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Obama Wins by Default

jasonxe said:
Sad, we keep electing the same people and except a different result. (insanity)

Cookie monster, break it down.

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Obviously, Paul is confused about the nature of the TARP program. It has nothing to do with spending. Handled correctly, all the money will be returned to the government and there might even be a profit for taxpayers.
 
jasonxe said:
The End of Sound Money and the Triumph of Crony Capitalism - David Stockman - Mises Daily - TARP
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Stockman and Paul may object to TARP on ideological grounds, but the fact remains when Paul says we can't afford it, he is confused. The money we invested in the banks will all come back to the government. The real problem with the program is not that we did too much, but that we haven't done enough. Once the banks were "fixed" we found that with interest rates so low, the economy so shaky banks weren't willing to lend money to some credit worthy businesses and individuals, so investment was stalled and consumer demand remained unrealized for lack of credit. What the government should have done and still should do instead of whining about banks not lending money or corporations not investing to meet non existent demand is to begin to lend money at interest directly on a large scale to businesses and individuals it considers credit worthy in order to create real demand to spur investment by corporations holding a lot of cash and to provide investment capital to businesses that aren't holding a lot of cash, and all of this will provide jobs, jobs, jobs.
 
toomuchtime_ said:
Stockman and Paul may object to TARP on ideological grounds, but the fact remains when Paul says we can't afford it, he is confused. The money we invested in the banks will all come back to the government. The real problem with the program is not that we did too much, but that we haven't done enough. Once the banks were "fixed" we found that with interest rates so low, the economy so shaky banks weren't willing to lend money to some credit worthy businesses and individuals, so investment was stalled and consumer demand remained unrealized for lack of credit. What the government should have done and still should do instead of whining about banks not lending money or corporations not investing to meet non existent demand is to begin to lend money at interest directly on a large scale to businesses and individuals it considers credit worthy in order to create real demand to spur investment by corporations holding a lot of cash and to provide investment capital to businesses that aren't holding a lot of cash, and all of this will provide jobs, jobs, jobs.
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Actually, I think that you are confused about the purpose of government. The Federal Government is not a bank. It has no authority to lend money to businesses.
The problems we see in the financial markets are due to fact that the bad debt has not been liquidated. Had that occurred we would have seen real growth by now. Interest rates are set in order to measure risk of investment. Artificially low interest rates encourage bad investment and financial bubbles. When the bubble bursts, the bad debt needs to be liquidated and people need to lose the money they invested in bad loans. Without that the Market can not correct itself.
The Federal government spends more money than it takes in. This behavior is fundamentally unsustainable. Most of the money that has been spent to prop up those banks that should have failed was printed just for that purpose. That is the text book definition of what causes inflation. The only people that benefit from inflation are the banks that receive the money initially. The rest of us pay higher prices for a long time before our wages ever increase. This is how the Federal Reserve taxes the population. This is how wealth is transfered to the rich and away from the middle class and the poor.
 
toomuchtime_ said:
Obviously, Paul is confused about the nature of the TARP program. It has nothing to do with spending. Handled correctly, all the money will be returned to the government and there might even be a profit for taxpayers.
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It is you that is confused. Freddie and Fannie is a part of Tarp and we stand to lose trillions there. Or billions and billions. Pick your number, nobody really knows how much we will lose.
 
Debtors are helped by inflation, creditors hurt. Debtors pay back debt with less valuable dollars.
 
toomuchtime_ said:
Stockman and Paul may object to TARP on ideological grounds, but the fact remains when Paul says we can't afford it, he is confused. The money we invested in the banks will all come back to the government. The real problem with the program is not that we did too much, but that we haven't done enough. Once the banks were "fixed" we found that with interest rates so low, the economy so shaky banks weren't willing to lend money to some credit worthy businesses and individuals, so investment was stalled and consumer demand remained unrealized for lack of credit.
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Complete B.S. There is absolutely no problem with anyone who is credit worthy in getting a loan.

What the government should have done and still should do instead of whining about banks not lending money or corporations not investing to meet non existent demand is to begin to lend money at interest directly on a large scale to businesses and individuals it considers credit worthy in order to create real demand to spur investment by corporations holding a lot of cash and to provide investment capital to businesses that aren't holding a lot of cash, and all of this will provide jobs, jobs, jobs.
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Like Solyndra?
 
