I could live with this IF… but the IF is not even being addressed. It wasn’t addressed with the other bailout to the tune of $300 billion and it won’t be addressed this time, either.

It’s becoming a pattern and I watch my disposable income smaller and smaller because of these things, even while they try to convince me that income has gone up.

When these bailouts encroach beyond my disposable income, what then?

I feel like I’m being punished for doing things right while the people who did things wrong are being rewarded.

The problem with this debate is as follows:

The pro-bailout transaction folks correctly identify (1) that a liquidity crisis can easily become an economic crisis and (2) that the solution needs to involve removing, at leat temporarily, distressed paper from the balance sheets of institutions which issue credit. Those same people refuse to acknowledge that there are other potential solutions besides the proposed bailout.

The anti-bailout transction folks are correct that this is a boondoggle, but fail to acknowledge (1) that this is not simply a matter of bad loans, as the 91% of full compliance loans are in the same boat as the bad loans and (2) that the inability to borrow money WILL have a devastating impact on the economy.

The underlying problem that neither side apparantly wants to discuss:

“Accounting rules require banks to value many assets at something close to a very low fire-sale price rather than the hold-to-maturity price,”

http://www.bloomberg.com/apps/news?pid=20601068&sid=aqCh43qzoq5M&refer=home

Seems to me that the correct solution is to modify the accounting rules so that we don’t force fire-sale priceses. The purpose of the proposed bailout is to subject the distressed assets to different accounting rules. Why not just let the companies keep the distressed assets, and let them apply different accounting rules.

http://www.ftportfolios.com/Commentary/EconomicResearch/2008/9/22/heresaplantoavoidanew_rtc

http://online.wsj.com/article_email/SB122178603685354943-lMyQjAxMDI4MjIxMjcyODI2Wj.html

Part of Reagan’s genius in office was he recognized that the psychology of the markets had become equal to the reality of the fundamentals of the market in determining their direction. He knew how to make people feel good as well as confident about being Americans and he did it. Part of the problem with our leaders at the moment is that Obama has the charisma without the know-how and his belief is that we don’t deserve to be and optimistic country while McCain has the know-how and believes we are a great country that ought to be optimistic, but lacks the charisma. Another part of the problem is the nihilistic MSM. Watching Fox News the other night, all three of the panelists on the Brit Hume show thought McCain was right that the key fundamentals of the economy were good, but he was stupid to say it.

Bailouts will just encourage this activity - hey, we can do anything we want and the Federal government will bail up out…sign me up.

I do realize that major consequences may (may) occur, but in the long run, I think that it will be better for the economy if those that caused the problem lose!

Yes, it also creates problems for those foolish enough to take out loans that they could not afford, but they can always rent. (I know, not the American way)…but more affordable in the long run.

Higher unemployment means more foreclosures which will increase the losses on mortgage securities.

More insecurity means people will be unwilling to take on a large mortgage. Many more will decide to stay as renters if they feel their jobs are threatened. The result will be a much bigger decline in housing prices that we would get if the economy stays healthy.

Broken financial markets might mean that mortgages become very expensive or even unavailiable. In that kind of economy houses would sell for whatever people could afford to pay in cash.

The really scary possibility is the possibility that things get out of control in ways that nobody could foresee. The Fed and Treasury Department might not be able to fix things before a big chunk of the financial system collapses like a line of dominoes. Then we could get something like a Great Depression. That will be the end of America as a global power because our military will be slashed to save money. People might have to retire at 75 rather than 65. People may turn to Socialist or Facist solutions like they did in the 1930s.

No bailout, and a bit more control of lending institutions that have insisted on giving credit to those unable to afford it.
(Yes, I mean all those Democrats that insist on helping those that can’t afford home loans).

It’s time to let those that caused this problem to suffer…and that includes those that caused the problem - CONGRESS!

Check this out

I understand the desire to punish the evildoers of Wall Street. But are we going after every mortgage broker from Iowa to Oregon, Kansas to South Carolina, who pushed through a bad loan simply to make his cut, figuring hey, the equity in the house will cover the loan if the buyer defaults?

How about the mortgage-backed securities departments of virtually every broker/dealer (most of them the subsidiaries of banks), from Charlotte to San Francisco, who packaged these loans and sold MBS?

Gonna round up every hedge fund manager from Boca Raton to Boston who was gobbling MBS into their portfolios like a starving man at Thanksgiving dinner?

It isn’t just some execs in NYC.

And when, say, Wachovia Securities goes down for its MBS sins, then the Wachovia branch bank on the corner may be insolvent. And the drycleaner whose business checking account is there may not be able to meet payroll.

Oh sure, the FCIC will eventually ante up. Meanwhile, his employees will be evicted from their homes for being unable to pay their rents, and his electricity will be turned off for not paying the bill.

Cash flow is the lifeblood of small businesses, many of which can only survive a few weeks or even a few days without any.

If you let Wall Street fail, you’ll see the proof of “trickle down economics” in very short order.

It’s not just the regulations of F & F that Democrats imposed, it’s the whole practice that was put in place to allow this to happen.

We were assured then that it would be fixed, yet this is suddenly thrust upon us as a crisis… and it must be resolved NOW to stop further crises.

As Blackhedd said, they will issue warrants and what those warrants will do is cover up the fraud. When that happens, these same people will go back to business as usual at the taxpayers’ expense because there were no adverse consequences involved. Nobody is even talking about investigating anything, just a “give us your money and we’ll fix it” attitude.

And we’re assured again that this will fix it. We’re warned that if we don’t act quickly it’s going to get worse.

Average people like me feel like we’re being set up and that this plan has been in action for a long time.

Now, I know a lot of good people are going to get caught up in the nightmare with the bad people but if this sort of thing is allowed it sets the pattern for everything in the future.

I have to come down on the side of the V, too. Capitalism means bad businesses fail, not get bailed out and allowed to continue fraudalent practices.

Take out your wallet, and remove the cash. Throw everything else away. The cash you have in your hand is what you can count on to live on for the next few years.

You may not be able to cash or write checks (remember, checks are a form of credit), you’re credit card may not work, your debit card may not work. You may go to the bank to withdraw your checking or savings account in person, and find the bank doesn’t have the cash to cover your withdrawal demands. And in an all cash economy, the FDIC could be overrun with claims, causing a huge delay in processing, and at the worst, a cut in the benefit.

Small businesses will have to pay employees in cash. They will have to pay for inventory up front. And on. And on. And on. The consequences for business could cause unemployment to spike up to and exceed 20%.

Unless you have your savings under your matress, youwill be hurt, and hurt bad.

Now is there a gaurantee that it will get this bad? No. But their also isn’t a gaurantee that it won’t. I cangaurantee that it will be some shade of bad.

Seriously, I think the bailout, prudently constructed, is a good idea because it’s in the national interest. As with everything else, some people will benefit who probably don’t deserve too. We put up with it for the greater good.