Taxpayer Commitment = $9.7 Trillion

UNTflyer · February 9, 2009

Feb. 9 (Bloomberg) -- The stimulus package the U.S. Congress is completing would raise the government’s commitment to solving the financial crisis to $9.7 trillion, enough to pay off more than 90 percent of the nation’s home mortgages.

The Federal Reserve, Treasury Department and Federal Deposit Insurance Corporation have lent or spent almost $3 trillion over the past two years and pledged up to $5.7 trillion more. The Senate is to vote this week on an economic-stimulus measure of at least $780 billion. It would need to be reconciled with an $819 billion plan the House approved last month.

Only the stimulus bill to be approved this week, the $700 billion Troubled Asset Relief Program passed four months ago and $168 billion in tax cuts and rebates enacted in 2008 have been voted on by lawmakers. The remaining $8 trillion is in lending programs and guarantees, almost all under the Fed and FDIC. Recipients’ names have not been disclosed.

KRAM1 · February 9, 2009

Quit calling it a STIMULUS PACKAGE...it is a "TAX AND SPEND" package plain and simple. As soon as people realize that it is in NO WAY a stimulus package the better off they will be and the worse that this package of PORK will look to everyone. If those "two ladies from Maine" and Mr. Spector would stop being so "wishy-washy" this thing may never see the light of day in the Senate. But, alas, some form of this BACON BILL will get passed. Too bad for the country and the American people. Always interesting how some folks think you can "spend your way" out of an economic crisis. Seems FDR (and Hoover to some extent) felt the same way, and their little "spening" programs sent this nation into the deepest depression in history and 25% unemployment (and that 25% is at a time when most wives did not work...think about that a little in today's terms).

Quoner · February 9, 2009

Quit calling it a STIMULUS PACKAGE...it is a "TAX AND SPEND" package plain and simple. As soon as people realize that it is in NO WAY a stimulus package the better off they will be and the worse that this package of PORK will look to everyone. If those "two ladies from Maine" and Mr. Spector would stop being so "wishy-washy" this thing may never see the light of day in the Senate. But, alas, some form of this BACON BILL will get passed. Too bad for the country and the American people. Always interesting how some folks think you can "spend your way" out of an economic crisis. Seems FDR (and Hoover to some extent) felt the same way, and their little "spening" programs sent this nation into the deepest depression in history and 25% unemployment (and that 25% is at a time when most wives did not work...think about that a little in today's terms).

I think the loose ends just need to be tightened up. Adding these tight ends to the program might make the package work better and be more efficient at getting America back on track. The only question is whether or not Obama would cast his own pride and possible arrogance aside to do what might work best.

Edited February 9, 2009 by Quoner

KRAM1 · February 9, 2009

Quoner...if it were only in me to correct your posting errors. Oh, the bait is out there, but, no I will not take the hook! :lol: :ph34r:

Quoner · February 9, 2009

Quoner...if it were only in me to correct your posting errors. Oh, the bait is out there, but, no I will not take the hook!

If only... that one mistyped word might be the first step toward you correcting 1000s of mistakes per day.

The Fake Lonnie Finch · February 9, 2009

Look, neither party has the balls to solve this thing. Neither does anybody on the current finance "team" cobbled together by Obama outside of maybe Paul Volcker, who will be ignored by the Blackberry-wielding class of Ivy League f*ck-ups who pass for the inteligensia these days.

The tough medicine is that interest rates must be raised. But, no one will do it. Instead, as they have been since 1992, interest continue to be held artificially low by crass and cowardly politicians whose answer will always be to throw more money at the "problem."

Well, the problem is really simple: easy money is what led to a false economic boom that began in late 1992 and went through the fall of 2007. It's what caused the whole problem in the first place!

Money was handed out to people who couldn't handle it. Underwriting standards were thrown out the window on a variety of high purchase loans. The loans were then packaged into securities by very wise people with degrees from Ivy League and Big Ten business schools.

Now that it's tanked, no one will just say, "Hey, look, we f'd up. You do actually have to let the market drive the interest rates. And, you have to underwrite loans."

The last idiot - Bush - simply tossed money at the problem. Predictably, it didn't work. The current idiot - Obama, seeing how futile Bush's money-orgy was - proposes that we walk down the same path.

Obama, though, ups the ante of idiocy by pretending that businesses can be saddled with more employment/labor lawsuits and stronger unions. Besides adding that can of gasoline to the fire, he takes the economically suicidal position that credit scores be ignored.

All of that would seem to be stupid enough. But, wait...there's more! To even further screw up any attempt at righting the ship of underwriting and credit standards, he supports legislation that would have judges deciding what a mortgage says instead of the document originally agreed to itself.

Bush was lost when the false economy finally broke down. Obama is Bush x 10 when it comes to misunderstanding the economic problems.

But, McCain people shouldn't gloat. That idiot also voted for the "bailout" package and will vote for the latest boondoggle once they all get together, have a few drinks, and remember that their pensions are guaranteed by the American taxpayer no matter how badly they f*ck up the country.

