It has passed

263-171

[Edited on October 3, 2008 at 1:27 PM. Reason : .]

10/3/2008 1:26:01 PM

hello hyperinflation.

10/3/2008 1:28:44 PM

thank god we got a bailout.

10/3/2008 1:29:03 PM

inflation shouldnt be bad, that 700 billion dollars is only like 5-6% of our gdp or maybe less

10/3/2008 1:30:19 PM

after all the earmarks the bill will cost well over 800 billion. When all that money is created basically out of thin air, it has a huge effect.

10/3/2008 1:41:36 PM

Son of a bitch.

10/3/2008 1:47:34 PM

Quote :

"after all the earmarks the bill will cost well over 800 billion. When all that money is created basically out of thin air, it has a huge effect."

not nearly as much of an affect as the current credit crunch. If you haven't been paying attention, California cannot even get short term loans from the banks to cover payroll while they wait for tax revenues to come in. California, probably one of the safest loans available and that is just the tip of the iceberg.

10/3/2008 1:49:22 PM

fuck

me

10/3/2008 1:52:51 PM

ZOMG! the economy will take off right now!

Oh wait, the Dow is up less than 100 points.



Good to know we're buying our way into the shitter.

10/3/2008 2:02:32 PM

that is just knee-jerk nonsense. The economy is in the crapper right now, this rescue plan will mitigate further damage. Without it, the current recession will be much worse.

10/3/2008 2:06:10 PM

^^^^i don't disagree that the credit crunch is bad, i do however disagree that this bail out is a prudent way to handle it. its incredibly shortsighted and will cause more problems than it solves in the long run.

just for shits and giggles, here are a few earmarks added to the second bill to help it slide through:

Quote :

"Creation of a seven-year cost recovery period for construction of a motorsports racetrack: Track owners currently follow a seven-year depreciation schedule and write each year's depreciation off their taxes. The IRS wanted to increase the depreciation timetable to 15 years, which would mean the track owner's depreciation would be cut in half. The measure in the keeps the seven-year depreciation schedule for two years and would cost taxpayers $100 million. A refund of excise taxes to Puerto Rico and the Virgin Islands for rum: A $13.50 per gallon excise tax is placed on rum imported into the United States. The measure extends to December 31, 2009, a refund of $13.25 per gallon tax back to Puerto Rico and the Virgin Islands, which are both U.S. territories. The refund has been in place since the early '90s. The measure would cost taxpayers $192 million. Income averaging for amounts received in connection with the Exxon Valdez litigation: The measure would allow the plaintiffs who won damages from Exxon Mobile for the oil spilled by the Exxon Valdez to average the award over three years rather than treating it as income in a single year. The measure was backed by Alaska Rep. Don Young and would cost taxpayers $49 million. Secure rural schools and community self-determination program: The program replaces revenue rural communities used to enjoy from the sale of federal forest land. The measure is sponsored by lawmakers from Oregon and Idaho. The program would cost taxpayers $3.3 billion. Deduction of state and local sales taxes: The measure allows citizens who do not pay state income taxes to deduct the amount of sales tax they pay over a year from their federal income tax for two additional years. States that benefit include Texas, Nevada, Florida, Washington and Wyoming. The measure would cost taxpayers $3.3 billion. Provisions related to film and television productions: In order to keep movie production in the U.S., production companies would be allowed to deduct the cost of producing the films from their taxes. Rep. Diane Watson, D-California, has been one of the program's biggest supporters. The measure would cost taxpayers $478 million over 10 years. Extension and modification of duty suspension on wool products, wool research fund and wool duty refunds: The measure helps U.S. worsted wool fabric makers and clothing manufacturers. The bill extends provisions through 2014 or 2015 that were originally sponsored by Reps. Louise Slaughter, D-New York, and Melissa Bean, D-Illinois, in 2007. The measure would cost taxpayers $148 million. Extension of economic development credit for American Samoa: The measure would extend for two years provisions meant to help economic development in the U.S. territory of American Samoa. The measure would cost taxpayers $33 million."

yay to spending money we don't have.....isn't that one of the things that got us in this situation to begin with?

Quote :

"that is just knee-jerk nonsense. The economy is in the crapper right now, this rescue plan will mitigate further damage. Without it, the current recession will be much worse."

no, this bill is knee jerk nonsense...just ask the hundreds of economists that wrote letters outlining the shortsigtedness of the whole thing. and again, not denying it will help in the immediate short term, but will do much more harm in the long term.

[Edited on October 3, 2008 at 2:10 PM. Reason : .]

10/3/2008 2:08:10 PM

Quote :

"yay to spending money we don't have.....isn't that one of the things that got us in this situation to begin with?"

\


No.

