How confident are you that the financial bailout package passed by Congress will ease the economic crisis?

I hope all will remember come election night those who are slamming this bill down our throats. People want a change and yet here we are same old Washington politics.

Both of the morons running for office voted for it. We are in deep doo doo

In the states where recall is allowed, recall those who voted for this stupid bill. Vote all who voted for this bill, out of office. The Citizens said No and congress said to blazes with you, we will do as our masters on Wall Street want.

And dear Nancy, no citizen will benefit from this stupid bail out. Only Wall Street will.

remember, vote all those who voted for this bill, out of office.

Let the market correct itself gradually.   Fundamentally I believe in the healthy outcomes of free market, free economy  , with minimum, reasonable intervention of the government which should punish/ monitor the greedy, manipulative wall street people, greedy lenders and also  irresponsible, reckless  spenders/consumers/borrowers.

My family and I are sick and tired of those old Washington politics which have dragged our country down !  Pls. get above the partisanship and  focus on the welfare /the goodness of our nation as our forefathers had done for us .  God bless USA.

People seem to forget that public opinion turned after Monday and went the other way towards passage. Credit is the issue and when Main Street and Side Street USA chimed in Congress listened. People wanted their pay checks in which many companies borrow to cover payrolls weekly. Small businesses would fail no loans period, credit was drying up. This was the future so yell and scream, but they've gotten the middle class where they want us. Whether there was a credit crunch or it was blackmail did anyone want to find out and not get paid next week? The answer is no.

Bob -

Who do you think engineered all that?   There was no good reason to deny credit to individuals or businesses that had excellent records for repayment and were otherwise financially sound. 

The banks are the ones who benefit from the bailout.  Isn't it possible that they refused to lend just to make things look worse than they are so that the bill would pass? 

Let's face it - they wanted our money, and they were going to do whatever was necessary to get it. 

As I stated whether we did have a credit crunch or not no one wanted to test it. Although your scenario is very logical I know folks were told by lending institutions that it didn't matter if you had a FICA credit score of 880 or 300 no money is being lent. Large dealerships here in Arizona closed down without notice because they couldn't get the money to buy inventory and their customers couldn't get loans to buy the vehicles. One was a national dealership called Heard Chevrolet.  Cars are  a major aspect of our economy and then the furniture and appliance industry and on and on. Now you also have to ask yourself why certain congress members changed their vote who have strong ideology on both sides of the political spectrum. After Monday and getting calls going the other way they really got scared. Why? Were they threatened? Coerced? or what. I believe some of them came to the reality that this was real and not wall street blackmail. Only time will tell. It always comes out in the end we will know if we were taken sometime in the future. But we do have 300 changes to the IRS tax code we will see in April and as far as the rest we will know in about 6 months to a year which is not very comforting.

   Simple fact of the matter this crisis was invented and sprung on us using something called credit default swaps by the banks and lending institutions,

My short answer cites the following aspects of our economic situation:

1. (1) There's an economic imbalance reflected in our balance of payments and insignificant foreign reserves. Put simply, we have been consuming more than we have been producing.  We have also not been putting any new technologies on the market so we have been facing increasing pressure from foreign competitors with lower labor costs, and less respect for intellectual property rights.
2. (2) There's a monetary imbalance resulting from the above, which means we have been paying our overseas bills later and later and in smaller and smaller percentages of our foreign debt. Our creditors are not our friends and will eventually get scared of a default. This imbalance has been hidden from us because of the pressure to increase the leverage for loans, especially in the housing market. Loans increase the money supply without doing anything about the national debt, at home and abroad. Eight years of deregulation allowed corporations in the system to develop irregularities which eventually affected the whole monetary system.
3. (3) Corporate ineptness: Freed of regulation, the investment banks refused to look at the big picture, or the shaky basis on which these over-leveraged loans, (not just housing), were based.  Instead they devised mechanisms for passing the risk on to other speculators, at home and abroad.
4. (4) Personal Misbehavior: People at the very top knew that it couldn't last, but the short term rewards and the insurance of a golden parachute if things went wrong took on the nature of an "Indecent Proposal," too much money to turn down, no matter what? The misbehavior of individuals was therefore systemic. The indiscipline in the banking system spread to the people working on commission who were able to organize mortgages which they knew their clients couldn't afford.

