Bailout?

[Kenster]

Ok so 1 year ago the Dow was at 6.5k, now its at 10.5k. This is just one economic indicator.

There is no way to know whether the bailouts were directly responsible for this but I am hoping people can give well thought out opinions on where we would be today if the bailouts never occurred.

What (if anything) would be different TODAY? disregard future consequences like moral hazard etc

[garyv]

Not to make this more political than it already is, but I think we probably would have crashed to the bottom faster, and would have bounced back by now. That's how free enterprise works. Capitalism has a way of balancing itself out. If a company can't survive on it's own merit, then it should be allowed to fail. Let the natural cycle take place. As it is now, we have very high unemployment, and it doesn't seem to be getting better any time in the near future.

[SocialBookmarkPro]

Honestly, I believe that the bailouts did help as it pumped money into the growth of the economy and the news outlets spun this to imply that it was the US coming out of a recession and back into a period of growth. Hence, they believed this, coupled with the running of the market, would fuel consumer confidence. In the end, it is all smoke and mirrors, thus I expect another deep correction.

[Kenster]

Tough call for me. I think its easy to hate bankers and underestimate the importance of financial institutions in any country and the ripple effect that can occur if a few large ones go under (which most were on the brink of doing).

So to me, it was a balance of the long term repercussions, mainly moral hazard, and the short term pain I think we would be feeling right now if the banks did start collapsing. The credit market is bad, but not terrible. Unemployment is bad but not nearly as bad as predicted (depression era numbers). But I am a huge believer in free market.

So for me, I think if it didn't occur, we would be in a much uglier place right now. Unemployment double and credit still frozen. So, good decision for short term, bad for long. And I like to be a big picture, long term type guy, so bad!

[Michael Motley]

I think the bailouts helped, but I also think they should have been way more controlled. Blindly handing out blank checks to people who handle money is no way to do business.

[Kay King]

The DOW may look better - but trading numbers remain low. We don't know if people will come back into stocks to trade - or to sell off.

would be feeling right now if the banks did start collapsing

That is happening - smaller banks are failing at a rate even higher than last year but no one seems to be noticing. As for foreclosures...

From American Banking News (at the end of 2009):

With rising unemployment and mortgage resets about to hit in big way, the pain for the American people will continue on, no matter what the government line on being in a recovery maintains. This doesn’t even take into account the coming fallout of commercial loans which are projected to be huge and to explode in the second half of 2010.
For the banking industry, it remains to be seen who is most vulnerable and how it will effect the bottom line. But any way you look at it, the hoopla of record profits and all of that isn’t going to last long, and the reality will hit hard as the story of the real condition of the banking industry emerges in 2010, and it isn’t going to be pretty.

The media in January reported a "decline in foreclosures" compared to Dec 2009 - but didn't mention the January rate was still 15% higher than a year ago.

In my opinion, "hunker down and protect what you have" is still the best advice out there. My worry is that by next fall we will be facing the same or a similar "crisis" - and we won't have the resources to stop the crash. I hope I'm wrong about that!

kay

[Michael Motley]

Originally Posted by Kay King

The DOW may look better - but trading numbers remain low. We don't know if people will come back into stocks to trade - or to sell off.



That is happening - smaller banks are failing at a rate even higher than last year but no one seems to be noticing. As for foreclosures...

From American Banking News (at the end of 2009):



The media in January reported a "decline in foreclosures" compared to Dec 2009 - but didn't mention the January rate was still 15% higher than a year ago.

In my opinion, "hunker down and protect what you have" is still the best advice out there. My worry is that by next fall we will be facing the same or a similar "crisis" - and we won't have the resources to stop the crash. I hope I'm wrong about that!

kay

I think when the media reports things like 'foreclosures are down'...thats true and not true at the same time.


as an example..if there are 1000 people who own houses, over a 6 month period foreclosures start, with the apex being about 3 months in..in the 4th month, not as many are reported, not because there arent as many foreclosures any more, but because everyone that can be foreclosed on, has been forclosed on. They dont have their houses back.

[Tiffany Holbrook]

I justed wanted to say that I am in the real estate field in michigan and foreclosures are still high. The loan modification called the hamp is not doing as much as the government hoped for. If anyone needs assistance about a short sale or loan modification. I will help you as much as possible. I am an x-loss mitigation specialist. I used to work for a bank.

[Kay King]

The loan modification program is a bad joke. The claim was it would help 8-9 million homeowners stay in their homes. So far, after a year, only 100k people have had any help through that program.

This week another program was announced that will throw over a billion to those who go for "short sales"....geez, what's next? Probably buying the glut of homes on the market and running a federal rental agency?

