Thursday, 25 September 2008
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Government Bail Out: Should We Pay for Wall Street's Mistakes?
by Nurse Jenna
While I understand that the life of a busy mom, or working person is concerned with the details of kids' schedules, managing a hectic house, paying bills, and on many days just staying afloat in daily life, I like to believe that people see beyond what is happening in their small circle to what is happening in the world at large, or at least the turmoil that is happening currently in our own country. Though many people believe these are things that are not important in their day to day lives, these bigger issues trickle down to affect everyone.In case there hasn’t been time to find those few minutes to pick up a paper in the last week and half or so, a brief overview—we are in economic crisis, something that is very real. If you are not feeling it in your pocket book now (like $4 for a half-gallon of milk), you will be soon. As was described in the Presidential Address last night, the government has bailed out big businesses that have gone bankrupt due to corrupt business practices. The tax payers are now responsible for paying over 85 billion dollars that private business negligently squandered, though never was it the big bosses’ paychecks who ever suffered. In order to do this, we are borrowing money that will leave our children with with a massive debt to repay.
So what do we all think of this? On one hand, the people that would suffer would be the everyday people whose life insurance, home insurance, retirement, and credit that would suddenly become void, or plummet if these companies dissolved. On the other, since when does government pay for private businesses’ economic mistakes? I thought we had something called Capitalism in this society?
What do you all think? Are you ready to foot the bill for a big company’s mistake? Or do think the government is right to step in?
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Comments (78)
I think all the corrupt CEO's who are walking away from this mess with golden parachutes should be held accountable and be forced to pay out of their own pockets.
I think that if we are going to bail out the businesses, the big bosses should definitely not stand to gain by all of this. No huge retirement packages. They failed the companies and should in no way get rewarded. They made money off of people who probably shouldn't have gotten loans in the first place and now we (the tax payers) are supposed to swoop in and save them? I don't think so.
... They should cut the big bosses' (CEOs', whatever's) salaries to help pay for it. It really isn't as if they need all that money (AND a lot of them don't even do that much, anyway).
(Using the impersonal "you" in the following paragraphs.)
That said, if the government doesn't step in and all these companies fail, it'll probably be detrimental to everyone in some way or another. And you could argue that it's better for the government to step in than to have a run on the banks... Because the banks will almost certainly not be able to give everyone their money -- banks don't actually keep all that much money on hand at any given time.
And, more likely, it'll be your children and grandchildren (and so on) who will be footing the bill for this, not you. All the same, you kind of have to remember that the general populace is more or less always paying for the mistakes that big companies make, anyway. (Even if they weren't mistakes in the eyes of the corporations.)
The thing is, is not just the CEOs and big corporations' fault (although they share a larger portion of the pie...and I am not advocating for them neither) but because a lot of people [from your common everyday folks to small-mid size companies] got greedy. I think we are left with a very little choice and would probably have to accept the bailout plan in order to avert the 2nd great depression, but I definitely think it should be heavily regulated and strong emphasis be place on the protection of the taxpayers. I would like to see these corporations take some responsibility for their actions and be held accountable for what they have done as part of the bailout plan.
I think we should start by calling it what it is. A tax payer bailout. And I think that by forcing taxpayers by force of law to pay for someone elses mistakes or greed for whatever reason is wrong and unconstitutional.
i think the CEO's of the companies we are 'rescuing' LOL should be fired and only given the same compensation as any employee in their company would be given if they were laid off. and then i think if any wrong doing is found on their part they should be prosecuted and sent to prison.
but the 'rescue' (using administrations new term for bailout) has to be passed in some form or the stock market will plummet and throw our country into economic devastation. and i think they are removing the verbage that gives Paulson complete control.
at this point, it doesn't really matter how we got into. we've got to fix the leak in the levee or it'll be Katrina all over again x1000!
What was that my mother was always telling me? Oh, yes... "Damned if you, damned if you don't."
Similar to the current world of health insurance, it appears to be the worst possible combination of regulation and greed. I've heard a couple alternate methods for dealing with this (one involves undoing one of the Sarbane-Oxley rules from the Enron scandal)...
I fear that my children will grow up to be mere millionaires in a world where a gallon of gas costs $400 and a gallon of milk cost $350.
I don't think we really have a choice anymore. The goverment is going to have to do something or everything is going to crash.
Its ridiculous. There's a reason that there are protests going on in 140 cities and towns across the US today.
I think the money should be required from the owners and corporate people, first. The government can demand that a large majority of their personal profit be used to pay at least part of the debt.
I think that personal responsibility has gone out the window and it's bleeding over into business practice. How about people learn how to manage money, budget and NOT buy crap they can't afford, teach that to their kids, and run businesses with those same principals? Then maybe we'll have responsible people running large businesses and nobody will have to bail them out.
let me get this straight.
the ceo's come away with like 9 million dollars, right?
and the gov't pays out billions, right?
so why should WE have to pay when the ceo's and whatever have money?
pardon my french, but they're assholes
I cannot wait to start paying for other people's mortgages. It's going to be great when the government raises our taxes and then we'll be even more of a nanny state. And, the bureaucracy! Wowie...imagine the job opportunities and the control over everything financial. And it's all because of greed and lack of personal responsibility.