From the above analysis we can see that the Treasury plan only takes care of the short term monetary problem as well as attempting to remove a token amount of the personal and corporate misbehavior. It does nothing however to take care of the underlying economic problem of insufficient production either for exports or for satisfying the home  market. What needs to be done is legislation which makes it more difficult to foreclose on mortgage defaulter and encourages them instead to make an accommodation which temporarily suspends the mortgage and places the mortgagee in hands of a bank appointed management firm as renters with an option to buy under new terms. This would stop the rot in the housing market.

My analysis also indicates that fundamental problem which has been (almost literally) papered over by the financial sleight of hand as seen in the creation of toxic mortgage backed securities goes a lot deeper than banking and investment irregularities. American pedagogy has failed to notice two closely linked economic dynamics that threaten our economic hegemony as a nation. (a) One is the hardening of the science of detailed economic development  closely controlled and funded by centralized government based planning. (b) The other is the application of these methodologies to more and  larger nations, including the nations of India and China which are both several times larger than our nation. This gives them a limitless market at home as well as a limitless supply of cheap labor some of which is educated to the highest levels. 

We will never be  out of the economic woods until we adopt development plans that are somewhat similar to those widely adopted by our competitors, and equally detailed.

People act like these banks are made of glass.  Oh.... the poor banks.  Oh.... poor us who depend on them, so we better enable their misconduct or we'll all be sorry... Let's put more crack on the table, and watch the economy get high again.  It won't need another fix... or another fix... or another fix... or another fix...

We should all feel bad for the banks. They aren't making money. After all how can you turn a profit on credit transactions you if only get 3-5% from every transaction made, occassionally under the name of privacy protection youn slip in a Little fine print stating your interest rate will rise to 22.9% if you don't call the bank and say you don't want it to be 22.9%. Then you login at 4pm on the day your payment is due, make a payment, and they post it 24hours later and charge you a late fee. You only owe $8 and get a $40 late fee even though your not late. try to stop payment and all the vendor has to do is reply and it is reinstated. Then the have loans that charge originations fees and make profit of each component used to secure the loan (such as $300 appraisal fee, $200 fee if you dont use direct deposit.) and a mere $2-4 charge on debit card transactions on non account holders. Of course there are the account fees per month too! $5 a month to do online bill pay, 9.99 for a checking account, a fee on your account for having a low balance, over limit fee, withdrawal fee, teller fee. How on earth could they survive. Oh the horror.

Sorry its bad grammar and jumbled together but I just had to explain to an Obama supporter how Clinton signed the Gramm-Leach-Bliley Act which deregulated banks right before he left office. Sometimes the mind numbing effects of talking to liberal Seattliltes takes awhile to clear out.

... and yet, in the face of this authoritative advice, Congress passes the polished turd. It's time for another "Boston Tea Party" of some sort. They completely defied the will of the people on this one. Is there enough prison space for everyone if we all refused to pay our taxes?

Sue  You make sense!!

This financial mess that we are facing did not occur over night.

WHY must it be hastily voted on??

Senator Musgrove (R-Miss)  is a brave Hero and Patriot.  He said to think this over, get all the facts, let  We The People  in on it.

Congress reps.  Pelosi and Feinstein  refuse to listen to the little people.

After all, they are more evolved. They have progressed at a better rate and are just sooo  much darn smarter than the 93% of the people who say. . Wait.  Let us have a dialog before we place this much money into  who knows whose pocket!! 

YOU DO NOT FIX A LEAKY PEN BY BUYING EXPENSIVE GLOVES!!!

W. Buffett is greedy when others panic. His own words. How much of these depressed stocks, bank assets(whatever you want to call  it) has he gobbled up. Or sharks just like him.  And now  the sharks want the tax payers to make the crap they scooped up  turn into gold.!!  That is what this bail out is all about!!  GREAT DEAL FOR THE FEW!!

I am not an economist, explain to me ... The Swiss Bank says it dumped the American garbage from its assets.  What  garbage? Where did they dump it? How do they profit by selling low? Who now has it? Why do they have it or want it?   Somehow I feel that          WE THE PEOPLE   will end up paying for it.  How does this work??  Where does the $700 Billion figure come from and why does it feel that it will cost many times that amount?!!

I feel like the American people are being pressured into buying the smoldering PINTO !!

