00 in taxes.

That sends $25,500,000,000 right back to Uncle Sam.

But it means that every adult 18+ has $297,500.00 in their pocket.

A husband and wife has $595,000.00.

What would you do with $297,500.00 to $595,000.00 in your family?

Pay off your mortgage - housing crisis solved.

Repay college loans - what a great boost to new grads

Put away money for college - it'll be there

Save in a bank - create money to loan to entrepreneurs.

Buy a new car - create jobs

Invest in the market - capital drives growth

Pay for your parent's medical insurance - health care improves

Enable Deadbeat Dads to come clean - or else


Remember this is for every adult U S Citizen 18+ including the folks who lost their jobs at Lehman Brothers and every other company that is cutting back. And of course, for those serving in our Armed Forces.

If we're going to re-distribute wealth let's really do it...instead of trickling out a puny $1000.00 ( "vote buy" ) economic incentive that is being proposed
by one of our candidates for President.


If we're going to do an $85 billion bailout, let's bail out every adult U S Citizen 18+!

As for AIG - liquidate it.

Sell off its parts .

Let American General go back to being American General.

Sell off the real estate.

Let the private sector bargain hunters cut it up and clean it up.

Here's my rationale. We deserve it and AIG doesn't.

Sure it's a crazy idea that can "never work."

But can you imagine the Coast-To-Coast Block Party!

How do you spell Economic Boom?

I trust my fellow adult Americans to know how to use the $85 Billion

We Deserve It Dividend more than I do the geniuses at AIG or in Washington DC .

And remember, The Birk plan only really costs $59.5 Billion because $25.5 Billion is returned instantly in taxes to Uncle Sam.

Ahhh...I feel so much better getting that off my chest.

Kindest personal regards,

Birk

T. J. Birkenmeier, A Creative Guy & Citizen of the Republic


Actually the math doesn't work out, but when has details ever stopped us from a good story

[tomgallagher]

Well Dave, with all due respect, I think that that is like standing around on the Titanic and talking about what we could have done or what we would like to do but the fact is IMO if we don't fix this huge hole in the boat right now we like the Titanic are going down and we will probably take a lot of smaller boats (countries) down with us. Don't get me wrong, I agree with you but the water is up to our ankles and we have to do something now.

[StumpyDave]

That was a distinctly not serious post from another forum.
In the UK I think a big part of the problem has been the media hyping the situation to make better news.  When stocks start selling for less it isn't the end of the world.  But people assume that stock prices=real money in their pocket and start panicking.

I'm against regulation for the sake of it, but I think the world got into this mess because a few people made really bad decisions about where they were going to invest.  They got stung bad and other banks lost confidence.  Once one of the big guys starts playing it cagey with their money, all the others jump on the band wagon.  I'm not sure that the worlds finances are any worse than at the end of the '80s.  Plenty got stung then but most markets bounced back.
I think that governments should invest at home on infrastrucure at times like these.  People get a chance for employment in a worhtwhile job and the nation is in a better state when the economy picks up.
I also think that we have problems in the UK with the number of migrant workers we admit.  We allow any EU national free entry to the country and they are entitled to work and claim benefits as per a native.  We get a lot of Eastern Europeans at the moment coming into Britain rather than anywhere else in the EU as we're seen as an easy touch.  I don't mind people coming here to work (if the locals won't get off their backsides and do a job) but the benefits side is bleeding the country dry.  That said, I think that the UK benefits system is a little too open for everyone.
And our import policy is too slack
And we aren't patriotic enough about British products
And it rains a lot

[Mikekoz13]

Well Tom.... I have a few thoughts..........

I don't like the idea that the average American has to pay more taxes to bail out the rich guys.

I think some of what these guys did was criminal and they should be prosecuted accordingly.

I think putting a large part of the housing market in America into the hands of the Federal Government is a mistake.

I think when President Bush was speaking last night and he said that when the market went back up in the future and the property holdings were then sold off by the Government "every single dollar of tax money will be repaid" is a joke. Even if they make the money back they'll give it to some special interest group.

I think the fact that irresponsible people have defaulted on their loans shouldn't leave those that do meet their financial obligations holding the "bag of sh*t".