Quote :

"^^^^i don't disagree that the credit crunch is bad, i do however disagree that this bail out is a prudent way to handle it. its incredibly shortsighted and will cause more problems than it solves in the long run."

What solution do you suggest other than, "let the markets work it out."

[Edited on October 3, 2008 at 2:11 PM. Reason : .]

10/3/2008 2:10:27 PM

^sure is

giving a $500,000+ loan to someone who makes $40,000 a year is the definition of spending money you don't have.

10/3/2008 2:11:55 PM

''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.'' - 1999

Source: http://query.nytimes.com/gst/fullpage.html?res=9c0DE7DB153EF933A0575AC0A96F958260&sec=&spon=&pagewanted=all

10/3/2008 2:12:07 PM

^^^^^Out of the ashes though...

I'm starting to feel that things will get worse, but not worse enough where the gov. has to spend 30% of the entire budget to keep things stable. That's a LOT of money, and worse, it sets a bad precedent.

If Cali has to cut its spending to make ends meet BFD, that's just how it has to be. Let them borrow money directly from the Fed.

It's ridiculous though that they literally pulled 700 billion from their asses, then another 150 billion gets tacked on for more bullshit, and it's not clear how much it will help, and if such drastic measures are even needed.

Who was it that said "for economists, the real world is a special case?" I have yet to see any hard numbers or statistics that indicate this bailout is truly needed.

[Edited on October 3, 2008 at 2:13 PM. Reason : ]

10/3/2008 2:13:15 PM

Borrowing money from the Fed is exactly what this rescue plan amounts too. This rabid huey long economic populism will not get us out of the mess.

10/3/2008 2:16:09 PM

Quote :

"that is just knee-jerk nonsense. The economy is in the crapper right now, this rescue plan will mitigate further damage. Without it, the current recession will be much worse."

Well it cost a shitton less than that $810B knee-jerk reaction.


Look, we're going to infuse the economy with billions of dollars. Might cause some inflation, might not. We'll see. But the fact of the mater is that it won't raise housing prices. Falling housing prices have reduced the net worth of homeowners, causing them to be able to purchase less. Among the things they could spend less on? Houses. The bubble pops. The crisis on Wall Street was a symptom of a much larger fundamental shift in the US economy.

With a savings rate around zero and the assets upon which credit was based falling in value, the American consumer (interesting that we refer to each other as consumers more often than citizens) does not have the spare cash to grow the economy through further spending. It is as if a patient cut his head when he passed out from cardiac arrest and we're pissing all over ourselves to get a band-aid on his skull.

10/3/2008 2:19:47 PM

your analysis would be on par, if it had anything to do with the financial crisis.

10/3/2008 2:21:15 PM

^how about economist's analysis:

http://www.worldnetdaily.com/index.php?fa=PAGE.view&pageId=76231

Quote :

"For all their recent troubles, America's dynamic and innovative private capital markets have brought the nation unparalleled prosperity," they say. "Fundamentally weakening those markets in order to calm short-run disruptions is desperately short-sighted.""

Quote :

"Investors who took risks to earn profits must also bear the losses," the economists say in their letter. "Not every business failure carries systemic risk. The government can ensure a well-functioning financial industry, able to make new loans to creditworthy borrowers, without bailing out particular investors and institutions whose choices proved unwise"

The only thing in this bill that is prudent is raising the fdic insurance.

[Edited on October 3, 2008 at 2:29 PM. Reason : .]

10/3/2008 2:29:32 PM

good luck getting economist to agree with each other.

Quote :

"The only thing in this bill that is prudent is raising the fdic insurance."

That's just window dressing that doesn't really have anything to do with the insolvency in the financial markets right now.

[Edited on October 3, 2008 at 2:32 PM. Reason : .]

10/3/2008 2:31:25 PM

^which is why it is astounding that hundreds of prominent ones are in such agreement.

do you have any idea what you're talking about?

http://www.charlotteobserver.com/431/story/226799.html

Quote :

"Starting Friday morning, Evans said, businesses and institutions with large accounts started withdrawing money to lower their balances to below the federally insured $100,000 limit. They weren't closing accounts, he said, adding “they were very apologetic in saying they love the service they get from Wachovia and they weren't leaving Wachovia. They were just moving their money until things settled down.”"

[Edited on October 3, 2008 at 2:35 PM. Reason : .]

10/3/2008 2:33:28 PM

the number of economists who signed that letter is par for the course.

Again, the FDIC issue is just window dressing. It has nothing to do with the insolvency that is currently attached to Wachovia.