TurtleDude said:
Debtors are helped by inflation, creditors hurt. Debtors pay back debt with less valuable dollars.
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And quit investing in that debt. Which in the big picture will be a good thing.
 
Professor8000 said:
Actually, I think that you are confused about the purpose of government. The Federal Government is not a bank. It has no authority to lend money to businesses.
The problems we see in the financial markets are due to fact that the bad debt has not been liquidated. Had that occurred we would have seen real growth by now. Interest rates are set in order to measure risk of investment. Artificially low interest rates encourage bad investment and financial bubbles. When the bubble bursts, the bad debt needs to be liquidated and people need to lose the money they invested in bad loans. Without that the Market can not correct itself.
The Federal government spends more money than it takes in. This behavior is fundamentally unsustainable. Most of the money that has been spent to prop up those banks that should have failed was printed just for that purpose. That is the text book definition of what causes inflation. The only people that benefit from inflation are the banks that receive the money initially. The rest of us pay higher prices for a long time before our wages ever increase. This is how the Federal Reserve taxes the population. This is how wealth is transfered to the rich and away from the middle class and the poor.
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As I recall, when Moses came down from the mountain with those stone tablets, they didn't include a definition of what the purpose of government is. In a democracy, voters decide what the purpose of government is, and it is clear from the way we vote that the majority of American voters want the federal government to do much more than the founding fathers may have thought appropriate.

Whether banks hold on to bad loans or liquidate them at market prices, the result is the same: they will have less money to lend out and means economic growth will be slower than if they had more money to lend out. Only the federal government can supply the amount of new money to lend to spur more robust economic growth.

Actually, increasing debt is sustainable, for individuals as well as for governments, as long as the debt grows at a lower rate than income for individuals and the GDP for governments. That's why people who earn more can afford to borrow more to buy a house or car, etc.

Regardless of what text books you may be reading, the government continues to borrow and print money on a massive scale and yet there is no inflation.

Inflation provides no transfer of wealth from the middle class and the poor. They may get poorer until their wages catch up with prices, but the owners of businesses are being paid in inflated dollars the real value of which in terms of purchasing power is no greater than the old price was. On the other hand, debtors pay back their loans with inflated dollars that have less purchasing power the the dollars they originally borrowed.
 
1Perry said:
It is you that is confused. Freddie and Fannie is a part of Tarp and we stand to lose trillions there. Or billions and billions. Pick your number, nobody really knows how much we will lose.
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I am pretty sure you are wrong on Freddie and fannie being part of TARP. They were/are private companies with government guarentees well before any of this started.
 
1Perry said:
It is you that is confused. Freddie and Fannie is a part of Tarp and we stand to lose trillions there. Or billions and billions. Pick your number, nobody really knows how much we will lose.
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There is good reason to believe Freddie's and Fannie's total losses from the subprime market will be less than $200 billion, and the taxpayer money they are receiving is in the form of loans at interest in the same way as privately owned banks. Since most of the larger banks have already paid back their TARP money plus interest and the smaller ones are making good progress at doing the same, there is no reason to think that Freddie and Fannie will not be able to pay back their share of the TARP money, given the scale of their operations.
 
washunut said:
I am pretty sure you are wrong on Freddie and fannie being part of TARP. They were/are private companies with government guarentees well before any of this started.
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Technically, that's true. The Treasury made a separate agreement with Freddie and Fannie after TARP had passed in which it extended an unlimited credit line, but it was in the same spirit as TARP. So far about $168 billion has been paid out and Freddie and Fannie have paid back about $28 billion.
 
washunut said:
I am pretty sure you are wrong on Freddie and fannie being part of TARP. They were/are private companies with government guarentees well before any of this started.
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This is far bigger than what I am going to post but because it's late and it's the first link to pop up I'm going to use it. I'm more than happy to provide far more infor in required.

FORTUNE -- Taxpayers may not realize it, but they just bailed out Bank of America again, this time to the tune of more than a half billion dollars.

In short, purchasing these servicing rights was another Troubled Asset Relief Program.

This is on top of the ones we were already going to lost big time on.