I don't envy you if you are in real estate now. I was a broker years ago and remember losing $14k in commission one month in the 80's when the economy dipped a lot less than it has now. It's a difficult line of work in a bad economy.

kay

[seasoned]

Originally Posted by Kay King

This week another program was announced that will throw over a billion to those who go for "short sales"....geez, what's next? Probably buying the glut of homes on the market and running a federal rental agency?

MAN, that is RIDICULOUS!

Frankly, the stimulus hasn't saved ONE job! Not ONE! Just yesterday, they revealed that, as a beautification project, $10,000 was paid for some stupid little fish sculptures you can hardly see, IN THE MIDDLE OF THE ROAD. The cash for clunkers should have happened a few months later, as most cars sold were american, most bought were foreign. Think of people that may have died in their new toyotas! The money given to AIG and GM was a JOKE! AIG squandered it on parties, etc.... GM basically stole the money from stock holders and bond holders. The government simply was an accomplice.

And look at home owners! They pay all these people for buying a new home or moving. *I* keep chugging along, and didn't get a PENNY! INSTEAD, the bank that ripped me off of tens of thousands through a lie was relieved of all liability, and their buyer ended up giving me a loan with HIGH closing fees. THEY lied AGAIN, just to complete the cycle. That lie will likely take another 6 months to roll off the books, but who knows how long it will affect my fico?

I took that loan ONLY because that first lie made it to where my whole future was being paid to credit cards. NOW, I have a number of accounts FLUSH with cash! Still, I have to pay maybe another $10,000 because of a stupid lie!? BTW I don't DARE pay my credit cards off, though I have a number of accounts with the cash to easily do so. WHY? Because they might be closed! And I have to pay a credit reporting firm to check my credit TWICE a month to catch lies before they can REALLY damage my credit. HECK, It is costing me MORE money!

Banks are STILL failing! People are STILL losing their jobs.

Oh well, most of the recalls are on FOREIGN cars. Many have told me they will NEVER buy a toyota again! They are lucky Wozniak is so nice and fair. He could have sued them BIG TIME! They would have NO defense! AND, at this point, Wozniak isn't the only one saying he is right!

Steve

[Kenster]

Things arent butterflies and rainbows, agreed. But I dont think some people realize how close we were to ALL the bulge bracket and large commercial banks failing. The ripple effect would have been massive, globally not just domestically.

I dunno, I hate the concept of bailouts but I really fear what could have been if there was no intervention and there began runs on all the banks and investors fleeing etc. Would have thus been 0 loaning, more foreclosures, and the vicious cycle continued. I feel like it could be 30x uglier than what we are seeing. Who knows

[TimPhelan]

Funny, Gov Arnold says it's saved or created 150,000 jobs just in California, but you strangely claim it hasn't saved even one job. Somebody is off a little bit.

Originally Posted by seasoned

Frankly, the stimulus hasn't saved ONE job! Not ONE!

Steve

[MikeAmbrosio]

Originally Posted by TimPhelan

Funny, Gov Arnold says it's saved or created 150,000 jobs just in California, but you strangely claim it hasn't saved even one job. Somebody is off a little bit.

Since when do you take anything a republican says as true or fact?

[seasoned]

Originally Posted by MikeAmbrosio

Since when do you take anything a republican says as true or fact?

Since he isn't REALLY a republican! He is a KENNEDY, believe it or not! Don't believe me?

Maria Shriver - Wikipedia, the free encyclopedia

His mother in law is Eunice Kennedy Shriver!

And look at how he has changed SINCE!

BTW you can bet arnold is claiming some government jobs too. I WOULD say zero sum gain, but it is more of a net loss. and if they have SO much cash, HOW come they gave out IOUs, and are essentially BANKRUPT!

Steve

[garyv]

Giving bailouts to many of these companies, would be comparable to giving buckets to the people on the titanic. They may be able to keep it from going under for a little while longer, but eventually it's still going down.

The Dow numbers are not a good indicator of how well our economy is doing. People are still losing jobs. And even though we are not losing as many jobs as we were before, we're still LOSING them. Which means that we are still on a down cycle.

And in California, the un-employment rate has gone from around 9% to 12.5% since the bail outs. So those jobs that Arnold said were "saved" - were by far offset by the amount of jobs lost. The numbers don't lie.

[TimPhelan]

Seems you and Steve are getting the bailout and the stimulus mixed up. Arnold was talking about jobs saved/created as a direct result of the stimulus bill. I'm not sure why the stimulus was brought up though since the Kenster was asking about the bailout.