It will blaze up even higher and explode in our faces.  And all the while the slick, pushy con -man of a salesman buys a yacht with our money. 

LAUGHING ALL THE WAY TO THE BANK!!  SWISS BANK, that is.

I am adamantly against the bailout,  I don't want to use our huge tax money to rescue those greedy, high-risk investors/ consumers. 

The professors never answered the credit issue. That is why this bill passed. In the end result people whose jobs depend on their employer getting credit and people whose companies borrow weekly payrolls could get paid. Without credit the whole system would collapse. Now whether there was really a credit crunch or wall street blackmailing the middle class we will never know, but no reasonable person wanted to find out. The tax breaks for the American people look good though and over 300 changes in the IRS tax code we will see in April as for anything else you won't see it for 6 months to a year if this worked or failed; if we got screwed or they were telling the truth. So be patient and all of us need to try and live within our means and cut those credit cards in half and only keep two.

If your job depends on your boss being able to borrow enough money to cover payroll, then you should be looking for another job because the company you're working for is NOT solvent and very likely to fail. 

What ever happened to the basic principles of good business practice?   You don't hire workers you can't afford to pay.   You don't expand/grow your business unless the volume and profits justify it - and even then you reinvest those profits to fund the expansion rather than borrowing money.   And you don't borrow money to pay your basic operating expenses just so you can appear to be making higher profits. 

There is a reason we are in this mess, and it's not just because the housing bubble burst.  It's because the whole damn thing was a house of cards, built on a stack of loan documents and "virtual" money that never really existed. 

One good breeze and it all comes crashing down. 

Payroll borrowing has been going on for years by more companies than you can shake a stick at, and they are not just small businesses, but some of the bigger ones in retailing and believe it or not Banking. For some reason this is a standard business practice in this country and you call it virtual money I call it chinese money but its all the same. Credit is obtaining money you don't have and every American uses it unless they are Warren Buffet. We live above out means and as you stated (one good breeze it all comes crashing down) and that is what has happened the last couple of weeks. Banks won't give credit to other banks and then Banks won't give money to businesses or to us the consumer. No loans in our society is disastrous. So Maureen and everyone else out there if you apply for a job see if they borrow to make payroll and try to make your employment decision on that and you may not find a job.

No loans is NOT disasterous - just difficult.   It means that people will have to work hard and save for what they want - just like my grandparents had to do during the Great Depression while raising 8 children.  

It also means we will actually pay LESS for those things, because we will only pay the actual selling price - without having to pay interest on the money we borrowed to pay for it.  What good is it to buy something on "sale" when by the time you get the bill for it, you're paying more than the non-sale price due to the interest and fees on your credit card?  

We all need to face reality.  Credit IS "virtual money" because it's money we don't actually have.  We haven't earned it yet, and by the time we do, we will owe even more.  It's not worth it. 

So if that means that I won't have a job unless I'm willing to work for a company that borrows money to make their payroll, then I'd rather be unemployed.  Sooner or later, I will be anyway, because a company like that cannot afford to stay in business for long. 

But at least then the government can't steal my tax dollars to help Wall Street continue lending money to fools who don't have the patience or self-control to wait until they can afford something before they buy it. 

Maureen I could not agree with you more. I come from a thinking very similar to yours, my mom and dad paid everything in cash and survived the great depression they never had a credit card, did own a house, but the land was family farm land for generations so they built on the land. No mortgages, but paid taxes, back then you could still clear the land and use it resources. It was a cold place only cold running water and a fireplace for heat. I was born in 1925 4 years before the crash, but hard times was an everyday occurrence, but we all survived and then the war and after everyone wanted a better life and credit bcame so big that today we can't live without it as a nation. I now have a home no loans never fell in to the equity trap or even the reverse mortgage one, a car loan, taxes of course two credit cards with just a minimum credit line (zero balance) for the just in case scenario(when gas prices get to high) and pay all my monthly bills on time with a fix income. I get by without (thousands of $$$) ofcredit, now my grandson is in debt up to his ears and it doesn't faze him, I wouldn't be able to sleep nights if I owed what he does. Now bare with me he has a 6 figure job and is in debt. Talk about living above his means, but as I said it doesn't faze him a bit all his friends are in debt with mortgages in the high 700's car loans in the 50's and I am talking thousands of dollars. That is how the young Americans live and they think nothing of asking me for a twenty here and there and I am on a fix income. I went to long with this sorry but in the end credit is what makes the word go round and when banks refuse to lend to other banks because of liquidity in which they could not cover the accounts (checking and savings and CD's) on deposit that is why credit dried up and we have this mess and bank failures especially the small community banks that are depended on in rural America by the farmers and townspeople they were hurting bad and this bailout is to help them.  As I stated time will tell. Will rural America and Main Street benefit from this bail out or just greedy and corrupt Wall Street that  is the $700 Billion question??? 