No amount of history can deter the current idiocy occurring now in Washington, D.C. They will completely tie the invisible hand that is at work in a capitalistic society. At that point, we'll simply be Mexico with only a slightly larger middle class and a bigger, more proven military.

Edited February 9, 2009 by The Fake Lonnie Finch

Quoner · February 9, 2009

Look, neither party has the balls to solve this thing. Neither does anybody on the current finance "team" cobbled together by Obama outside of maybe Paul Volcker, who will be ignored by the Blackberry-wielding class of Ivy League f*ck-ups who pass for the inteligensia these days.
The tough medicine is that interest rates must be raised. But, no one will do it. Instead, as they have been since 1992, interest continue to be held artificially low by crass and cowardly politicians whose answer will always be to throw more money at the "problem."
Well, the problem is really simple: easy money is what led to a false economic boom that began in late 1992 and went through the fall of 2007. It's what caused the whole problem in the first place!
Money was handed out to people who couldn't handle it. Underwriting standards were thrown out the window on a variety of high purchase loans. The loans were then packaged into securities by very wise people with degrees from Ivy League and Big Ten business schools.
Now that it's tanked, no one will just say, "Hey, look, we f'd up. You do actually have to let the market drive the interest rates. And, you have to underwrite loans."
The last idiot - Bush - simply tossed money at the problem. Predictably, it didn't work. The current idiot - Obama, seeing how futile Bush's money-orgy was - proposes that we walk down the same path.
Obama, though, ups the ante of idiocy by pretending that businesses can be saddled with more employment/labor lawsuits and stronger unions. Besides adding that can of gasoline to the fire, he takes the economically suicidal position that credit scores be ignored.
All of that would seem to be stupid enough. But, wait...there's more! To even further screw up any attempt at righting the ship of underwriting and credit standards, he supports legislation that would have judges deciding what a mortgage says instead of the document originally agreed to itself.
Bush was lost when the false economy finally broke down. Obama is Bush x 10 when it comes to misunderstanding the economic problems.
But, McCain people shouldn't gloat. That idiot also voted for the "bailout" package and will vote for the latest boondoggle once they all get together, have a few drinks, and remember that their pensions are guaranteed by the American taxpayer no matter how badly they f*ck up the country.
No amount of history can deter the current idiocy occurring now in Washington, D.C. They will completely tie the invisible hand that is at work in a capitalistic society. At that point, we'll simply be Mexico with only a slightly larger middle class and a bigger, more proven military.

Typical TFLF B.S. - long-winded as ever. We've heard it a hundred times buddy - get a new bit.

UNTflyer · February 9, 2009

The best idea I have heard so far is a "bad bank".

Establish a federal bank to purchase all of the sub-prime loans in default from the corporate banks. This would free up capital for the banks to return to financing business and mortgages. The people in default will now have to pay the government. The gov't can then do what they want with the loans... if they want to freeze foreclosures for 6 months, that's their business. If they foreclose, they can sit on the property for 5 years, wait for prices to return, then sell it on the market at a profit for the taxpayers.

It's certainly a lot cheaper than $9 trillion, and will actually have the effect of creating jobs by unfreezing the credit markets. Throw in some regulation regarding future mortgage practices, and we're good.

KingDL1 · February 9, 2009

I read an article maybe two or three years ago that stated the ethanol program was causing some crazy inflation in that the building blocks of the the economy. The food level, that wholesale flour was up 400%, barley or hops were up 1600%, and most all other crops were hit hard by ethanol. This lead to high feed costs with livestock, more cost to fertilize because corn is heavily subsidized and crops were not being rotated which means more fertilizer. Not even going into the fertilizer run off and other environmental problems. But it was the projection that ethanol program being in direct competition with agriculture crops, plus the rise in fuel cost would undoubted cause a major recession. Ethanol should not be mandated in gas anyway it is bad for cars and everything else, maybe just have straight ethanol pumps if they find something better to make it from so a person has the choice. I be happier if they spent the subsidies on algae, wind and ocean alternatives.

Now my economics teacher back my freshman year at UNT said the same thing, just not ethanol. Prolonged inflation with food and energy would always result in a fall out. People will spend there money to eat, then worry about their other bills.

I just wonder why it is not being addressed.

Edited February 9, 2009 by KingDL1

yyz28 · February 9, 2009

While I don't think it is a good idea, let's pretend we DID actually use that money for that purpose and how 90% of the home owner poplulation now has an extra couple of grand (average) to spend every month right now...

...Yet again, another way while giving the money DIRECTLY TO THE PEOPLE would be more effective than government spending.

Censored by Laurie · February 9, 2009

The best idea I have heard so far is a "bad bank".
Establish a federal bank to purchase all of the sub-prime loans in default from the corporate banks. This would free up capital for the banks to return to financing business and mortgages. The people in default will now have to pay the government. The gov't can then do what they want with the loans... if they want to freeze foreclosures for 6 months, that's their business. If they foreclose, they can sit on the property for 5 years, wait for prices to return, then sell it on the market at a profit for the taxpayers.
It's certainly a lot cheaper than $9 trillion, and will actually have the effect of creating jobs by unfreezing the credit markets. Throw in some regulation regarding future mortgage practices, and we're good.

