A Visual Guide to the Financial Crisis: The Bailout

[kelvin070]

What do you do if you don't have the money to pay a debt? If you are like most of us, you borrow. The US government is no different. In order to pay for the $700 billion bailout, it will have to borrow money, increasing the national debt. But who will pay for this massive bailout? If you are a taxpayer, you will.

Here is a visual guide to understanding how the bailout is funded and a couple of financial experts' take on how it could be funded.

 

[SgtSpike]

Once again, another proposal for paying for the mistakes of the mentally incompetant by taxing the rich.

The bailout shouldn't have happened in the first place, that's my firm opinion on the matter.

 

[Tim]

Once again, another proposal for paying for the mistakes of the mentally incompetant by taxing the rich.

The bailout shouldn't have happened in the first place, that's my firm opinion on the matter.

Actually sounds like a good plan. Let those who got us into this mess pay for it.

It wasn't those of us who make under $100,000 a year that got us into it. So why do we have to pay one red fucking cent to bail out wall street?

 

[SgtSpike]

Actually sounds like a good plan. Let those who got us into this mess pay for it.

It wasn't those of us who make under $100,000 a year that got us into it. So why do we have to pay one red fucking cent to bail out wall street?

Actually, it was. It was all those stupid people who got stupid ARM loans and knew they couldn't afford it, but did it anyway.

Something that I think is kind of funny: I've noticed an increasing lack of personal responsibility in America. If the consumer does something wrong, it is always the companies fault. If you pour hot coffee in your lap, you can sue for millions and win, because it is, after all, the company's fault that the coffee is hot. If you are financially irresponsible, and got an ARM loan on a house, you can get assistance from the government, because it is NOT, after all, your fault that you couldn't provide for yourself and an ARM mortgage.

It is OK to let PEOPLE and COMPANIES fail, and I don't understand why people don't understand that. It's part of the system. It's supposed to happen, so that those who are incompetant (i.e. GM, people who get ARM mortgages) will learn their lesson and do better next time. Without failure, you eliminate the possibility of success.

 

[Alien Allen]

Actually sounds like a good plan. Let those who got us into this mess pay for it.

It wasn't those of us who make under $100,000 a year that got us into it. So why do we have to pay one red fucking cent to bail out wall street?

if we did not have a crooked govt there would be ongoing hearings about the banking meltdown and people would be going to jail.

some wealthy people actually fucking earned their money. why the hell should they be penalized. That is like me going to jail for some distant relative 150 years ago having a slave.

The govt has its blood in this mess too. But notice that the same friggin idiots got re elected.

No, we deserve this shit. Until voters wake up we are destined for more of this.

 

[Tim]

Actually, it was. It was all those stupid people who got stupid ARM loans and knew they couldn't afford it, but did it anyway.

Something that I think is kind of funny: I've noticed an increasing lack of personal responsibility in America. If the consumer does something wrong, it is always the companies fault. If you pour hot coffee in your lap, you can sue for millions and win, because it is, after all, the company's fault that the coffee is hot. If you are financially irresponsible, and got an ARM loan on a house, you can get assistance from the government, because it is NOT, after all, your fault that you couldn't provide for yourself and an ARM mortgage.

It is OK to let PEOPLE and COMPANIES fail, and I don't understand why people don't understand that. It's part of the system. It's supposed to happen, so that those who are incompetant (i.e. GM, people who get ARM mortgages) will learn their lesson and do better next time. Without failure, you eliminate the possibility of success.

Tell me you haven't been listening to the congressional hearings... Just in the last week it has come to light that this mess started in 2005. The CEO's and ex CEO's of Freddie Mac and Fanny Mae were testifying that they actively got into the sub prime business in 2005 after learning on the amount of business they were missing out on. Even though over 60% of these loans qualified for prime mortgages, they were pushed into the sub prime loans. This meant more money and bonuses for the underwriting companies. It was fucking greed that got us where we are today. Once they learned how much money they could make on writing sub prime mortgages and shreddig them up and repacking them up as triple A rated securities that was it. This mess cannot be blamed on the home owner. This is grabbing up as much bad debt as possible and repackaging it as good debt. So now they don't even know whats good and what isn't. That's the home owners fault? It's greed, grabbing as much money as you can while the gettings good and not careing what that does to the market later.

if we did not have a crooked govt there would be ongoing hearings about the banking meltdown and people would be going to jail.

some wealthy people actually fucking earned their money. why the hell should they be penalized. That is like me going to jail for some distant relative 150 years ago having a slave.