Originally Posted by garyv

And in California, the un-employment rate has gone from around 9% to 12.5% since the bail outs. So those jobs that Arnold said were "saved" - were by far offset by the amount of jobs lost. The numbers don't lie.

[Kenster]

Originally Posted by garyv

Giving bailouts to many of these companies, would be comparable to giving buckets to the people on the titanic. They may be able to keep it from going under for a little while longer, but eventually it's still going down.

The Dow numbers are not a good indicator of how well our economy is doing. People are still losing jobs. And even though we are not losing as many jobs as we were before, we're still LOSING them. Which means that we are still on a down cycle.

And in California, the un-employment rate has gone from around 9% to 12.5% since the bail outs. So those jobs that Arnold said were "saved" - were by far offset by the amount of jobs lost. The numbers don't lie.

Hey GaryV, always love hearing your comments...


To your first point....what if giving people buckets kept the ship up long enough so help could be found? or so the ship got closer to shore and some people could swim to shore. Ship still goes down but the result is better than not giving buckets. I see what you're saying but food for thought


To your second point...people are still losing jobs and we may be on a downcycle, but that isn't really what I was asking. If we didn't have the bailouts, maybe we would be at 25% unemployment and still declining. Its all relative ya know

We need to think in relative terms. Of course the bailouts didn't solve everything and I think from the start, the people responsible said the bailouts wont turn the economy around, it was meant to prevent the economy from crashing and burning. Maybe a little over dramatic there. I am not saying I agree with the bailouts, i'm just saying perhaps things could have been much much worse. Remember depression era unemployment was 30%+

And as for California...all I can say is the Terminator...Governor...what?

[garyv]

Originally Posted by TimPhelan

Seems you and Steve are getting the bailout and the stimulus mixed up. Arnold was talking about jobs saved/created as a direct result of the stimulus bill. I'm not sure why the stimulus was brought up though since the Kenster was asking about the bailout.

regardless - the numbers are still the same. You can't claim job savings, when more jobs were lost than saved.

If my wife goes to the grocery store and spends $100 more this week than last week on the same amount of groceries. She can't say that she saved $5 on the bill this week, just because she pulls out a $5 coupon. The result is still an overall loss.

[garyv]

Originally Posted by Kenster

Hey GaryV, always love hearing your comments...


To your first point....what if giving people buckets kept the ship up long enough so help could be found? or so the ship got closer to shore and some people could swim to shore. Ship still goes down but the result is better than not giving buckets. I see what you're saying but food for thought


To your second point...people are still losing jobs and we may be on a downcycle, but that isn't really what I was asking. If we didn't have the bailouts, maybe we would be at 25% unemployment and still declining. Its all relative ya know

We need to think in relative terms. Of course the bailouts didn't solve everything and I think from the start, the people responsible said the bailouts wont turn the economy around, it was meant to prevent the economy from crashing and burning. Maybe a little over dramatic there. I am not saying I agree with the bailouts, i'm just saying perhaps things could have been much much worse. Remember depression era unemployment was 30%+

And as for California...all I can say is the Terminator...Governor...what?

I see what you're saying, and I guess it all comes down to how you believe capitalism works. In my scenario, these ships may be going down, but there are plenty of other ships and boats all around to take on these people. So it makes no sense to hand out buckets. Quit wasting energy and get onto the other boats already. That's why this recession is taking so long. People are still trying to use their buckets.

Would things have been worse? Maybe - but not for as long as it is now. It would have been like ripping off a bandaid. Maybe it'll hurt worse, but it'll be over quicker. Would we have failed completely? Not a chance, because there were plenty of companies and banks still out there that were not struggling that would have gladly picked up the slack.

[TimPhelan]

Using your analogy, yes you can claim job savings just as your wife can claim that the coupon saved money. That is what is being claimed: the stimulus saved jobs. Your wife could claim that the coupon saved money and she would be right also. However, according to you if your wife said "my coupon saved $5 on this product" you would say "No it didn't because you spent all this other money on other items". That doesn't make sense.

Originally Posted by garyv

regardless - the numbers are still the same. You can't claim job savings, when more jobs were lost than saved.

If my wife goes to the grocery store and spends $100 more this week than last week on the same amount of groceries. She can't say that she saved $5 on the bill this week, just because she pulls out a $5 coupon. The result is still an overall loss.

[seasoned]

Tim,

Can't you add? $100-$5=$95 net LOSS!!!!!!! So she did NOT save $5, it cost $95 MORE!