We...agree...on...something...involving...economics.

The Fake Lonnie Finch · February 9, 2009

Ethanol should not be mandated in gas anyway it is bad for cars and everything else, maybe just have straight ethanol pumps if they find something better to make it from so a person has the choice. I be happier if they spent the subsidies on algae, wind and ocean alternatives.
Now my economics teacher back my freshman year at UNT said the same thing, just not ethanol. Prolonged inflation with food and energy would always result in a fall out. People will spend there money to eat, then worry about their other bills.
I just wonder why it is not being addressed.

Two things here: one, ethanol; two politicians addressing problems.

Folks, the red flags should have gone up immediately when the whole ethanol thing took off. The example everyone cited was Brazil. People, when anything Brazil does becomes a basis for a major part of your economy, you know the politicians have long ago checked reality at the door.

Second, to address a problem, the politicians would first have to admit that there's a problem that they themselves caused! How many politicans can you think of who will go back to their constituents and say, "Hey, man, look...I pushed for that ethanol thing and it help f*ck things up. Vote for me in 2010 and you'll get (two or six) more years of this fine example of my great work. Also, you're decision to re-elect me keeps me closer geographically to my mistress."

meangreendork · February 10, 2009

I read an article maybe two or three years ago that stated the ethanol program was causing some crazy inflation in that the building blocks of the the economy. The food level, that wholesale flour was up 400%, barley or hops were up 1600%, and most all other crops were hit hard by ethanol.

Yeah, that's pretty spot-on. The mandated ethanol program as well as the use of corn-based ethanol (tying up foodcrops) really did hit gas prices and therefore, everything else. Subsidiaries and the rest didn't much help either. Seriously, the whole giant fiasco had a good heart in it, but it was sooo badly managed. If they'd waited for switchgrass ethanol to mature, then the corn-based stuff would be pointless. That would mean more crops freed up for the real purpose, which is for food.

H-towngreen · February 10, 2009

...Yet again, another way while giving the money DIRECTLY TO THE PEOPLE would be more effective than government spending.

Ding Ding Ding

EagleD · February 10, 2009

Ding Ding Ding

I like the idea of providing that money to people to pay mortgages and debt. The banks will eventually get the money, but consumers benefit by paying off debt.

H-towngreen · February 10, 2009

I like the idea of providing that money to people to pay mortgages and debt. The banks will eventually get the money, but consumers benefit by paying off debt.

Wouldn't it be great if they decided to say hey how about we just go ahead and give every person over the age of say 18, $10,000. Would we even still at that point be spending anywhere near 9.3 trillion? People spend, business get money, goes to the banks...etc...etc.

I'm sure there are problems with this theory...can someone smarter than I name them please.

UNTflyer · February 10, 2009

Wouldn't it be great if they decided to say hey how about we just go ahead and give every person over the age of say 18, $10,000. Would we even still at that point be spending anywhere near 9.3 trillion? People spend, business get money, goes to the banks...etc...etc.
I'm sure there are problems with this theory...can someone smarter than I name them please.

Inflation.

meangreendork · February 10, 2009

Inflation.

Pretty much. I don't know how much, but there would be some. Admittedly, not all of that money would be spent. Personally, I'd save a big chunk of that and then probably CD the rest of it.

However, I'd think that the sudden flush of money to banks from the government would also cause inflation. I'd say the money being given to the people would at least cause a momentary jump in activity that isn't in the form of loans (that are partly to blame anyway).

UNTflyer · February 10, 2009

I'd buy 10 oz. of gold.

UNTflyer · February 10, 2009

http://www.cato.org/special/stimulus09/cato_stimulus.pdf

meangreendork · February 10, 2009

I'd buy 10 oz. of gold.

Then sell it to that extremely shady gold purchasing company that's suddenly had a large advertising budget and then lose a large percentage of your money in the process. Do it. It's awesome.

UNTflyer · February 10, 2009

Then sell it to that extremely shady gold purchasing company that's suddenly had a large advertising budget and then lose a large percentage of your money in the process. Do it. It's awesome.

The inflation that would be caused by giving everybody in America $10k would probably drive the price to $5000 an oz. in just a few years.

I would quadruple my free money, so HA!

Edited February 10, 2009 by UNTflyer

UNTFan23 · February 10, 2009

Inflation.

I'd be using that debt created by our government to pay off the debt created by me. Seems like an even trade to me.

KRAM1 · February 10, 2009

If you have not seen this clip from the ex-Senator Thompson it is worth viewing. It is a bit long (7 min. or so) and was recorded in december of 2008, but it is still very worthwhile to view if you have not done so. Take a look if you have time.

http://ssomail.charter.net/do/redirect?url...2Fgoodnewa.html

KRAM1 · February 10, 2009

OK, sorry...cannot get the link to post properly....MY BAD! If you tried you probably got a link to Charter...it is not the correct link. Oh, well, it was a bit long anyway...focused on how the gov't tinks that you can spend your way out of a problem that you got into by spending too much in the first place. Pretty funny! But, that's "your government at work". Never will so many owe so much (taxes) to so few!