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October 12, 2008 – Comments (8)

I am getting majorly concerned about what these bailouts mean in the bigger picture.

Mish has a post about the US picking in buying insolvent mortgages, and it looks like this kind of plan is being picked up all over the place...

I seriously had not given any thought to government coming in and doing this and I think it is going to be a disaster.

My instinct is that it is going to be worse making taxpayers take the losses rather then individuals that actually have the assets to lose.  And there is zero balance -- 100% of the risk being given to tax payers.

Crap, I really don't want to be studying this stuff right now...

I don't see the mechanism for how wages go up but rather just more pressure on income.

8 Comments – Post Your Own

#1) On October 12, 2008 at 2:47 AM, ikkyu2 (99.31) wrote:

It might prevent some job loss, which increases aggregate wages over what they would have been, if you look at it like an economist would.

To me, it is inflationary, and this kind of money supply inflation is basically wealth transfer.  I think the idea is supposed to be that better the wealth should transfer than it disappear.

I also think, sad to say, that the US will emerge from this in better shape than a lot of the rest of the world will. 

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#2) On October 12, 2008 at 8:02 AM, rudolphsteiner (< 20) wrote:

"the US will emerge from this in better shape than a lot of the rest of the world will"

better than a lot of the world, but I feel the US will be a second-tier power soon. Perhaps there will be no more superpowers, or perhaps it will be China, I don't know. 

The US has too much debt at all levels, and not enough willingness to change. Like Deb I fear what too much inequality will do to US society. A democracy can only withstand so much poverty - during the great depression the seeds for massive social uprising were growing, it was called "the red decade" by some. Or consider present-day Venezuela. Chavez is a product of massive inequality - too much poverty alongside the wealth of the few.

Ironically, Bush-style tax cuts to the wealthy mirror those that were done in the 1920's - if you transfer too much wealth up the chain, there is no hope left, let alone 'consumer confidence'  at the bottom. People find hope elsewhere, and that is not always good for democracy, and certainly not for capitalism.

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#3) On October 12, 2008 at 8:50 AM, rudolphsteiner (< 20) wrote:

"Socialism is indeed alive and well in America; but this is socialism for the rich, the well connected and Wall Street. A socialism where profits are privatized and losses are socialized with the US tax-payer being charged the bill of $300 billion."

- Nouriel Roubini

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#4) On October 12, 2008 at 9:29 AM, MarketBottom (29.22) wrote:

If anyone really wants the truth about where we are and why we are here, they will need to do their own research in regard to last sixteen years. Most people do not care about the truth.  The last sixteen years have seen the US people in an epic downward spiral, with the accumilation of excessive debt and the false sense of wealth. The demise of ethics and values starting PRECICELY IN 1992 are now rampant. All that possibly could be left would be for the media to have a telecast from the US legislature of a Roman style orgy.

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#5) On October 12, 2008 at 9:46 AM, rudolphsteiner (< 20) wrote:

Hmm, well for all his faults Clinton was the rare president who was able to balance a budget.

The end of US energy policy was 1980, and today's massive trade imbalance in energy is the result. This played no small part in the present debacle.

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#6) On October 12, 2008 at 9:50 AM, madmilker (< 20) wrote:

Soviet Leader Khrushchev said….
You Americans are so gullible. No, you won’t accept communism out right, but we’ll keep feeding you small doses of socialism until you’ll finally wake up and find you already have communism. We won’t have to fight you. We’ll so weaken your economy until you fall like over-ripe fruit into our hands.”

Well...the fruits landed in D. C. and all tat are in tat barrel is rotten to the core.  Only five country's left tat don't have a Rothschild bank....Iran; North Korea; Sudan; Cuba; and Libya.

Afghanistan wus #7.......Iraq wus #6

So!  where do you think the next war will start.....duh!

They can print money out of thin air every day of the week but God put only one third land on this earth not a hundred per-cent....if you got any...you can lose it by way of a carpetbagger, banker or broker of such....but God ain't makin' any more.  Land is the salvation of your soul...so!  you had better buy more.

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#7) On October 12, 2008 at 9:50 AM, MarketBottom (29.22) wrote:

Maybe you shoud do some research, the budget was balanced with some very unique off balance sheet transactions..

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#8) On October 12, 2008 at 12:11 PM, StatsGeek (29.28) wrote:

Rudy is dead on with this, so I have to echo it:

The US has too much debt at all levels, and not enough willingness to change. Like Deb I fear what too much inequality will do to US society. A democracy can only withstand so much poverty - during the great depression the seeds for massive social uprising were growing, it was called "the red decade" by some. Or consider present-day Venezuela. Chavez is a product of massive inequality - too much poverty alongside the wealth of the few.

Ironically, Bush-style tax cuts to the wealthy mirror those that were done in the 1920's - if you transfer too much wealth up the chain, there is no hope left, let alone 'consumer confidence'  at the bottom. People find hope elsewhere, and that is not always good for democracy, and certainly not for capitalism.

 Wouldn't it be the ultimate irony if the Russia and China end up more free market capitalist than the U.S.?  That is the way things are headed with frightening rapidity right now.

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