I think this will turn into a political discussion verty shortly and will be pulled by the Mods.....

[schro]

The biggest problem was the ambitious goals in the late 90s to make housing affordable (i.e. free) for everyone. Fannie & Freddie were instructed to make loans available to everyone (125% LTV, 0% down, no proof of income required, teaser rates, etc etc). Unfortunately, this practice did not change in the 2000's. In fact, as there was a race to get into housing, companies began building new homes at an obscene pace. Prices kept going up (supply & demand).

Well, as people started defaulting, home values declined and people found it easier to walk away from a home they were upside down in. Did homes all of a sudden become worthless? No, it's because of the gains experienced in the last 3+ years were artifically overstated based on the above. The home value decline is purely a market correction.

Plenty of blame to go around....mortgage companies not scrutinizing potential lenders thoroughly enough and lenders not reading the contracts they're signing or taking on more debt then they could afford.

NOTE: The above is not a political statement, it's an economic statement.

[tomgallagher]

This is a bi-partisan problem and anybody that makes it political ought to be ashamed of themselves. I for one will not do that.

[tomgallagher]

Yep that's how we got here. How do we fix it.?

[StumpyDave]

I agree with Schro.
We had similar in the UK and the idea of people owning their own home (or at least having a mortgage on most of it) was a well established phenomenon.  We are unlike most of the rest of Europe in that respect where many people rent.
Do you sacrifice the fools that made loans in the wrong places and have subsequently gone bust?  I can't see a way to retrieve the situation without someone taking the fall.  If it isn't the people that started this mess, then it will end up being the tax payer (on both sides of the pond).
Unfortunately some of these big financial houses will take down a lot of smaller guys if they fall.

I'm not sure I'm qualified to comment further - I have trouble balancing my bank statement every month!

[tomgallagher]

Looks like it is a moot point. The bail out is going thru according to the news.

[Mikekoz13]

This is a bi-partisan problem and anybody that makes it political ought to be ashamed of themselves. I for one will not do that.

I agree completely!!!!

[skiking]

Actually the math doesn't work out, but when has details ever stopped us from a good story

Whoever did that divided 85 billion by 200 thousand instead of 200 million.  Even if they would give the entire 700 billion to the American public, each person would only get 3500.  so these people that say they should give the money to the people don't understand that it would make zero difference, most people would go buy some toys and we would be in the same situation that we are in now.

anyways, with the deal going through, there isn't a whole lot that we can do.

[schro]

Tough call on how to fix it. I'm against government getting into the housing finance business, however the ability to SENSIBLY borrow money is vital to the economy. If Fannie & Freddie shut their doors, it wouldn't be the worst thing in the world, IMHO. I know those two sentences may seem contradictory, but people that can't pay back a loan never should have been granted a loan in the first place. Again, fault on both sides.

[Hook'Em]

No

Tough call on how to fix it. I'm against government getting into the housing finance business, however the ability to SENSIBLY borrow money is vital to the economy. If Fannie & Freddie shut their doors, it wouldn't be the worst thing in the world, IMHO. I know those two sentences may seem contradictory, but people that can't pay back a loan never should have been granted a loan in the first place. Again, fault on both sides.

That is an unfair statement. Not everyone that has a hard time paying their mortgage now could not afford it when they took it out.

[schro]

No

Tough call on how to fix it. I'm against government getting into the housing finance business, however the ability to SENSIBLY borrow money is vital to the economy. If Fannie & Freddie shut their doors, it wouldn't be the worst thing in the world, IMHO. I know those two sentences may seem contradictory, but people that can't pay back a loan never should have been granted a loan in the first place. Again, fault on both sides.

That is an unfair statement. Not everyone that has a hard time paying their mortgage now could not afford it when they took it out.

Disagree, hardly an unfair statement. People default on loans in both good & bad economic times. Individual circumstances differ, I get that. However, the number of people that are walking away from homes despite the fact that they would re-fi 2, 3, 4 times over and park the new beemer in the garage or just use the latest re-fi to pay off their credit cards during these recent times is staggering.

Look, people that are in hard times I feel for, despite what some people may think about me. But people that have put themselves in this situation because of irresponsibility (both citizens and financial institutions) I have little to no sympathy for.

OK, blast away.