I guess if I somehow had you pay 105% of all your assets to something, and gave you a 5% coupon, you would STILL figure you really saved. But you know, everyone else would STILL consider you BROKE!

If you want to claim she saved money, GREAT! Just give her the other $100!

Steve

[TimPhelan]

Yes, I can add. The coupon still saved $5 on one item. If that is what she was claiming then she would be right!!!!!!!!!!!!!!!!!!! That is what Arnold was claiming: the stimulus saved/created 150,000 jobs. You guys are adding to his statement and it doesn't make sense.

Originally Posted by seasoned

Tim,

Can't you add? $100-$5=$95 net LOSS!!!!!!! So she did NOT save $5, it cost $95 MORE!

I guess if I somehow had you pay 105% of all your assets to something, and gave you a 5% coupon, you would STILL figure you really saved. But you know, everyone else would STILL consider you BROKE!

If you want to claim she saved money, GREAT! Just give her the other $100!

Steve

[garyv]

Would you still say she saved money, if she had to use $10 from the credit-card to buy that $5 coupon?

With the amount of money spent on the stimulus, we could have given everyone that is without a job, a full time paycheck. The numbers just don't make sense at all.

[TimPhelan]

Well, now your adding something else.

Your idea to just let the economy fail is flawed and Hooveresque. We wouldn't have bounced back by now if the bailout and stimulus didn't happen. I think Kenster is right: we would be at depression era levels of unemployment.

Independent sources say the stimulus added up to 1.8 million jobs and helped stimulate the economy:

Just look at the outside evaluations of the stimulus. Perhaps the best-known economic research firms are IHS Global Insight, Macroeconomic Advisers and Moody’s Economy.com. They all estimate that the bill has added 1.6 million to 1.8 million jobs so far and that its ultimate impact will be roughly 2.5 million jobs. The Congressional Budget Office, an independent agency, considers these estimates to be conservative.

Economic Scene - Success of Stimulus Bill Is Noteworthy as Another Is Weighed - NYTimes.com

Originally Posted by garyv

Would you still say she saved money, if she had to use $10 from the credit-card to buy that $5 coupon?

With the amount of money spent on the stimulus, we could have given everyone that is without a job, a full time paycheck. The numbers just don't make sense at all.

[Ken Strong]

Originally Posted by garyv

The Dow numbers are not a good indicator of how well our economy is doing.

That's for sure. It's an indicator of how a small number of extremely wealthy investors are feeling psychologically on a certain day. It's geared to them, not to the average worker. Whenever a large corporation lays off a bunch of people, their stock usually goes up. That's a good indicator of what the stock market means to most people.

[garyv]

Nobody said let the economy fail. We said let the companies and banks that are going under (many which have now failed anyway) to go ahead and fail. The economy would have never failed. The unemployment rate was much higher when Jimmy Carter was in office and the economy didn't fail.

The problem here is that there are some that don't really have a proper big picture view of the economy. They're happy as heck w/ their $5 coupon, even though they've just spent $10 for the coupon. They're all saying "woo hoo, we're saving money here." When the rest of us that see the bigger picture are scratching our heads.

Where do you think that stimulus money is coming from? Taxes. Which then forces tax payments to go higher. If you're paying higher taxes, you're hiring less people.

So you're stimulating nothing. You're just pulling successful companies down, so that you can prop up the failures.

Originally Posted by TimPhelan

Well, now your adding something else.

Your idea to just let the economy fail is flawed and Hooveresque. We wouldn't have bounced back by now if the bailout and stimulus didn't happen. I think Kenster is right: we would be at depression era levels of unemployment.

Independent sources say the stimulus added up to 1.8 million jobs and helped stimulate the economy:



Economic Scene - Success of Stimulus Bill Is Noteworthy as Another Is Weighed - NYTimes.com

[TimPhelan]

I believe unemployment never went over 8% under Carter.

Letting the banks fail sounds good. Sounded good to Hoover and Mellon in 1930 also. Study what happened in the great depression and you might think twice about what you see as the big picture.

Originally Posted by garyv

Nobody said let the economy fail. We said let the companies and banks that are going under (many which have now failed anyway) to go ahead and fail. The economy would have never failed. The unemployment rate was much higher when Jimmy Carter was in office and the economy didn't fail.

The problem here is that there are some that don't really have a proper big picture view of the economy. They're happy as heck w/ their $5 coupon, even though they've just spent $10 for the coupon. They're all saying "woo hoo, we're saving money here." When the rest of us that see the bigger picture are scratching our heads.

Where do you think that stimulus money is coming from? Taxes. Which then forces tax payments to go higher. If you're paying higher taxes, you're hiring less people.

