Thursday, October 2, 2008
Where is the information coming from?
It seems that the majority of the American Congress is thinking one thing while the majority of citizens (or at least the most vocal ones) are thinking something very different about the bailout package, or at least the need for one. Where are both groups getting their information? Where is this disconnect coming from?
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Ha, you may have opened a can of worms there. ;) I suppose it depends on who you ask. I would say the information (or pressure) is coming from the current administration and the Treasury Secretary and the Federal Reserve. They're not willing to be honest with the people and say they messed things up and we're facing a recession no matter what. Instead they want to "fix it" for now (and help the people who give them money), but it's going to make things worse later. I think that's why the rush too -- they had to push it so we couldn't fight it. It's ridiculous, imo. And scary. But hopefully enough people are furious that something will happen to get things changed. Although it was quite a lot of people doing something about it before it was passed... Sigh... Sorry if I sound really cynical and pro-conspiracy theory, btw; lately, I've been questioning our government a lot more!
I figured the rush was to keep them from adding in more and more earmarks...
I understand that the pressure behind the bill is coming from the government. My question was more towards the "make things worse later" information. The government (all levels) seem to be getting the information that if they do this, it may help decrease the severity of the Resession. The only people I've heard that seem to be denying the certainty of a resession are the "do nothing" people- but maybe that's just the ones that I've heard. Anyways, I'm getting off my question- Who is telling the majority (or the most vocal) of the American people that the bailout is only going to make it worse? Who is telling the government that it might help?
Great Depression history is so conveluted and so large that I could see what happened there as being taken both ways.
OK, again, it's a matter of opinion probably. Well, what I mean is it depends on who you ask. ;) Anyway, lots of economists are saying it'll make it worse. In fact, nearly 400 economists signed a petition to urge Congress NOT to pass the bill. And Ron Paul supporters, of course, and opponents of the Federal Reserve, and followers of Mises economics are all against it because they understand how it's just adding more inflation -- it's not going to work to cure the situation with the very thing that started (or at least has continued) the situation.
As for supporting it, I'm thinking that information is coming from people who have an interest in banks, corporations, etc. (the people who will get the money first, before it loses its value). The Treasury Secretary used to be CEO of Goldman Sachs (conflict of interest perhaps?), for example. I personally think they're all just trying to cover their rears. Of course, the numbers of supporters of the plan have increased lately, but I think that's largely because of the propaganda starting at the administrative level and going through all the media outlets that says we HAVE to do it. The fact that so many congressmen/women didn't like it but voted for it anyway makes me think that there was bribery and pressure going on (or, politics;). So in a nutshell, experts are telling us it won't work and will make it worse later. The government is telling itself & the banks are telling it that it'll help. I'd rather believe the experts and the people whose money it takes (taxpayers).
I'm not sure what you mean by the do-nothing people denying the certainty of a recession though, Kimberly. Maybe you could elaborate or tell me who you're talking about? I guess I'm thinking of people who are against intervening with a bailout or more money, but they're not denying there's going to be a recession; they're just saying more money will make it worse (because of continued inflation). That doesn't mean they don't think nothing should be done; just not increasing taxes &/or printing more money. I think a better answer is getting rid of the Federal Reserve, cutting spending and cutting taxes. But you know my influence. ;)
I dunno, Josh. I suppose you could argue that, but they sure seem to enjoy their earmarks!
Great/fun video I just found explaining inflation: http://www.youtube.com/watch?v=t_LWQQrpSc4
And here's a link to a radio show with an economist, explaining how it's a self-fulfilling prophecy. In trying to fix the problem, we're actually creating the problem: http://www.europac.net/media/PeterSchiff_10-01-2008.mp3
In my news watching, the CBC had 2 economists on at the same time talking about the bail out. I think they had slightly differing opinions about whether the bailout was a good idea but I really only remember what one economist said, which I thought was fairly evenhanded. He explained that if the gov't didn't do a bailout now things would definitely be bad. The big question mark is whether this bailout will end up being bad or ok in the future. The way I understand it is that if the gov't can ride out the recession long enough then they can slowly sell off the stocks or whatever they have bought at the price they purchased for (or more). The worse part comes into play if these stocks are worth much less.