Bank of America's back-door TARP - The Term Sheet: Fortune's deals blog Term Sheet
 
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toomuchtime_ said:
There is good reason to believe Freddie's and Fannie's total losses from the subprime market will be less than $200 billion, and the taxpayer money they are receiving is in the form of loans at interest in the same way as privately owned banks. Since most of the larger banks have already paid back their TARP money plus interest and the smaller ones are making good progress at doing the same, there is no reason to think that Freddie and Fannie will not be able to pay back their share of the TARP money, given the scale of their operations.
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Only for those living in Lala land. It's no wonder our financial situation is such a mess. Holy cow. If I really said what I think of your post, I would likely get slapped.
 
toomuchtime_ said:
Technically, that's true. The Treasury made a separate agreement with Freddie and Fannie after TARP had passed in which it extended an unlimited credit line, but it was in the same spirit as TARP. So far about $168 billion has been paid out and Freddie and Fannie have paid back about $28 billion.
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The government used TARP money to take bad loans off the books of major banks and place them on the books of F&F. They then got us on the hook for billions more with the mess that is F&F.

I'm making up numbers here......They would give bank A $5 billion for their bad loans. They then paid the banks interest on this money while they were investing it running up the stock market. After making record profits in the stock market they gave the $5 billion back but we are still sitting on the $5 billion in bad loans.

So while it "appears" we were paid but, we aren't.
 
1Perry said:
This is far bigger than what I am going to post but because it's late and it's the first link to pop up I'm going to use it. I'm more than happy to provide far more infor in required.

FORTUNE -- Taxpayers may not realize it, but they just bailed out Bank of America again, this time to the tune of more than a half billion dollars.

In short, purchasing these servicing rights was another Troubled Asset Relief Program.

This is on top of the ones we were already going to lost big time on.

Bank of America's back-door TARP - The Term Sheet: Fortune's deals blog Term Sheet
Click to expand...

While the deal seems like a stinker, $500 million is hardly a bailout when it comes to BoA. You could also point to articles where the same government allegedly bailing out the bank that they are suing it for billions.
 
apdst said:
What's Obama going to offer, that will get him re-elected? I seriously doubt that promising more of the same will do the job. I'm just guessing. :rofl
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No, he is going to offer a sanity as the alternative to insanity, which should do the trick with the independents, who by definition hate the extreme. Romney will be a comfortable sane alternative, but he is likely not to make it out of the process.
 
upsideguy said:
No, he is going to offer a sanity as the alternative to insanity, which should do the trick with the independents, who by definition hate the extreme. Romney will be a comfortable sane alternative, but he is likely not to make it out of the process.
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Good luck with that.

Sanity is NOT trying the same thing over and over to improve the economy in the dimwitted hope that it will magically work this time.
 
1Perry said:
The government used TARP money to take bad loans off the books of major banks and place them on the books of F&F. They then got us on the hook for billions more with the mess that is F&F.

I'm making up numbers here......They would give bank A $5 billion for their bad loans. They then paid the banks interest on this money while they were investing it running up the stock market. After making record profits in the stock market they gave the $5 billion back but we are still sitting on the $5 billion in bad loans.

So while it "appears" we were paid but, we aren't.
Click to expand...

Although as originally conceived, TARP was supposed to "bail out" the banks by buying up their bad loans at a discount, after being modified by the Dem Congress and the Obama WH, Tarp money was used instead to loan money to banks at interest and these loans were secured by bank stock. The Fed, not the Treasury(Tarp) has been quietly buying up some of these bad debts at discounted prices but on such a small scale, it's hard to imagine it makes much of a difference. However these bad debts still have some value, and as the housing market eventually improves, it is likely the Fed will be able to recover most or all of the discounted price it paid for them.

Because of the low interest rates, uncertainty about the economy and about what new regulations Dodd-Frank Will lay on them, banks have been more cautious than usual about making loans and have, as you say, made less traditional investments, and since taxpayers became part owners of the banks that accepted TARP money, they have benefited from these new profits.

So the Fed will hold on to the bad debts it bought at discounted prices until the housing markets improves enough for it to recover its costs and the banks, including Freddie and Fannie, will continue to pay back the the money they have borrowed from the Treasury (TARP). In the end, this program will have cost taxpayers little or nothing. However, since banks have raised the bar on what constitutes credit worthiness, many individuals and businesses with good cash flow but devalued collateral have a hard time securing loans, and this is keeping the economy from growing and is keeping millions of Americans unemployed. Part of the answer to the question of how to turn the economy around is for the Treasury to begin lending money to these credit worthy individuals and business that are being turned down by the banks.
 
