How can fiscal conservatives back a plan that gives the government a substantial ownership interest in a private company?

 

I supported it for about 30 minutes when I first heard about it, and now I have changed my mind.

 

It really is showing the hypocrisy of both parties. The Democrats are obsessed with fixing the deficit, yet this $700 Billion is no big deal. The Republicans are supposedly the party of small government and minimal gov't intervention, but this is no problem as well.

 

This is disgusting

I supported it for about 30 minutes when I first heard about it, and now I have changed my mind.

 

It really is showing the hypocrisy of both parties. The Democrats are obsessed with fixing the deficit, yet this $700 Billion is no big deal. The Republicans are supposedly the party of small government and minimal gov't intervention, but this is no problem as well.

 

This is disgusting

 

The alternative would be what?

The alternative would be what?

 

The constitution does allow for something in this setting...

 

Anyone wish to take a guess.:confused:

I'm so confused. I'm an idiot, so explain it to me:

 

How is an unsecured loan a good idea to a company that will most likely never repay? IMO, it's a "free pass". The government bails them out, and the tax payers repay the loan. That's crap.

 

How can fiscal conservatives back a plan that gives the government a substantial ownership interest in a private company?

 

The company has substantial assets on which the government can claim rights should the company fail. Also, according to one potential plan, the government will own 79.9% of the company if the deal is made. The proposed plan would call for repayment over time to the government based on their ownership %. As far as conservatives backing this plan, I for one don't necessarily back it I'm just explaining how it is supposed to work. Of course, all this could change at anytime as we all know.

The company has substantial assets on which the government can claim rights should the company fail. Also, according to one potential plan, the government will own 79.9% of the company if the deal is made. The proposed plan would call for repayment over time to the government based on their ownership %. As far as conservatives backing this plan, I for one don't necessarily back it I'm just explaining how it is supposed to work. Of course, all this could change at anytime as we all know.

 

 

Thanks..TTC...it's still over my head. I tend to think in elementary economic terms....I live by the "if I don't have the money, I don't buy it" philosophy, so the complexities of such a deal befuddles me.

The company has substantial assets on which the government can claim rights should the company fail. Also, according to one potential plan, the government will own 79.9% of the company if the deal is made. The proposed plan would call for repayment over time to the government based on their ownership %. As far as conservatives backing this plan, I for one don't necessarily back it I'm just explaining how it is supposed to work. Of course, all this could change at anytime as we all know.

 

And 20% of the profits to go to ACORN. That is a deal breaker to me on its own merit.

I'm so confused. I'm an idiot, so explain it to me:

 

How is an unsecured loan a good idea to a company that will most likely never repay? IMO, it's a "free pass". The government bails them out, and the tax payers repay the loan. That's crap.

 

How can fiscal conservatives back a plan that gives the government a substantial ownership interest in a private company?

 

 

I'll give you my answer as I consider myself a fiscal conservative. If, given the choice of a several hundred billion dollar bailout that stabilizes the economy or a freezing of the U.S. credit markets, widespread business failures, and an economic collapse on the order of the Great Depression, I will take the bailout. An economic collapse of the magnitude that is being suggested would easily eclipse $700 billion in terms of impact and destruction of wealth. You would almost certainly see widespread job loss (probably far greater than during any recession in the post World War II era), and people who are presently on very stable footing with respect to their ability to pay their mortgages and other debt could be thrown into default. The total value of mortgaged homes in the U.S. is in the tens of trillions of dollars--a large scale economic collapse could decimate home values and cause a significant portion of that property value to evaporate. And what would we be able to do to jump start our economy? With so many people losing their jobs, tax revenue would fall off a cliff, too. We could be compelled to seek a bailout at that point from unfriendly foreign governments. The implications of that for our national sovereignty are not pretty.

 

I sincerely hope that the "do nothing scenario" is not as dire as has been made out, but it worries me that a faction of the Republican party (which has apparently finally seen the light on the dangers of the national debt) seems to be picking a hell of an inopportune time to "get religion".

Thanks..TTC...it's still over my head. I tend to think in elementary economic terms....I live by the "if I don't have the money, I don't buy it" philosophy, so the complexities of such a deal befuddles me.

 

Other than housing, so do I. I've done quite a bit of research on the mortgage lending debacle as of late and and from all appearances this collapse comes down to greed (i.e. questionable loans are written by mortgage bankers who in turn reap very lucrative commissions as a % of the loan written) and horribly lax credit requirements of the lenders. Overall, it's much more complicated than that, but these two items seem to be at the root of the problem.

Other than housing, so do I. I've done quite a bit of research on the mortgage lending debacle as of late and and from all appearances this collapse comes down to greed (i.e. questionable loans are written by mortgage bankers who in turn reap very lucrative commissions as a % of the loan written) and horribly lax credit requirements of the lenders. Overall, it's much more complicated than that, but these two items seem to be at the root of the problem.

