2300 Smackers

We’re talking stimulus, right?? And we trust the American People, right?? Why not just send each American household $2,300 for each man, woman, and child there?? Let them decide how the $700 billion stimulus should be used.? What, you say, it should diminsh debt?? But our dear government is doing nothing of the kind.? They are borrowing massively from China and OPEC.

What’s that, you say?? That doesn’t help the banks?? Well, why help the banks unless it helps the people?? So why not help the people directly, and maybe it will help the banks.? You believe in the free market, which means individual choice, right?

Sigh.? Our government believes nothing like this.? They intervene to protect their patrons, the financial institutions, while dissing the taxpayers, and that is how it goes.

7 thoughts on “2300 Smackers

  1. Either way it is bread and circuses. They are flirting with disaster, a bailout may only delay the inevitable. Maybe it would be better to just dive straight into the worst economic crises in history rather make it last 2 decades, which is what a I fear a bailout will do. And the changes in policy will stunt our future growth, e.g. the conversion of Goldman to a commercial bank or whatever.

  2. Call it $2300 per household, or $700B for the financials, it still stinks. The issue with $2300, is the question of how long will it last? Are we to assume that a shorter influx of cash would be suffice to get us out of this rut? I know many families that would burn through the cash quickly just payind DOWN some debt, I didn?t say ALL, just a few payments. Then what? We?re still broke. We need to address to ROOT of our issues, and whether we can label what it is exactly it needs to be known, and publicizes for the reason for our downfall. Anyone could easily say it was: President Bush, Paulson, Bernanke, Housing Lenders, Credit Agencies, War in Iraq.. and the list goes on. The fact is it?s a combination of all these factors combined that has led us to where we are. Did you know that at the end of August our traded deficit stood at an approximate cumulative U.S.$6.9 trillion, increasing at a rate of approximately U.S.$60 billion each month) Further Insight That?s right almost SEVEN TRILL .. I can?t even wrap my mind around that number. I say we reexamine our roots and add some transparency to this ?bailout?, keep investors in the light, and slowly rebuild a positive market sentiment.

  3. David, I think you need a refresher on your CFA studies. Dropping $2300 from a helicopter to each household is *extremely inflationary* if it isn’t accompanied by an increase in productivity. You HAVE TO either attach strings to what it can be invested in/spent on, OR have the government get a residual interest in the effects of that money — some kind of equity stake in households.

    That latter point is unworkable for households, but it is very feasible for corporate entities. The government should get warrants in the firm in exchange for accepting bad assets. As long as you’re considering suspending fair-value accounting, let’s do a bit of creative accounting and let the new government equity stakes count toward bank capital. It can be legislated as long-term capital that the banks can buy back in the future.

    All this said, I am a libertarian and oppose any bailouts. Paulson and Bernanke were right on LEH, and shoulda let AIG fail, too. FNM’s, FRE’s WM’s and LEH’s biggest mistakes were that they were too open with regulators and the markets about their difficulties, so the smart money could get out.

  4. Giving $2300 dollars to every person in America sounds like a terrible idea. Now, I’m not sure how great an idea the bailout is, but the bailout is more direct as it focuses funds on a specific problem. I get the feeling a large percentage of Americans would put a rebate towards discretionary spending (e.g. New TVs, cellphones, video games, other shit that they don’t really need) helping the economy in the short run, but ignoring long term problems. I guess I’m somewhat of a pessimist, but I don’t trust most Americans to use a rebate wisely…I’d rather try my luck with congress.

  5. “I guess I?m somewhat of a pessimist, but I don?t trust most Americans to use a rebate wisely?I?d rather try my luck with congress.”

    I think the definition of optimism is trusting congress to get it right.

Comments are closed.

Theme: Overlay by Kaira