Economic Crisis; Solutions

[Racoon]

The reason to bailout GM and Ford and Chrysler should be to keep making cars in America, thus providing jobs and wages to people involved..

The US already gave out 700 billion to the people who got us into this mess in the first place..
So whats 16 billion more when it keeps regular Americans employed??


Its all fuxxed up.

But as soon as you hand out money to the Auto industry, then the Airlines are next.. then major chains are next..

Looks like Government control over everything doesn't seem too far fetched anymore.

[Moadib]

The solution is an old one but a good one. Companies with bad business policies or unworkable structure should go bankrupt.
AIG is the easiest. If its "too big to fail...its too big. In my opinion, if AIG totally failed and didnt even try to restructure or downsize, 500 smaller companies or new companies would expand to snatch up market share within a year. Bankruptcy and a good downsizing would be my more appealling. As a sidebar stockholders should pay more attention to the pay structure of the companies they buy.
The lesson - Companies should not spend, invest, or pay CEOs above their means
The auto industry is a case of you made the bed now you lie in it. For far too long auto unions have been over payed and under worked.No comany can pay its labor 3 times as much and have 3 times the downtime and continue to pay its employees 3/4 of their salary after they retire and expect to compete. Every cent a union workers make over nonunion workers, is a cent less competetive the product the union produces becomes. The auto industry is best served claim bankruptcy and restructuring their labor agreements and business model
The lesson - Union should not bite the hand that feeds them.
The housing issues is the only one of these 3 that govt should give loans or bailout money.The govt all but forced banks to make high risk loans to low income people with questionable credit. Throw on top of that the feds slamming the interest rate to the bottom of the basement, further inflating housing prices and you get lots and lots of high risk lower reward loans on overpriced houses. If a govt promted banks to make risky loans. govt (and politicians) should be held accountable. If a bank bought a bad loan from another bank, on the otherhand, that bank should share responsiblity for the loan. Prehaps a govt program to aid homebuyers in house values considering that the seller, bank, and even the buyers own agent have vested interest in that sale priceof a house being as high as possible. I havent thought this one out all the way but possibly govt could absorb some of the forclosures for public housing and cancel some building projects(not that im for public housing but if they are gunna do it at least dont spend so much of my money on it).If banks slow lending for a year or so is that really all that bad? ive always heard Americans dont save enough and have too much credit...
The lesson - Beware politicians bearing gifts. or when government gets involved in a industry, that indusrty becomes an economic drain and usually faulters or fails.
For some its time to reap what they sow and some its time to tighten their belts and for other its time to access values but for all 3 their is a chapter of bankruptcy that can make the transition easier.

[charles brough]

Moadib,

That is good economic theory. When we recover from the financial collapse and the long deflation that would result, as well as the crime, rioting, hunger---not to mention the collapse of the world economy---we would have corrected our economic system so it would be efficient again and could climb out of the depression some five years or so from now to bring real growth rather than just credit growth and debt-pile up. I suspect the political situation would change drastically during that time and re-shape the results differently, however.

I don't know what we "should" do because it all depends upon your goals. The goal both conservatives and liberals are reaching for now is to stop the collapse fast at what ever the cost in the future. With that goal in mind, I think they are all doing the right thing and that it will work much sooner than most everyone anticipates.

[Donk]

Giving stimulus money to large companies doesn't work. They'll use it to repair their balance sheets, or buy other companies, or pay bonuses, or simply salt it away in offshore accounts.

To get through this, you need to get people spending money. I like the idea of a credit card for every adult: credit limit $1000, zero interest for, say, two years. If they have children, add another $500 per kid. Total cost less than $300 billion.

That money gets into circulation fast. Shops hire more people. So do wholesalers, manufacturers... more income all round, so the money gets spent over and over again. A virtuous circle, with the government taking a piece of it back through taxes at each stage.

Administration should be left to the bailed-out banks, who are good at doing it. And they should do it free, as a condition of the bailout

If you want the stimulus to work, don't give it to Wall Street - give it to Main Street!