 

 

You are right on with what has caused this. The bolded statement was what Clinton & some of the Democrats in congress like Barney Franks got in pressuring banks to make more loans available to consumers labeled as 'subprime' (less than stellar credit) in the late 1990's. Another part of this was the adjustable interest rate loans given to many of these customers, when after an increase, it put many of these customers' monthly payments well above what they could afford. They made bad loans to customers they shouldn't have made them to with the thought that even if the loans went bad, the real estate would increase and they would get their money back plus some profit. The real estate market began to drop, the variable interest rates went up, and they lost their butts. I am sure they didn't foresee this as a consequence, but here we are.

You are right on with what has caused this. The bolded statement was what Clinton & some of the Democrats in congress like Barney Franks got in pressuring banks to make more loans available to consumers labeled as 'subprime' (less than stellar credit) in the late 1990's. Another part of this was the adjustable interest rate loans given to many of these customers, when after an increase, it put many of these customers' monthly payments well above what they could afford. They made bad loans to customers they shouldn't have made them to with the thought that even if the loans went bad, the real estate would increase and they would get their money back plus some profit. The real estate market began to drop, the variable interest rates went up, and they lost their butts. I am sure they didn't foresee this as a consequence, but here we are.

 

 

It doesn't seem credible that politicians could pressure banks into making inherently unsound loans in a free market. That claim doesn't really hold water. Besides, Bush and the Republican party have controlled regulatory policy for 6 of the last eight years. Are you suggesting that all of the mortgages that are defaulting now and throwing the economy into peril were issued during Clinton's presidency (which ended in January, 2001)? That would mean that all of these shaky mortgages somehow survived the 2001-2003 recession, only to fail now. I have a very strong suspicion that if you analyzed the data on mortgage defaults, you would find that the majority of the problem lies with mortgages issued within the last 5 years. And if the policies of the Clinton administration had been so blatantly reckless (as you hypothesize), then why didn't Bush straighten things out as soon as he took office?

 

There is simply no other way to paint this than a failure of the market due to imprudent deregulation and unwise stewardship by the Republicans.

It is simple to me. 700 Billion or a depression.

It doesn't seem credible that politicians could pressure banks into making inherently unsound loans in a free market. That claim doesn't really hold water. Besides, Bush and the Republican party have controlled regulatory policy for 6 of the last eight years. Are you suggesting that all of the mortgages that are defaulting now and throwing the economy into peril were issued during Clinton's presidency (which ended in January, 2001)? That would mean that all of these shaky mortgages somehow survived the 2001-2003 recession, only to fail now. I have a very strong suspicion that if you analyzed the data on mortgage defaults, you would find that the majority of the problem lies with mortgages issued within the last 5 years. And if the policies of the Clinton administration had been so blatantly reckless (as you hypothesize), then why didn't Bush straighten things out as soon as he took office?

 

There is simply no other way to paint this than a failure of the market due to imprudent deregulation and unwise stewardship by the Republicans.

Funniest thing I have read on here to date.

Funniest thing I have read on here to date.

 

Poke fun all you want, but common sense regulation (a dirty word among Republicans for the last 25 years) would have prevented this whole thing. If I get some time, I'll post the sordid history of Phil Gramm's gutting of Wall Street regulation which dated back to the Depression.

It doesn't seem credible that politicians could pressure banks into making inherently unsound loans in a free market. That claim doesn't really hold water. Besides, Bush and the Republican party have controlled regulatory policy for 6 of the last eight years. Are you suggesting that all of the mortgages that are defaulting now and throwing the economy into peril were issued during Clinton's presidency (which ended in January, 2001)? That would mean that all of these shaky mortgages somehow survived the 2001-2003 recession, only to fail now. I have a very strong suspicion that if you analyzed the data on mortgage defaults, you would find that the majority of the problem lies with mortgages issued within the last 5 years. And if the policies of the Clinton administration had been so blatantly reckless (as you hypothesize), then why didn't Bush straighten things out as soon as he took office?

 

There is simply no other way to paint this than a failure of the market due to imprudent deregulation and unwise stewardship by the Republicans.

http://query.nytimes.com/gst/fullpage.html?res=9E06E3D6123BF932A2575AC0A9659C8B63&sec=&spon=&&scp=1&sq=New%20Agency%20Proposed%20to%20Oversee%20Freddie%20Mac%20and%20Fannie%20Mae&st=cse

 

Explain your position again? You need to call a spade a spade. The democrats messed this one up big time.

 

''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''

 

Representative Melvin L. Watt, Democrat of North Carolina, agreed.

''I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,'' Mr. Watt said.

Poke fun all you want, but common sense regulation (a dirty word among Republicans for the last 25 years) would have prevented this whole thing. If I get some time, I'll post the sordid history of Phil Gramm's gutting of Wall Street regulation which dated back to the Depression.

What about Barney Frank and Chris Dodds resistance to fixing the mortgage problem for the past 10 years?