So you're stimulating nothing. You're just pulling successful companies down, so that you can prop up the failures.

[garyv]

Originally Posted by TimPhelan

I believe unemployment never went over 8% under Carter.

Letting the banks fail sounds good. Sounded good to Hoover and Mellon in 1930 also. Study what happened in the great depression and you might think twice about what you see as the big picture.

Actually you're right unemployment was bad, but didn't go over 8% w/ Carter. It was inflation that was through the roof.

As far as the banks go. They didn't have FDIC back then. The whole purpose of the insurance is to prevent what happened back then. And by the way, many of these bailed out banks and companies are failing anyway, even w/ the government help. The FDIC is now allocating the customer base of these failed banks to other more healthy banks. If we would have allowed this to happen in the first place we could have saved a lot of tax money. Which in itself would have been a "real" stimulus.

[seasoned]

Originally Posted by TimPhelan

I believe unemployment never went over 8% under Carter.

Letting the banks fail sounds good. Sounded good to Hoover and Mellon in 1930 also. Study what happened in the great depression and you might think twice about what you see as the big picture.

I have been aying this for over a DECADE!!!!!! I have complained about lack of enforcement for about TWO decades! But here I go again! In 1933 they passed the Glass-Steagall act to PREVENT another depression! TOO BAD it was NOT ENFORCED, and REPEALED! Glass?Steagall Act - Wikipedia, the free encyclopedia

So your post has NO merit in your argument.

Steve

[TimPhelan]

I agree the Glass-Steagall Act shouldn't have been repealed, but that doesn't mean my argument doesn't have any merit. It's something completely different actually. I was talking about the stimulus which you brought up although the subject was the bailout.

Originally Posted by seasoned

I have been aying this for over a DECADE!!!!!! I have complained about lack of enforcement for about TWO decades! But here I go again! In 1933 they passed the Glass-Steagall act to PREVENT another depression! TOO BAD it was NOT ENFORCED, and REPEALED! Glass?Steagall Act - Wikipedia, the free encyclopedia

So your post has NO merit in your argument.

Steve

[seasoned]

Well, you talked about the banks, etc... Before 1933, the banks were in EVERYTHING! Banking, loaning(and carrying), stocks, margins, insurance, etc.... ALSO, margins were 7:1! Glass steagull said they could only be in banking, and only carry a percentage of the loans, and margins, which they couldn't do, could be 2:1. In 1984, a compliant bank on a million dollars in stock would have NO direct loss! Prior to 1933, a compliant bank on a million dollars could lose up to 7 million. That is just a TASTE of the difference.

Anyway, they started doing things in the 80s, against GS, and who knows how much of the loss was outside of GS.

Steve

[Kenster]

Yes, the DOW isnt everything. The movement of the DOW reflects more of the future outlook than day to day. Of course day to day affects the future which is why you get slight movements. But I think the dow increasing 60% is still significant.


Gary - I would have to disagree. Recessions can last many years, 5-8 years. We havent been in a recession long and its not that bad. I fear the worst is yet to come, but right now its not as bad as it could have been (in my opinion). And I agree with you that it should be survival of the fittest, but I dont think for a second that if there was a ripple effect run on banks and huge financial and semi financial related companies going under like I fear was on the brink of happening and even more frozen credit markets, that other companies would come up and fill their place within 3 years. If there was a massive collapse it would take many years to rebound.

Plus, our financial system has already been declining as a global power so letting this shakeout occurr and us going into depression or deep recession may leave our financial power dwindles on a global scale.


As I said it was a no win in my book. Let the banks fail as they theorectically should based on free market principles and we would be in depression era numbers and it would effect our global strength. Bailout the banks and the recession may not be as deep or long, but there is huge moral hazard risk.

[TimPhelan]

The FDIC's deposit insurance fund was at about $10 billion a year ago. The bailout was for $700 billion. We couldn't have allowed the FDIC to cover this since the FDIC was one of the institutions that almost needed bailing out! And that's without considering the $700,000,000,000 allocated to be spent on bailing out banks.

The FDIC insures deposits at 8,195 institutions that have about $13.5 trillion in assets and they only have $10 billion in their insurance fund. Still think the FDIC was the answer?

Originally Posted by garyv

The FDIC is now allocating the customer base of these failed banks to other more healthy banks. If we would have allowed this to happen in the first place we could have saved a lot of tax money. Which in itself would have been a "real" stimulus.