Well Bob, as I said in another thread recently, it is the poor and people like us who will come through all this with the least scars.   We already know how to live within our means, and we've got less to lose to start with.

Maybe we should start a business training people like your grandson in a few basic principles of fiscal responsibility.   ;-)   Our first class should include the current and future Presidents, Paulson, Congress, and all those Wall Street CEOs.   

Thank you and I agree about my grandson. If possible the classroom would be full from my stand point for his generation has no fiscal responsibility. I know my daughter god bless her soul and my son in law tried to raise him the right way they really didn't spoil him and he worked his way through college. Nothing was given to him on a silver platter so to say. He use to be responsible, but when he hit thirty he went haywire. Live for today to hell with tomorrow. Well tomorrow is here and I have a roof over my head will he is my sleeplessness.

all economists

quick action during Lehmann debacle would have save us from this looming crisis.

just make sure that the CEO's dont benefit; but the shareholders should

after all , they will bail our the goverment interest and increase in stock value

will profit the govt and taxpayers - do a warren buffet on it.

while you at it start fining the CEO's who were negligent

substantail fines such as $50 million or at least their last years income.

The rush is going to cost all of us in the end. Washington needs to make sure the money becomes available to those who need it.

Any plan to purchase troubled assets, should involve only paying for the value of the asset at the time of the loan. Noadded value for interest. All homes facing foreclosure due to job loss should be on automatic hold.

I agree with Maureen for the most part. If you are borrowing to cover an annual retirement contirbution and the cash flow supports a quick reconcile then thats one thing. If you are borrowing to make payroll thats a problem. It might happen on occassion but many companies do not operate on this premise. Constantly borrowing is not good and a sign of poor management. And no bonuses should be paid until cash flow is positive with a month or two of revenue built up as a safety net. Lenders should forbid this partice and immediately call the loan if this is discovered.

Wow.  Since when are clothes and shoes a luxury.  I do feel for you.  Don't blame Wall Street, blame your elected representatives.  Wall Street makes no secret of the fact that they are in business to make money, Congress shouldn't be.

I think what was meant was "designer" clothes and shoes.  I know how desrtrse feels.   We also know how to live within our means at my house.   I own a total of 5 pairs of shoes - 1 set of sneakers, 1 pair of boots for bad weather, 1 pair of flats, 1 pair of dress shoes, and 1 pair of sandals.   I buy neutral colors to match any outfit (usually black or beige), and I wear them until they wear out. 

None of my clothes have designer lables.  All are wash and wear (no drycleaning bills), and most were purchased at Walmart or other discount stores.  I make them last by taking good care of them, and I try to buy things that can be mixed and matched, so that I can take 5 tops and 5 pairs of pants and turn it into at least 10 different outfits.

We don't have or want a credit card.  Everything we buy is cash or debited from our checking account.  If we don't have the money to pay for something, we don't get it until we've saved up for it.   We used to go out to eat once a month just for a treat, but right now we've cut that out of the budget to make up for the increased cost of gas.  We combine our errands to save gas, and cook economical meals that are still nutritious (stew is great - lots of veggies, and very filling - but still economical).

Our main expenditures are rent, utilities, car payment, and food.  Yet we are still just barely getting by (no money for savings).  We moved from NY to PA to save money, but with the increases in gas and utility costs, plus the related increases in the cost of food and basic necessities, we're still not any better off.

So even though we are doing everything right, we are still falling behind - and no one is bailing us out.  The stimulus money we got went directly to our car loan to reduce the principle, and we're hoping another will be issued so we can pay off more on the car - but now that the government has spent all this money to save Wall Street, the potential for another stimulus check is pretty slim.    After all - none of those rich bankers will be lobbying to help US out. 