10/3/2008 2:42:22 PM

^Did you read the article? yes wachovia was in trouble regardless, but b/c of the silent run last friday, they would have been unable to open for normal, day-to-day business monday b/c of lack of capital. That fear based run was soley b/c of large investors getting down to the $100,000 insurance limit.

had the limit been at $250,000, $500,000, or even $1,000,000 that would not have happened.

also, I'd love to see some reputable sources backing your claims....I haven't even gotten that from the politicians who rammed this thing down american's throats

[Edited on October 3, 2008 at 2:56 PM. Reason : .]

10/3/2008 2:54:10 PM

Unless that articles writer has the ability to see into the future by writing about a silent bank run (in the past tense none the less) the day before friday, those fears were not realized. As the bank was open on Monday, Tuesday, Wednesday, Thursday, and Friday of this week.

10/3/2008 2:57:37 PM

^yes it was, in large part b/c of the fdic involvement because of the run

Quote :

"The FDIC became more heavily involved as the weekend progressed because of its role in protecting consumer deposits. For the first time, the agency triggered a “systemic risk exception” under the 1991 law that allows it to ignore a requirement to choose the “least costly” method for resolving a failing bank. "

still waiting on those reputable sources....

10/3/2008 3:03:27 PM

so in other words, operating under the current FDIC threshold, the bank still managed to remain open despite the silent bank run. Meaning, rasing the FDIC threshold is merely window dressing on the current problem. Yes, it was a necessary step, but it is still window dressing.\

reputable sources on what?

[Edited on October 3, 2008 at 3:06 PM. Reason : .]

10/3/2008 3:06:01 PM

^No, if the insurance was higher, it wouldn't have happened in the first place....

not to mention it would encourage people to put more money in the banks which would increase liquidity (if you remember people were content to invest at a loss in bonds just b/c it was safe).

i'd just like to see some backing for your claims that this bloated bailout is a good idea by people other than politicians, who probably can't explain it themselves....I have yet to see any substantive defense of the plan from anyone...other than the theoretical gloom and doom defense.

10/3/2008 3:13:17 PM

Quote :

"^No, if the insurance was higher, it wouldn't have happened in the first place...."

yet, the bank still opened and its problems are far more deep then a silent run on Friday. Wachovia has had issues with solvency for a long time, none of which had anything to do with account holders withdrawing money.

Quote :

"not to mention it would encourage people to put more money in the banks which would increase liquidity (if you remember people were content to invest at a loss in bonds just b/c it was safe)."

bonds are long-term investments. Not the same party as FDIC insured accounts. Also, bonds are not investing at a loss. They are investing at a more conservative return rate.


Now, is every aspect of the bailout a good idea. No, which is why you won't have economist saying the entire bailout is a good idea. You chose to think the bailout is a bad idea, I think it is a good idea. No matter who i cite as being in support of it, you will dismiss it. It's a fruitless venture in soothing your ego.

10/3/2008 3:22:27 PM

Quote :

"No matter who i cite as being in support of it, you will dismiss it. It's a fruitless venture in soothing your ego."

Lol, i guess we'll never find out, b/c for some reason you resist citing any

Quote :

"bonds are long-term investments. Not the same party as FDIC insured accounts. Also, bonds are not investing at a loss. They are investing at a more conservative return rate. "

yes they are totally different, and at a point the real rate of return on gov treasury bonds was negative. point used to illustrate that investors are looking for above all, safe investments now...nothing would be more safe than a bank account federally insured.

Quote :

"which is why you won't have economist saying the entire bailout is a good idea"

my point is, I have yet to see ANY person of any significance provide any logical reasoning that the buying of these bad mortgages is a good idea in the long run...and you are not changing that.

[Edited on October 3, 2008 at 3:52 PM. Reason : .]

10/3/2008 3:49:52 PM

you normal savings account isn't really an investment.

Also, Sec. Paulsen is a person of rapport who supports this, along with Federal Reserve Chairman Bernanke.

10/3/2008 3:54:11 PM

There have been a lot of references to socialism, but I think this is more relevant: http://en.wikipedia.org/wiki/Economics_of_fascism

10/3/2008 4:08:30 PM

^Fascism is the most overused insult in the history of political insults, and it isn't even close to relevant to what is going on today.

^^The correct answer is Warren Buffett


[Edited on October 3, 2008 at 4:10 PM. Reason : 2]

10/3/2008 4:08:48 PM

I'm not trying to insult, and it is relevant.

also: Warren Buffet has an awful lot of skin in the game with his recent private bailout of goldman sachs, I don't know that you can take his word.

[Edited on October 3, 2008 at 4:17 PM. Reason : also]

10/3/2008 4:12:11 PM

Good point on Buffett.

With the overuse of the word, Fascism has lost it's definition over time. I don't believe that it applies to today's economic crisis. It's just a blanket insult thrown at any political issue where emotions are involved.