I received this in my mail this morning - something to think about. Do you think this would work too? For me this is a far better solution and shows the frustration going on where Govt policies re big business is concerned.
-------Original Message-------
Subject: govt. spending
Hi everyone, check this formula out,
I’m against the $85,000,000,000.00 bailout of AIG.
Instead, I’m in favor of giving $85,000,000,000 to America in
a We Deserve It Dividend .
To make the math simple, le t’s assume there are 200,000,000
bonafide U.S. Citizens 18+.
Our population is about 301,000,000 +/- counting every man, woman
and child. So 200,000,000 might be a fair stab at adults 18 and up..
So divide 200 million adults 18+ into $85 billon that equals
$425,000.00.
My plan is to give $425,000 to every person 18+ as a
We Deserve It Dividend .
Of course, it would NOT be tax free.
So let’s assume a tax rate of 30%.
Every individual 18+ has to pay $127,500.00 in taxes.
That sends $25,500,000,000 right back to Uncle Sam.
But it means that every adult 18+ has $297,500.00 in their pocket.
A husband and wife has $595,000.00.
What would you do with $297,500.00 to $595,000.00 in your family?
Pay off your mortgage – housing crisis solved.
Repay college loans – what a great boost to new grads
Put away money for college – it’ll be there
Save in a bank – create money to loan to entrepreneurs.
Buy a new car – create jobs
Invest in the market – capital drives growth
Pay for your parent’s medical insurance – health care improves
Enable Deadbeat Dads to come clean – or else
Remember this is for every adult U S Citizen 18 + including the folks
who lost their jobs at Lehman Brothers and every other company
that is cutting back. And of course, for those serving in our Armed
Forces.
If we’re going to re-distribute wealth let’s really do it...instead of
trickling out a puny $1000.00 ( “vote buy” ) economic incentive that is being proposed
by one of our candidates for President.
If we’re going to do an $85 billion bailout, let’s bail out every adult
U S Citizen 18+!
As for AIG – liquidate it.
Sell off its parts.
Sell off the real estate.
Let the private sector bargain hunters cut it up and clean it up.
Here’s my rationale. We deserve it and AIG doesn’t.
Sure it’s a crazy idea that can “never work.”
But can you imagine the Coast-To-Coast Block Party !
How do you spell Economic Boom?
I trust my fellow adult Americans to know how to use the $85 Billion
We Deserve It Dividend more than I do the geniuses at AIG or in
Washington DC.
And remember, The Birk plan only really costs $59.5 Billion because $25.5
Billion is returned instantly in taxes to Uncle Sam.
It looks like a deal has been reached. Basically, we're buying up bad mortgages so that these banks and keep lending. What the heck? the US goverment borrows money from other countries to fund this project, which is basically a pyramid scheme so that we can lend help other banks lend MORE money to people. Am I on crazy pills?
"Our policy in this administration -- laws shouldn't bail out lenders, laws shouldn't help speculators."
-- President Bush, May 19, 2008
So uhh, about that... I guess the administration has a new policy.
I think it's scary. I know it would've been scary if the govt. didn't bail them out, too, but this is just a band-aid and I think could lead to even worse things. I'm a believer in good business practices being rewarded and bad business practices being punished. It sucks that so many Americans are being hurt by the stupidity and recklessness of people running big corporations who should know better. But a free-market economy has its high times and its low times and for government to interfere to this extent during low times is really going to throw everything out of wack. And the national deficit is completely depressing - I hate to even think about it. I just wonder if any governmental leaders consider it a problem - because no one seems to have a plan to take care of it.
Anytime the government steps in to offer a "bail out", I always tend to shudder, because, as a friend of mine reminded me recently, nothing from the government -- any government, be it the USA, Japan, South Korea, Russia, or wherever else -- comes for free...
I posted, yesterday, an article on my thoughts abut the current "economic 'crisis'", which can be found at this address (feel free to read, post a reply, or comment as desired):
http://www.xanga.com/JandJinJapan/675769880/item.html
@JandJ - it's certainly not free. Like the original post says, its our kids - or more accurately, our grandkids - who will someday have to pay this debt. What thegdovernment is doing is basic hypocrisy - we're borrowing MORE money as a country to pay off bad loans made by corporations so they can loan MORE money. And our kids get stuck with the bill.
Sigh. Yeah, the economy is really going down the drain. But at least we have that $700 billion plan (if it works).
@the_last_timelord - Who cares if we have a plan? That doesn't make it a good one.
@filtered_sunlight@xanga - How do we know we're damned if we don't. If we don't the market would right itself as it usually does.
I don't think we should pay for a private company's mistakes. I think this bailout is a half-baked plan and that we, the taxpayers, are going to end up getting hurt in the process.
im pretty sure yeah, those CEOs should be put up on the stake,
and instead of the govment buyin up 700 billion in those company's stocks (which have dropped like 99%) why not use that 700 billion to square up the outstanding mortgage debts that people cant pay due to already hard times in this country doubled with loans they should have never been approved for?
then the companies would get their money back, and there wouldnt be a big problem.
buyn into the companies gives the companies money, but doesnt fix the cause of the problem- those homeowners still wont be able to pay those debts.