[seasoned]

Originally Posted by TimPhelan

The FDIC's deposit insurance fund was at about $10 billion a year ago. The bailout was for $700 billion. We couldn't have allowed the FDIC to cover this since the FDIC was one of the institutions that almost needed bailing out! And that's without considering the $700,000,000,000 allocated to be spent on bailing out banks.

The FDIC insures deposits at 8,195 institutions that have about $13.5 trillion in assets and they only have $10 billion in their insurance fund. Still think the FDIC was the answer?

The FDIC, like so many other government programs, is a PONZI SCHEME! They do NOT insure ALL the money! They earlier only insured $100,000. They never REALLY made it clear what that meant. Is 5*$100,000 $500,000? Some say it IS! So WHAT is the difference? Well, if you lost 5 accounts that were each $100,000, the FDIC would pay you $100,000, and you would be out the remaining $400,000! If you had $100,000 at one bank that you lost, you might not get it back if you have $100,000+ elsewhere. ALSO, they are NOT supposed to let a bank fail 100%. The deal is to take BAD assets, repackage them, and sell them in other ways. They end up with a FAR stronger bank that is then sold to another bank. In that way, they can cover $13.5trillion with a SMALL portion of that.

Of course, they RAISED it within the pastt 2 years, and I think they renewed it once. I don't know what it is now.

Steve

[TimPhelan]

The amount covered now is $250,000 per account.

I don't think the FDIC main job is to prevent banks from failing although it started a program in 2009 to help banks get rid of toxic assets. One of the FDICs main jobs, besides insuring deposits, is to take over insolvent banks after failing, so we're talking about two different things really. The FDIC wasn't in the position and didn't have the assets to save the banks from failing.

Originally Posted by seasoned

The FDIC, like so many other government programs, is a PONZI SCHEME! They do NOT insure ALL the money! They earlier only insured $100,000. They never REALLY made it clear what that meant. Is 5*$100,000 $500,000? Some say it IS! So WHAT is the difference? Well, if you lost 5 accounts that were each $100,000, the FDIC would pay you $100,000, and you would be out the remaining $400,000! If you had $100,000 at one bank that you lost, you might not get it back if you have $100,000+ elsewhere. ALSO, they are NOT supposed to let a bank fail 100%. The deal is to take BAD assets, repackage them, and sell them in other ways. They end up with a FAR stronger bank that is then sold to another bank. In that way, they can cover $13.5trillion with a SMALL portion of that.

Steve

[HeySal]

I think allowing that bailout to take place was the biggest mistake in the history of what was the USA. We now have politicians controlling private industry. Sure we would have collapsed, but if free enterprise had been allowed to reign in tandem with gold backed money not one bit of this ever would have occurred in the first place. We could have gotten things back together by now, now we just have absolutely no control over any portion of business that the gov decides to own. Others before us have learned this lesson.

All stimulus was is giving back a portion of stolen money plain and simple and anyone who can applaud that is not really thinking deeply enough - someone came in your house and stole 10,000 and you can't honestly think they are all fine and sharp because they gave a grand back.

Unemployment figures only represent people on unemployment.....many unemployed are no longer able to draw unemployment, which drops them off the figures....is that why it SEEMS that we have less unemployment while people are still losing jobs? Here in Idaho there are fewer jobs open statewide in a month than there used to be in one city in just a few days. Boise is closing up major businesses right now and people are fleeing from the state. The only real hope here is that enough 2 job families leave because they now only have one job in the house that they will open up the one abandoned job for everyone who is staying. My sister lives in Stockton, CA and says that unemployed are actually ranking at close to 33% when you figure the unemployed that don't count in the official numbers. I talked to a friend in Oregon last week and she was crying because she was the only one with a job left in a family that keeps growing because her adult kids and spouses have all been moving home after losing jobs and hers is now gone too.

We have a nation in which 1 out of every 8 people are now getting their food from food stamps and food banks -- and dumpsters.
And we can't fix our economy because it's been heisted. We are unable to go to school, pay mortgages, get help to the elderly or the young homeless but the bail out money - our money that we plainly said "NO" to them taking - is still being shelled to the corporate heads.
And that's the bottom line.

[garyv]

I agree w/ you HeySal. And what's coming is going to be much worse than what would have happened if they would have just let the market make the correction. Once the market catches on to how devalued our dollar is (because we've been printing it a record speed) our inflation is going to just skyrocket.

And you can just feel it coming. The politicians are already setting up the banks to take the blame again. When they know full well that their spending spree is setting us up for possibly uncontrollable inflation. It's no wonder banks are not wanting to lend out their money. They are bracing themselves for the obvious outcome.

