Twice in the Same Week!
1 hour ago
Monday, October 6, 2008
Who will save us from our own economy?
When the bailout was first rejected I was anything but surprised. "Big business" needed to be punished and a 700 billion dollar bailout is hardly a slap on the wrist. But now even with the bailout, the economy is still in shambles. The stock market plunged earlier today and the American economy is in such despair that our misfortune is translating into problems in markets overseas. European markets are beginning to feel the ripple effect of our economic instability. With or without the bailout the U.S. would have had immense obstacles to overcome and there is still much uncertainty regarding how effective the bailout will be in offering relief. Even with the billions of dollars that the bailout provides, experts say that close to 100 banks will still be forced to close within the next year. What we can conclude from this is that more needs to be done. The bailout cannot solve all of our economic problems. WE NEED A PLAN. Our economy is slowly falling into a downward spiral. Unless something is done to breathe life back into what is left of our economy, Americans will be forced to endure more foreclosures and unemployment and world markets will continue to suffer. So who will come to our rescue? The current state of the economy will certainly be a main topic in the upcoming debate. The candidate with the most convincing and stable plan to bring us out of this recession will undoubtedly pull ahead. How to win over the American public: promise to get them their homes and jobs back.
Subscribe to:
Post Comments (Atom)
9 comments:
i agree with sterling in that everyone just has to not panic. If everyone is panicking and whatnot, then it will merely create a huge chain reaction that spirals our economy into a pit that we're going to have to struggle out of in the future. People afraid of bank failures are rushing to banks to withdraw their money and the banks just do not have enough money on hand to give to all these people all at once. While this crisis may and probably was caused by he big banks acting irresponsibly, one must keep in mind that the people are huge contributors to the state of our economy as well. With so much pandemonium/panic going on in our economy/nation right now, it's not that surprising that our economy and the stock market is fluctuating so much at the moment...
We dont want to mimic the Great Depression and panic like crazy. It only made the economy worse. We need to trust the FDIC in our banks and not take everything out because they are all failing. And I bet the people who originally voted NO on the 1st bailout plan are pretty happy with that vote, since so far the economy isnt getting better. At least the votes were pretty much all over the board so one party cant be completely blaimed, even though we all know it was a mainly democratic position.
Why should the government save ailing businesses? It makes no sense to reward them for making poor decisions (although in truth they probably knew they would be bailed out if they lost, giving them incentive to take ridiculous risks).
Here's what the government should do: 1) Get rid of the Federal Reserve.
2) Gold standard, or something to eliminate the ridiculous practice of expanding the money supply
3) Cut spending, a lot. Iraq war and the war on drugs should be easier to cut. Other social programs should be cut too but this will be difficult (The great ponzi scheme known as social security).
4) In general less economic regulation.
We might be screwed anyway at this point.
I agree at least partially with what everyone has said. Our economy needs help. The bailout did little to nothing, and it was a bad idea. As bad as it sounds, I don't necessarily think that bailing these people out is the right answer. The people who can't pay their loans are the people who shouldn't have gotten them in the first place. Especially homeowners, many of them have not been in their homes very long and I think that maybe they should be foreclosed so that other people don't have to pay for thier mistake in taking a loan. On the other hand, it's hard to justify foreclosing people's homes or small businesses. Everyone is going to have to contribute to save the economy, who has to contribute what will be the issue in my mind.
I think its easy for some of us to say not to panic, but I don't think we are the same shoes as many other Americans in the country. Most of us live in a very prosperous area and are not drastically affected by the economic downturn. Many other Americans have a good reason to panic, and we do not know how effective the bailout plan is going to be.
Nick speaks the truth I mean most of us know very little about economic instability. If I had to move out of my house i would be beyond panicking right now. So when we consider how much pacience is required concerning the bailout, we should keep in mind how hard this situation is for the lower classes. None of us really know how horrible the economy is becuase life has been the same as it always has for us. We have to consider the needs of the entire nation.
Imagine that your friend comes to you with lots and lots of crap in his basement and wants you to buy it from him. The problem is there is no price; you have to make your own. If the price is too high, then you've been ripped off (although if you're buying crap to begin with, chances are you've already been ripped off), and if it's too low, then your friend will go bankrupt. Regardless of the price, your friend gets a big check (let's say $700 billion), you lose your money, and he no longer has any crap. That's a wonderful idea!
Instead what we should do is called a stock-injection plan, which has been advocated by many economists but denounced by the thousands of Wall St. lobbyists in D.C. Essentially, the plan works as follows: You don't buy any crap; your friend gets to keep it in his basement. But, since he has spent all his money to buy said crap, you still cut him a check for $700 billion, but now you co-own his house and get to move in with him. In other words, the U.S. gov't. buys stock in the failing banks, thus injecting them with capital but forcing them to hold on to their bad investments. Best of all, these stocks would be preferential stocks, so the gov't would get paid back in the event of bankruptcy before any shareholder.
This plan was included in the bill as an option for Paulson to execute should he choose to. Let's hope he does.
Source?
Even if this were true, my point is just that fiat money should be abolished.
I agree that something more has to be done to help our economy because it seems to be getting worse everyday. I hope the economy gets better at the end of the year because it might be hard to get student loans from the bank if it doesn't.
Post a Comment