Harvard Economist Explains Why Bailout is Bad for Economy

sponger

Talk of Armageddon, however, is ridiculous scare-mongering. If financial institutions cannot make productive loans, a profit opportunity exists for someone else. This might not happen instantly, but it will happen

Sludge Factory

sponger wrote:

Talk of Armageddon, however, is ridiculous scare-mongering. If financial institutions cannot make productive loans, a profit opportunity exists for someone else. This might not happen instantly, but it will happen

I think that was a good explanation of things and I'd have to agree with him that this is something the taxpayer should not be burdened with.

mammasan

I couldn't agree more.

Sludge Factory

I would like to add that I have seen several news articles describing how lawmakers are scrambling to urgently create changes so the bill can pass. In my opinion the whole reason the bill was so soundly opposed by normal people (who thankfully let their representatives know) was the whole bailout of Wall St. premise. They can change the fucker all they want but it's intended goal will still be to bail out Wall St. Perhaps they need to pull their heads out and realize that the majority of people out there really don't want Wall St. to be bailed out in this fashion.

It bothers me that there are people such as the President saying that consequences will grow worse each day if Congress does not act. Open your fucking eyes, man; Congress did act. Their action was one of opposing the passage of this monster. That was action! Stop calling for action when it has already happened!

Other comments that bother me are from the fucktard who is named Mitch McConnel of Kentucky. Saying things such as "...it is time for all lawmakers to "act like grown-ups" and get this done for the people."

Well, I think if you ask most of the people they dont' want this done for them. I don't know, maybe they are meaning something else with their words but that is how I am interpreting them.

eekamouse

This pretty much sums up why the bailout deal is fail:

Further, the current credit freeze is likely due to Wall Street's hope of a bailout; bankers will not sell their lousy assets for 20 cents on the dollar if the government might pay 30, 50, or 80 cents.

The costs of the bailout, moreover, are almost certainly being understated. The administration's claim is that many mortgage assets are merely illiquid, not truly worthless, implying taxpayers will recoup much of their $700 billion.

If these assets are worth something, however, private parties should want to buy them, and they would do so if the owners would accept fair market value. Far more likely is that current owners have brushed under the rug how little their assets are worth.