I don't understand economics that much so I have no way of predicting whether this bailout is doomed or not. Apparently 400 economists agree that it is doomed. I wonder how many do not agree? There are so many variables that I think this would explain why many economists are disagreeing with each other.
As to the gov't, I think that all of them didn't really want this bill. I mean who would? I think that they're hoping this is the lesser of the two evils. Only time will tell. But I'm not much of a conspiracy theorist.
One other point to think about, is that there has been news of other European countries doing similar types of bailouts (to a lesser extent). Which shows that the U.S is not alone in thinking this type of maneuver necessary.
Hello Nancy!!!
Everyone, I'd like to introduce Nancy. She's been my best friend since Grade 7 and is the reason I'm married to Josh!
I'm so glad you commented!!
I just think it's a bad decision if you think about it. It's basically trying to solve the problems all the loaning have caused with more loaning, and it's not likely that they're going to be able to sell these stocks/assets/whatever for a profit if they were already bad assets & nobody wanted to buy them in the first place, so the government had to help. $750 billion -- oh, no, wait -- $860 billion now, after the Senate worked on it -- is way too much money to take such a gamble on. I think we need more information than, "well, it might work" and "we have to do something or we're going to face a complete economic meltdown." How do we know that?? Plus, the people it was SUPPOSED to help ("Main Street"/average Americans) were largely against it, while it was mostly big business people, government administration, and the media who pushed its passage.
I also think it's just asking for more [similar] bills to get passed in the future. If the market continues to suffer, are we going to put more in, thinking the first amount wasn’t enough? But what if it improves? Does that mean the bill worked and so the next time businesses use unwise lending practices, we need to bail them out again because it worked the other time?
Besides, how is it right to take from one person to give to another to help them out of a situation they're in because of bad decisions? Even if it did help some people who couldn't pay their mortgages (and not just big businesses), why should money be taken from people who made good decisions? I know it wasn’t the fault of all those people, btw, at least not completely. There are several parties at fault here, I think: the government for pushing the lending practices, the businesses for giving loans to people with bad credit, people for trying to take advantage of the situation and trying to buy way more than they should be able to afford. But continuing to give out more money is only going to continue the situation. And, like I said, the people who did the right think shouldn’t be the ones footing the bill unless they WANT to. Plus, the money is going to be printed from the Federal Reserve (so created out of thin air) and it’s going to cause more inflation. Which is going to make prices go up and people still won’t be able to afford their mortgages, etc. It’s snowballing and we just need to stop, imo. What we need are tax cuts and reduced spending from the government. At this rate, though, not sure when that will happen. ;)
We need to just stop loaning and living off credit and start living within our means (myself included; I have a shopping problem – but I’m expected to pay for my credit cards myself;). We can’t expect the government to fix EVERYTHING, when we got ourselves into this mess (even though the government did help us get there – hopefully it means things are changing though and we’ll finally start to live within our means and pay attention to our government).
I was never a conspiracy theorist, I don't think, but I've been wondering more and more about some conspiracy theories lately -- well, conspiracy theories and dirty politics and a lot of ignorance... ;)
oh, & welcome, & good job introducing josh & kimberly :) -- it looks like you're a good matchmaker! ;)
Well said chelley!!!
Ha! Thanks! :) (except I was a bit long-winded as usual;)
why should money be taken from people who made good decisions?
It's good to be back! This is so interesting!
CB- How do you view taxes, tax collection, the government's use of taxes?
Hmm, that’s kind of a big question, Kimberly – one which I can’t really answer simply or sufficiently… but my overall feeling is, the less taxes, the better – I’d rather be in charge of my own money & what I do with it. The government is not such a brilliant organization that they can figure out the best thing to do for everyone/everything (as we have seen on many an occasion;). I also think that when the government is in charge of so many things, people learn to rely on the government rather than taking personal responsibility for their actions/choices/etc.
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