[Moadib]

Dunno Donk in my opinion anytime the govt gives money away that money is taken from its citizens, passed thru a govt filter that increases cost by 30% or more then given back. It would be like taking pain pills for stomach cancer, makes it less painful but could aggrovate the problem.
If the money is taxed equally its a wash after govt gets payed for.If the money is taxed mainly from the wealthy(job creaters) companies have 3 choses: raise prices cut employees or just make less(yeah right they will pick the 3rd)The 1st two option are just a transfer back to equal taxation with companies charging extra to pay taxes and the 3rd wont happen.I dont think its nearly as bad a situation as they make it out to be. Think of how many of the loud voices stand to make a chunk of change from making it sound worse than it is. that being said i dont think we will make the right choses. I say bring it on! i do well in bad spots and its will be another lesson. Maybe give a man a fish and he eats for a day, teach a man to fish... and socialism breeds laziness

[Moadib]

Louisiana showing good sign on economic side for what im seeing

[Donk]

Originally Posted by Moadib

If the money is taxed mainly from the wealthy(job creaters) companies have 3 choses: raise prices cut employees or just make less(yeah right they will pick the 3rd)The 1st two option are just a transfer back to equal taxation with companies charging extra to pay taxes and the 3rd wont happen.I dont think its nearly as bad a situation as they make it out to be. Think of how many of the loud voices stand to make a chunk of change from making it sound worse than it is. that being said i dont think we will make the right choses. I say bring it on! i do well in bad spots and its will be another lesson. Maybe give a man a fish and he eats for a day, teach a man to fish... and socialism breeds laziness

Sounds like you're a believer in trickle-down economics. "Give to the rich, they'll spend and everyone else will benefit." You might well be the last person on the planet who still believes it. Maybe we should have you stuffed

And socialism doesn't breed laziness. Ask a Soviet or East German peasant how good things were for them in the old days. Easy welfare does, but that's another kettle of fish. And if you define welfare as "money for no work" there are a lot of your heroes who have been paying themselves more for doing less than anyone ever before in history.

[Moontanman]

If I could just get 100,000 people to send me $10 it would certainly ease my economic situation! I too worry that the 800,000,000,000 bail out will just disappear into the pockets of executives and off ashore accounts. The gov says they are going to keep that from happening but i doubt they will be able to. Greed, capitalism and stupidity got us into this mess why can't it get us out?

[Moadib]

First of all trickle down isnt giving money to the rich, it takes less of their money. When is the last time you got a regular job from a poor person. What is the good in govt handing out cash if people lost their jobs and will need more money next month.No matter how hard you try, CORPORATIONS DONT PAY TAXES. Govt raises taxes corporation raise prices or layoff. What do you guys think of the FAIR TAX?or flat consumtion tax with govt rebate on the basics?

Secondly capitolism was not what got us into this.What got us into this was govt forcing banks to make horrible loans to help low income people in houses.To be fair it was kinda time for a downturn anyway.These thing do seem to be cyclicle and we had been at 3 or 4% growth with 5% unemployment for a long time. The bad loans plus low as you can go interest rates and artificially inflated oil prices get together for a nice little storm


PS So forced labor is gunna work just as hard when the boss isnt looking as someone seeking for a raise. I doubt it. Socialist citizen are not nearly as motived. Just look at the work ethic in America before welfare was trendy(oh yes some people brag about being on welfare)

[Buffy]

Originally Posted by Moadib

What got us into this was govt forcing banks to make horrible loans to help low income people in houses.

Would you care to back up this claim?

Can you point to a specific bill that was passed or Bush Administration policy directive that caused this to happen?

Even if it were true, can you explain why Bush would have implemented such a policy?

I do recognize that for about 48 hours that this was a conservative talking point repeated by Rush, Sean and Michelle, but there's a reason that it is no longer a talking point...

Blinding ignorance does mislead us. O! Wretched mortals, open your eyes!
Buffy