[Kay King]

Sheila Bair, FDIC, and the financial crisis : The New Yorker

There were a few really smart people who tried to warn of what was coming - they were ignored. They are warning us again - and being ignored again.

I was just looking at a picture of the design for the new US embassy in London. It's an exceedingly ugly glass cube with a moat around it - and sadly I think that monstrosity is a snapshot of what what we're becoming. It will be a $1 billion (that's the estimate which means it will probably cost $3 billion) embarrassment for future generations. Wonder what people in the UK think of it.

Banks aren't loaning because they can borrow at almost 0% and can make a quick investment turnaround at 3% or so - which accounts for the "profits" being reported now. At least that's my guess - I'm no economist. Wonder what happens when interest rates start to rise....

kay

[Michael Motley]

Originally Posted by garyv

Would you still say she saved money, if she had to use $10 from the credit-card to buy that $5 coupon?

With the amount of money spent on the stimulus, we could have given everyone that is without a job, a full time paycheck. The numbers just don't make sense at all.

you can't give a full time paycheck when there isnt a job to pay them for.

without the bailout and the following stimulus companies wouldn't have been able to retain jobs. then as a bonus, there would need to be unemployment paid..at this point it is up to 99 weeks, and in states like florida there are people takin every single bit of that.

Then there's loss of insurance. Ever used Cobra? yeah good luck with that one.

So lets say we didnt have the bailout and the stimulus, and someone like yourself with children loses his job. Now not only is the business on its way down and out knocking the city/state out of tax revenue, but you are out of a realistic paycheck. For instance in florida..i dont give a crap what you made at your job, you will get $250 a week on unemployment.

So you're now making an unliveable wage. Now one of your kids gets sick. Who's paying for that? You with no insurance and a whopping $250 a week paycheck? What does $250 get you at a pediatrician...an asprin? So who's paying for that? Oh yeah..that would be the hospital...and ultimately the other taxpaying citizens that were able to retain their jobs.

Since you're making an unliveable wage, you are now on the fast track to foreclosure...credit cards can't be paid, car payments can't be made..and some people will even turn to crime when stuff starts getting really rough.

Now multiply that by every person that would have lost a job and has kids.

So which do you really think was cheaper in the long run?

[garyv]

Originally Posted by Michael Motley

Now multiply that by every person that would have lost a job and has kids.

So which do you really think was cheaper in the long run?

You must be assuming that the money for this bailout came out of thin air. The amount of jobs lost, because of the taxes needed to pay for this stimulus, will far out weigh the jobs gained by it. Not to mention the inflation that's sure to come because our spending spree (stimulus) is greatly devaluing our dollar.

As it is, most of the companies that were failing - have now failed anyway. We're just prolonging the pain. Let the healthy companies come in and fill in the gaps. That's what's happening now anyway. We have a local bank that was no where near collapse, and they quickly and happily took on accounts from several big name banks that went under. Free markets find a way to sustain and correct themselves. Artificial corrections from the Government only serves to block up the natural flow.

[Kay King]

Michael -

In my area there are some road projects (repaving) being paid for with stimulus money. Those doing the work are county employees with full time jobs.

Those crews are counted as "jobs saved" - but they were never at risk of losing their jobs without the stimulus money. The money saved by the county was not used to add more jobs. The way jobs saved is counted changed in January and now anyone who is paid ANY stimulus money or works for a company paid with any stimulus money is considered a "job saved or created".

The hole is getting deeper and wider - and people in charge are playing with the numbers. The only advice that makes sense to me is "hunker down".

kay

[Michael Motley]

Originally Posted by garyv

You must be assuming that the money for this bailout came out of thin air. .

and where do you think the money for unemployment and paying for the uninsured would come from?

[garyv]

Originally Posted by Michael Motley

and where do you think the money for unemployment and paying for the uninsured would come from?

Again - you're assuming that the stimulus actually worked. We're now paying for the stimulus AND the unemployed.

Plus that goes to my statement above. With the amount of money we've spent on stimulus we could have given them all a full time paycheck and more - which by the way is more than you'd receive if you became unemployed.

Plus let's do some simple math. The Whitehouse claimed the stimulus save a million jobs. So considering the fact that we paid 750 billion dollars for that stimulus. We've just paid 750,000 for each one of those jobs. If that's not a waste of monumental proportions then I don't know what is.

[TimPhelan]

Again, you are confusing the stimulus with the bailout. It's weird you keep doing that.

By the way, the "spending spree" you see seems to only come from the stimulus apparently. What about the "spending spree" by the prior admin? I think that spending spree ( unnecessary $3 trillion war, unpaid for $600 billion prescription drug bill, $1.8 trillion tax cuts which added to the deficit ) far, far outweighs the stimulus and added much more to the deficit and keeps adding to it.

