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No Taxpayer Bailout!
Dan:
No taxpayer money should be spent on bailing out financial institutions, period.
What will taxpayers get for their money? Absolutely nothing.
The money goes to pay other folks debts. Why in the world should we do that? They aren’t our debts.
The money goes to the lenders that made bad loans. Why should we bail out lenders who made bad loans? We didn’t make bad loans. Are we supposed to reward bad judgment?
The worry is that credit will dry up, damaging the economy. If that’s the problem, perhaps we need a temporary “loan insurance” program. For a fraction of the bailout cost, loans meeting clear credit standards could be guaranteed, thus encouraging the extension of credit. This serves a productive forward-looking purpose. It has the virtue of actually addressing the problem at hand. And it rewards the banks that are still solvent, the ones with good judgment.
Let the bankrupt financial institutions fail. Let the market sort out the value of their assets. Don’t prop them up with taxpayer money.
Lewinsky Stinks, Dr. Brennan Rocks:
Dan, I am with you 100%, but the stupid, self-centered, greedy public demanded a "rescue" of the economy. The appearance of Bush and co. doing nothing would have handed Obama the election on a silver platter.
briann:
--- Quote from: Dan on September 23, 2008, 12:37:05 AM ---
Let the bankrupt financial institutions fail. Let the market sort out the value of their assets. Don’t prop them up with taxpayer money.
--- End quote ---
I realize that this seems like a good idea on the surface... but its not.
If you let even 1 bank fail... you will cause a bank panic... in which people don't feel safe about keeping their deposits in the bank (Even with FDIC). SO they in turn pull their money out of their own banks... then these other banks suddenly have a shortage of reserves... and next thing you know.... they collapse.. which causes more people to pull their money out.. and you begin to see the cycle.
This is why you always see pictures of people lining up in front of closed banks during 1929-1931.. desparately trying to get their deposits back.
THis is what would always happen before WWII.. and this is why we would ALWAYS have depressions every 8 to 10 years.
I can't stand to see these negligent greedy banks being salvaged... but again.... if we don't, we fall into an economic free-fall. Banking is one of the few industries that has to be VERY TIGHTLY regulated for this very reason. Because all it takes is one stupid bank to start gambling with other people's money.. .and that causes ripples that effect even the most prudent and conservative of banks.
Every time this happens.. it involves a different kind of gambling by the banks. IN 29.. it was dangerous margin investing of stocks... in 88, it was Junk Bonds and Linked financing... and today.. its gambling by giving home loans to people who were very unreliable... and in the end... its always the depositors who get screwed.... as they are often unaware of what horrible and risky things are being done with their money.
zachor_ve_kavod:
At least Americans are vocal about it when they don't like a government policy. Here in the great leftist north, it's a different story. Tax dollars here went to pay for the construction of a highway, but it was an expensive toll highway. To travel about 50 miles costs about $30. As if that wasn't bad enough, the government then sold they highway (which we paid for) to a private corporation. So we're paying through the nose to use a highway which we paid through the nose to build.
As for the banks going bankrupt causing a complete collapse, I don't think this is so. You have to let corporations and insurance companies and banks go bankrupt if they overextend. Throwing money at the problem will only delay it. The money will be sucked up quickly. You don't put a corpse on life support.
briann:
--- Quote ---As for the banks going bankrupt causing a complete collapse, I don't think this is so. You have to let corporations and insurance companies and banks go bankrupt if they overextend. Throwing money at the problem will only delay it. The money will be sucked up quickly. You don't put a corpse on life support.
--- End quote ---
Its very easy to prove my point historically. Every time you have a bank collapse.. you have a depression. Its always been like this. This is why the fed (from 33 on) and nearly all central banks always intervene in these situations.
Again... I hate the greedy stupid nearsighted banks that did this... and I don't want to give them excuses. AND it is also possible... that no matter what the Fed and the treasury do... that the banks will collapse regardless... in which case we ARE wasting taxpayers money. SO if that happens... run for the hills... and start hording canned goods and amo.
Brian
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