The govt has its blood in this mess too. But notice that the same friggin idiots got re elected.

No, we deserve this shit. Until voters wake up we are destined for more of this.

I agree that we have a bunch of crooks in office. They are also fat at the troth of greed and they all need to go to jail.
And yes, I would even say that quite a few wealthy people earned their money honestly and they should keep it. I don't mean that all wealthy people should pay for the sins of the crooked ones... hell, if there was a way to find the bastards responsible and take all their money and put them in jail, I would be all for it. I just find it infuriating that I will have to pay for this with a piss poor economy, tight credit, higher credit card fees and rates and with more taxes... Not to mention worrying about my job. This wasn't my fault. I have a great fixed interest rate on my home, I pay all my bills on time and I am very responsible with my finanses. So why do I have to pay for their sins? Fucking assholes, every one of them that stuffed their pockets at my expense.

 

[Alien Allen]

I agree that we have a bunch of crooks in office. They are also fat at the troth of greed and they all need to go to jail.
And yes, I would even say that quite a few wealthy people earned their money honestly and they should keep it. I don't mean that all wealthy people should pay for the sins of the crooked ones... hell, if there was a way to find the bastards responsible and take all their money and put them in jail, I would be all for it. I just find it infuriating that I will have to pay for this with a piss poor economy, tight credit, higher credit card fees and rates and with more taxes... Not to mention worrying about my job. This wasn't my fault. I have a great fixed interest rate on my home, I pay all my bills on time and I am very responsible with my finanses. So why do I have to pay for their sins? Fucking assholes, every one of them that stuffed their pockets at my expense.

And yes, I would even say that quite a few wealthy people earned their money honestly and they should keep it. I don't mean that all wealthy people should pay for the sins of the crooked ones

But you are throwing a blanket and agreeing to tax them all it appears.

hell, if there was a way to find the bastards responsible and take all their money and put them in jail, I would be all for it.

there is a way. It is to elect people that are honest. And hold them accountable instead of letting them get away with shit.


You have no idea about being worried. Trust me. Michigan has been in a recession for 3 years ongoing. And my worst fears were the rest of the country would go into one and make it a double whammy for Michigan. This state is on the verge of a major meltdown. And if the Big 3 go down the tubes it will exacerbate matters to a level I don't think many will be familiar with unless they are old enough to have lived during the depression.

I not only have to worry about getting the phone to ring and getting work. I have to worry if that customer who calls will pay us. And at my current financial status if they give me a bad check that can bounce checks for payroll and who knows what as there is no margin anymore.

 

[SgtSpike]

Tell me you haven't been listening to the congressional hearings... Just in the last week it has come to light that this mess started in 2005. The CEO's and ex CEO's of Freddie Mac and Fanny Mae were testifying that they actively got into the sub prime business in 2005 after learning on the amount of business they were missing out on. Even though over 60% of these loans qualified for prime mortgages, they were pushed into the sub prime loans. This meant more money and bonuses for the underwriting companies. It was fucking greed that got us where we are today. Once they learned how much money they could make on writing sub prime mortgages and shreddig them up and repacking them up as triple A rated securities that was it. This mess cannot be blamed on the home owner. This is grabbing up as much bad debt as possible and repackaging it as good debt. So now they don't even know whats good and what isn't. That's the home owners fault? It's greed, grabbing as much money as you can while the gettings good and not careing what that does to the market later.

Then why the heck are we bailing them out? I'd agree with you that it was partially the fault of the companies as well. So if the companies and the people who agreed to take an ARM loan are both at fault, why are we bailing both of them out?

Let them both fail, and learn their mistake so it doesn't happen again.

I'll say it again: Without failure, there can be no success. Failure is what teaches us. That's why we look at history - so we can see how people failed, and how not to do things. But if we bail people out and do not let them fail, then we're eliminating that facet of learning.