Also, your "simple math" on the stimulus is wrong in a couple of ways. One, which maybe you aren't aware of, is that over a third of the stimulus was for tax cuts ( that weren't for the rich). Plus when you create jobs for infrastructure items like roads, bridges, high speed trains etc... there are other costs besides the workers wage. You know, things like steel, concrete, asphalt, etc... So you need to do your math over it seems.

Originally Posted by garyv

You must be assuming that the money for this bailout came out of thin air. The amount of jobs lost, because of the taxes needed to pay for this stimulus, will far out weigh the jobs gained by it. Not to mention the inflation that's sure to come because our spending spree (stimulus) is greatly devaluing our dollar.

As it is, most of the companies that were failing - have now failed anyway. We're just prolonging the pain. Let the healthy companies come in and fill in the gaps. That's what's happening now anyway. We have a local bank that was no where near collapse, and they quickly and happily took on accounts from several big name banks that went under. Free markets find a way to sustain and correct themselves. Artificial corrections from the Government only serves to block up the natural flow.

[garyv]

Originally Posted by TimPhelan

Again, you are confusing the stimulus with the bailout. It's weird you keep doing that.

By the way, the "spending spree" you see seems to only come from the stimulus apparently. What about the "spending spree" by the prior admin? I think that spending spree ( unnecessary $3 trillion war, unpaid for $600 billion prescription drug bill, $1.8 trillion tax cuts which added to the deficit ) far, far outweighs the stimulus and added much more to the deficit and keeps adding to it.

Also, your "simple math" on the stimulus is wrong in a couple of ways. One, which maybe you aren't aware of, is that over a third of the stimulus was for tax cuts ( that weren't for the rich). Plus when you create jobs for infrastructure items like roads, bridges, high speed trains etc... there are other costs besides the workers wage. You know, things like steel, concrete, asphalt, etc... So you need to do your math over it seems.

You're the one that's obviously confused here. I'm talking about the stimulus.

And yes I realize that there are costs for infrastructure and other things. But this bill was called "stimulus" and some Politicians even called it the "jobs stimulus" bill. So it's only obvious to break down the cost of that "job stimulus" when deciding whether or not it actually "stimulated" - and at what cost was that minor "stimulation".



And you're out of your mind if you thing the last admin's spending is anywhere near to what this one's is:

[TimPhelan]

Originally Posted by garyv

You're the one that's obviously confused here. I'm talking about the stimulus.

Here's what you wrote: "You must be assuming that the money for this bailout came out of thin air. The amount of jobs lost, because of the taxes needed to pay for this stimulus,..."

And yes I realize that there are costs for infrastructure and other things. But this bill was called "stimulus" and some Politicians even called it the "jobs stimulus" bill. So it's only obvious to break down the cost of that "job stimulus" when deciding whether or not it actually "stimulated" - and at what cost was that minor "stimulation".

You are aware that the Bush tax cuts were also called a stimulus right? Did you break down that stimulus in amount paid per job also?

And you're out of your mind if you thing the last admin's spending is anywhere near to what this one's is. They may be pushing the numbers to later years, but it's still them spending it:

If you notice that graph shows Bush didn't have a deficit when he took office and that a good portion of the 2009 deficit was from the bailout which was started under Bush. Plus, the current stimulus wouldn't have been needed if the economy wasn't in a free fall at the beginning of 2009. Also, a big portion of the deficit is a result of the recession which started in 2007 under the previous admin.

Here is another graph which breaks down the deficit:



Here is another graph which clearly shows that Bush spent more and is more responsible for the deficit:

[Kenster]

Yes, I believe we are in for some hyperinflation.

But unemployment IS NOT how many people are collecting unemployment. Unemeployment is defined as something like..."People who are capable, willing, and actively seeking jobs"

It takes out people who dont want jobs (trust fund/retired etc) but doesnt mean people who are collecting.

[KimW]

Unemployment also can't take into consideration those that have given up on finding a job.

[seasoned]

YEP, forget the word BUDGET before surplus. FORGET the dot BOMB. FORGET the lowering of the fed funds rate, and all the bankruptcys in 1999. dot-com bubble - Wikipedia, the free encyclopedia We never truly recovered from that. JUSt as things seemed to be improving the WTC thing happened. And we all know what happened in 2007-2008. I could say more but, well..... c'est la vie

Steve

[Jay_Mueller]

I don't think we should have given the banks the bailouts. I think our economy would have straightened out on its own without the government's interference.