Another (government) Plan to Destroy the Economy???

[two4theroad]

Another Plan to Destroy the Economy


I thought this was a good article and ya'll might enjoy it. It seems the consensus is that government intervention in the economy ain't what its cracked up to be by some. The government should not interfere in a free market economy. They are not very good at it.
I personally think that the idgets that borrowed money they couldn't pay back should take the loss, not the entire economy. Also the greedy @*&%$'s that made the irresponsible loans should take their medicine, write them off and go directly to JAIL!

Whew, I feel better now.
2fer

[RockOn]

Double Ditto

[al_bundy]

the way it works is in good times the bankers cry free market when the government tries to regulate them. they say the free market works and any regulation will result in huge losses and the economy will suffer blah blah blah

every 10 years or so when half of the bankers' loans go bad they run to the government for a bailout and cry that if they don't get one the economy will suffer

[chinaco]

Not sure if it will play the way it was state in the article...

But I am not too happy about paying for this as a tax payer.

But if we are going to do it.. hey let's go all the way and spend a few million gov't dollars to prosecute, ruin, and send the perpetrators (Leaders of the institutions involved) of this fraud to federal prison for 25 years and make them disgorge and fine them... strip them of everything including their freedom.

[ziggy29]

Quote:

Originally Posted by al_bundy the way it works is in good times the bankers cry free market when the government tries to regulate them. they say the free market works and any regulation will result in huge losses and the economy will suffer blah blah blah every 10 years or so when half of the bankers' loans go bad they run to the government for a bailout and cry that if they don't get one the economy will suffer

Yep. Privatize profits, socialize the losses. Such a deal. Where can I sign up?

[Gumby]

Why is it dirty no good socialism when government money is used to help out Joe Sixpack who can't pay his mortgage, but not when the government bails out the investment bankers?

[UncleHoney]

If Joe 6 Pack goes down the drain, it's only one beer drinker. If the bank goes down the drain, the breweries may go with it and then the Feds would have a real revolt on their hands.

[dex]

In order to reverse the excesses of a freemarket requires pain by those who partook - i.e. lenders, barrowers, and market makers in the mortgage crisis.

There was a great deal of pain in the late '70s and early 80's (81) - high interest rates and high unemployment due to the guns and butter policies of the Johnston admin. After the pain a great expansion and revitalization of the US economy ocurred. There really isn't a substitute for this pain that I know about.

We do not not know what the downside is to these "solutions". I think we are just prolonging the inevitable and sowing the seeds to greater pain.

[chinaco]

Quote:

Originally Posted by Gumby Why is it dirty no good socialism when government money is used to help out Joe Sixpack who can't pay his mortgage, but not when the government bails out the investment bankers?

I am not too happy about bailing out the institutions. But it might be necessary to stabilize the financial system in the US.

The problem with J6P is that there is a small group of people who get caught in the cracks through bad luck... they try and things just don't work out. It is sad and if there was a practical way to separate those people out... I would not have a big problem with providing temporary help (those who did not overextend, work, lost their job, and are scrambling to go back to work). But it is not practical.

The majority of the people out there just have poor financial sense and take risk or think they can borrow endlessly. Bailing J6P or any other individual out would just provide incentive to continue making bad decisions because there would be no consequence.

As far as the institutions. I would like to see the senior management go to prison, disgorge, and be ruined. No amount of prison time is too much.

[ladelfina]

There are a couple of levels, though.. one is the notion of 'bailouts' or bridge loans to particular entities.. and it can be debated how 'fair', valuable that is, etc.

More insidious is the issue of low-interest-rate 'stimulus' which devalues the dollar and this hurts everyone. It's just less visible the "money" moving out of your pocket.

Charlemagne | Don't play politics with the euro | Economist.com

Quote:

IN THE heart of the Money Museum, a shrine to economic rigour in the grounds of the Bundesbank in Frankfurt, a large machine allows visitors to see what would happen if French populists took control of Europe's single currency. In truth, the simulator is not labelled in quite that way—museum-goers are merely invited to grab a lever, and choose how much money to supply to a slowing economy. But for anyone seduced by French complaints over an overvalued euro, and the need for the European Central Bank (ECB) to concentrate more on pursuing growth, the lesson is plain. If you ignore the post-1945 German focus on fighting inflation and pour in easy money, then disaster follows. The machine shows prices running out of control, warning lights come on and the game ends. “Sorry, but you've failed,” reads an illuminated rebuke. “Go back and review the basics of money again.” The real-life costs are spelled out, a few metres away, by sombre displays and newsreels describing the miseries of currency instability. ... French complaints about the strength of the single currency have been rumbling for some time, as the euro has climbed in value against the dollar and Asian currencies. They became louder than ever when the currency recently broke through what a French minister called the “psychological” barrier of $1.50 to the euro. But what precisely do the French want? It is unclear, given that their comments are mostly couched in code. French business leaders have asked the EU to “wake up”. In an interview with Le Monde, Dominique Strauss-Kahn, a former finance minister who runs the International Monetary Fund, said the euro was overvalued and blamed the “excessive power” of the ECB. On the one hand, Mr Strauss-Kahn said, the ECB had done well in controlling inflation (its mandate, to focus on medium-term price stability, was inherited from the Bundesbank). On the other, he said, the ECB lacked a “political” counterbalance in the form of a “finance minister for Europe” to promote growth. President Nicolas Sarkozy has been attacking the strong euro for months, saying that the currency should be put “at the service” of growth and jobs. Yet he also insists that he does not question the independence of the ECB. More recently, he has preferred to hint at dark dealing by America and other rivals with weaker currencies, saying that European industry must not be “penalised” out of existence by “monetary dumping”. The euro's strength was debated at this week's meeting of the “Eurogroup”, the club that brings together euro-area finance ministers with the ECB head, Jean-Claude Trichet, and Joaquín Almunia from the European Commission. France was clearly “hoping for a depreciation of the euro”, comments one minister. But he adds that “what France says outside is a lot stronger than what they say inside.” Still, there are deep differences of opinion. Germany pulled off an export boom last year, despite the strong euro. Other countries whose trade is mostly within the euro area point to the inflation-controlling benefits of a strong currency, when it comes to buying imports and above all oil (which is priced in dollars). ... .