[Edited on October 3, 2008 at 4:35 PM. Reason : 2]

10/3/2008 4:33:27 PM

Quote :

"my point is, I have yet to see ANY person of any significance provide any logical reasoning that the buying of these bad mortgages is a good idea in the long run...and you are not changing that."

We aren't buying mortgages we are buying mortgage backed securities at as much as 5000% under value. There is no market for them now because the state of the economy. Once the market recovers (I'm guessing 10 years from now) we will be able to sell them back and make a profit and the government is the only one willing to make this risk because they are the ones that have the ability to fix the market.

If the chairman of the federal reserve and secretary of treasury who made this our of their bosum are not economists of significance then I feel bad for you son.

10/3/2008 4:45:02 PM

Quote :

"Once the market recovers (I'm guessing 10 years from now) we will be able to sell them back and make a profit and the government is the only one willing to make this risk because they are the ones that have the ability to fix the market."

Uh, yeah, I'm calling bullshit. No investor is going to turn down 5000%, or even 500% "guaranteed profit in 10 years" - the problem is, this is not the case. We are not looking at a "guaranteed profit in 10 years."

And if you actually believe this is true, then why the hell aren't you calling your stock broker right now to get in on those MBS? Unless, of course, you're afraid you'd lose your shirt.

But it's fine if the government does. I mean, they can always print more money!

10/3/2008 5:53:21 PM

Quote :

"your analysis would be on par, if it had anything to do with the financial crisis."

What caused the financial crisis? Oh, right, mortgage backed securities backed by practically worthless mortgages. I'm not sure how that isn't related to the financial crisis.

Some people are acting like this hit out of nowhere, with no warning. I think the suddenness of the collapse surprised everyone, but I can't see how anyone is shocked that a system based around concealing the real value of assets would collapse.

10/3/2008 11:19:18 PM

Quote :

"If you haven't been paying attention, California cannot even get short term loans from the banks to cover payroll while they wait for tax revenues to come in."

Too bad the reason no one could get loans recently is because all of the banks were holding their funds until they figured out what the gubment was gonna do. Gotta love those self-fulfilling prophecies, eh?

10/4/2008 1:04:56 AM

Quote :

"This is the first time in the history of the United States that the president has sought to provoke a financial panic to get legislation through Congress. While this has proven to be a successful political strategy, it marks yet another low point in American politics."

http://www.cepr.net/index.php/op-eds-&-columns/op-eds-&-columns/statement-on-congressional-approval-of-bailout/

10/4/2008 9:50:28 AM

10/4/2008 11:26:20 AM

^^ excellent article

10/4/2008 6:07:56 PM

yeah...i for one didnt want this bailout to happen

10/4/2008 6:11:14 PM

With every passing year, moving to Canada is looking more and more attractive.

10/4/2008 8:18:21 PM

Sweet! No more tax on wooden arrows thanks to the Bail-Out!

http://www.opencongress.org/bill/110-s3055/text


WTF Is wrong with this country? Why did we have a tax on wooden arrows, what does shit like this do to the inefficiency of our tax code, and who makes this part of their constituent services.?

10/5/2008 11:09:58 AM

^They've got to change unimportant tax codes some times, and if each one had it's own bill, Congress would be even more inefficient than it already is.

10/5/2008 1:05:12 PM

Quote :

"backed by practically worthless mortgages."

The mortgages aren't worthless. You are making the following flawed assumptions Very little of the mortgages are toxic.

1. the mortgages are worthless

2. The value of the property is equal to the value of the mortgage.

10/5/2008 1:10:00 PM

^^ Right, and I really have no problem with taking away a 10c tax on wooden arrows. My real issue is why there was a 10c tax on wooden arrows in the first place? I'd like to hear the back story on that one.


^ Mortgages are backed by real property. In this case, the value of the money lent cannot be backed up by the value of the property. A debt backed by collateral worth less than the value of the debt isn't technically worthless, but it isn't a very good investment. What is flawed about that assumption?

The issue is that banks cannot value the MBSs they hold on account of the fact that no one in the banking industry completely understands. Compound that with the fact that the housing bubble has popped and you wind up with what the market deems to be bad investments.

So, while "technically" an MBS may posses some value, without a market interested in purchasing it, it is "practically" worthless. The government, in effect, created an artificial market for unwanted goods with the $700B bailout.

10/5/2008 1:28:35 PM

Perhaps they wanted to discourage marketing bows/arrows to children because some of the dumber kids might hurt themselves.

Then perhaps they realized writing that sort of thing into law is just silly.

10/5/2008 1:35:52 PM

what, gov't admitting that it shouldn't tell us how to run our lives? that's riduckulous

10/5/2008 1:41:09 PM

^^ No one other than a staunch traditionalist uses wooden arrows any more though. Speaking of which, time for me to go to the range.

10/5/2008 2:05:30 PM