I am disgusted with this country and it's so-called leaders.  It is time for change - and maybe another revolution.   I would never promote any kind of violence - but we certainly can and should organize protests on Washington with a demand that this law be rescinded and the money given to the American people - not Wall Street. 

I agree it is time for the taxpayers to organize and march on Washington.  It seems our representatives do not listen to our voices and voting them out of office is too late for this crisis.  We can remember who listened and vote accordingly at appropriate time.  In the meantime we have to live with their unwise decisions.  I'm reading many comments about living within our means and that is the lesson that should be taught to everyone. Of course, the banks and financial institutes would not earn as much if they didn't collect the high interest people pay on these credit cards and loans.  The greed seems to win out every time and our representatives allowed the greedy to win again.  What a sad state the United States of America has become.  So many people my age, 75 have worked so hard for so many years and now to have the years that should be comfortable starting to decline and worry about food, shelter and clothing being priced right out of our income.  I called and wrote each of my representatives, and heard from only one, and that pretty much was he would vote how he felt was best.  I too am totally disgusted with our leadership and do not see good choices in this election. 

I think the instructions said make it short

I did not mean designer clothes  M M, I meant just clothes, I would take walmart or target if I could afford it! Forget designer anything, I wouldnt' know it if I saw it anyway! I just mean clothes, shoes, a hair cut, I cannot afford any of these things, I only pay utility bills, gas, rent, school loans and food. that is it, nothing left!

Hi Don, I saw this on another blog. Thought is was interesting

I think I can comment for people outside the US as I am not a US citizen. The biggest problem for the US is the US. America is destroying itself, this has been going on for some years now, and all the western powers have been warning the US about this for almost 30 years. It does trouble us the Americans have a system that allows 50.01% of the people to speak for them all, and how easily corrupted this system is, we do laugh often at the idea that all that is needed to fix America is to invent a time machine and go back to the days when Elvis was King, and Caddies had tail fins, we also find it amusing that Americans think that the world and its economy is somehow dependent on the US and its ability to consume, and the way Americans think that if the share price drops in another country it has the same dire consequences there as it does in the US. The truth is, it does not, as stock markets are seen in a more esoteric way outside the US. Seeing the spectacular failure of the US military in the war on terror was ofcourse the final straw. Once America lost all respect for its ability to project its power around the world, and the dismantling of the US legal system by GW Bush, Geo-Political power began to shift. 

However your comments about the two presidential candidates are spot on, Everyone knows the world will be poorer (I dont mean $) for the loss of the USA as a player, but it is time to move on, we cant keep baby sitting the US and hoping it will come out of it's stupor, The very fact that one of the presidential candidates does present some hope, (Lucky for you Hilary was not there) means that the rest of the world also still hold out some hope of the US rejoining the world. He will have a very short time to prove that he is serious about these things though, if there is not radical improvement and a move to bring the US into line with international law, then things will............. The US can not save itself,  if the USA is around after 2017 it will only be because the rest of the world thought it was worth saving. Otherwise the World Bank will call in its debts and they are debts that the US can not pay. 

Well if you believe this about my country then you can leave it.  My country right or wrong!  What about the debt the US never collected on after WWII.  Only Sweden paid her debt to the US.  So I guess the US has baby sat Europe too long and the socialism rubbed off.  If America kept our individualism and strength of character and not worried about the social out cast and not allowed debt to be leveraged we would be all right. But we had to learn it from the europeans.

Sounds like Obama would make a great leader for your country.  Why don't you go back where you belong and take him and his wife with you!

Kim E:

Sounds like Obama would make a great leader for your country.  Please take him and his wife back to your country as soon as you can!  Maybe his Socialist policies can bankrupt your country like Obama and his Democrat pals have almost done to our country.

Rule #1: Do not buy, more than your income can pay.  (A serious problem for the US Government.) 

Same thing is happening here in Virginia.  I wrote Congressman Jim Moran, pleading that he vote NO on the bailout.  I was impressed by a quick response stating that it was in fact a bad idea making the American taxpayers pay for other's poor choices and that something this important should not be rushed. 

Unfortunately, any joy I had from that was soon doused when I learned that he ended up voting YES to the bailout.  Where is the integrity our elected officials are supposed to have?  I now refer to him simply as Congressman MORON...instead of Moran.