I think Obama will blow-up (outburst for those who think otherwise) during the next year because of his isolation. he can't stand to have anyone disagree with him, after all he is The Anointed One and everyone knows he is special (tongue-in-cheek). As for who will beat him, we are way too far out for that yet. The candidates will go up and down in the polls like a merry-go-round and fall off one by one when they run out of steam or cash. If I were a betting person I'd go for Romney, because he has already taken all the Wall Street monies Obama got last time. Plus I think Sorros is angry with him for being a failure.
 
washunut said:
While the deal seems like a stinker, $500 million is hardly a bailout when it comes to BoA. You could also point to articles where the same government allegedly bailing out the bank that they are suing it for billions.
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$1 is too effing much. This is on top of all the other crap we have done to keep them afloat. We should NOT be taking over a single one of these bad loans.
 
toomuchtime_ said:
Although as originally conceived, TARP was supposed to "bail out" the banks by buying up their bad loans at a discount, after being modified by the Dem Congress and the Obama WH, Tarp money was used instead to loan money to banks at interest and these loans were secured by bank stock. The Fed, not the Treasury(Tarp) has been quietly buying up some of these bad debts at discounted prices but on such a small scale, it's hard to imagine it makes much of a difference. However these bad debts still have some value, and as the housing market eventually improves, it is likely the Fed will be able to recover most or all of the discounted price it paid for them.
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It really makes me ill when people note that a half billion dollars is no big deal.

Because of the low interest rates, uncertainty about the economy and about what new regulations Dodd-Frank Will lay on them, banks have been more cautious than usual about making loans and have, as you say, made less traditional investments, and since taxpayers became part owners of the banks that accepted TARP money, they have benefited from these new profits.
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We are losing billions.

So the Fed will hold on to the bad debts it bought at discounted prices until the housing markets improves enough for it to recover its costs and the banks, including Freddie and Fannie, will continue to pay back the the money they have borrowed from the Treasury (TARP). In the end, this program will have cost taxpayers little or nothing. However, since banks have raised the bar on what constitutes credit worthiness, many individuals and businesses with good cash flow but devalued collateral have a hard time securing loans, and this is keeping the economy from growing and is keeping millions of Americans unemployed. Part of the answer to the question of how to turn the economy around is for the Treasury to begin lending money to these credit worthy individuals and business that are being turned down by the banks.
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I addressed this. You ignored it. Like Solyndra?
 
toomuchtime_ said:
You're right that the factory or office building might not be built near your diner, but history has shown us that fewer costly regulations and lower taxes does lead to more private investment, so the factory or office building might be built near some one else's small business, but it will likely be built.

I agree that allowing free markets to make investment decisions carries risks as well as the potential for prosperity, but historically taxing and regulating away the incentive for private investment and allowing the government to make investment decisions leads to a stagnant economy and higher unemployment. Reagan's tax cuts and deregulation spurred the robust economic growth of the late 1980's and the 1990's but it also led to much higher public debt and to the tech bubble of the late 1990's that wiped out so much of the retirement savings of working Americans, and while the Bush tax cuts probably staved off an earlier recession, unfortunately the private investment they spurred was largely in over priced real estate and, largely because of the failures of the FDIC, the FED and Congress to exercise their oversight responsibility to prevent banks from investing so heavily in risky loans, they also led to the recent financial crisis and recession.

So incentivising private investment and allowing free markets to make investment decisions carries the potential for both risk and reward, and no one has yet figured out how to eliminate the risks and still realize the reward. In 2012 we will have the choice between four more years of a stagnant economy, high unemployment occasionally relieved by temporary jobs financed by higher taxes or higher debt or we can choose to try to regain our confidence in ourselves and our country and return to the kind of free market economy that built this country. Romney, the likely Republican nominee, has had a long and successful career taking on failing enterprises in both the public and private sectors and returning them to success and profitability. Obama, on the other hand, has failed to accomplish anything on significance in any job he has ever had. Why would anyone want to vote for failure a second time?
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where has 9 years of tax cuts landed us? right here.
 
Confucius said:
Quite frankly I think if Obama winning would be a good thing. He may not have done much this term, but the way I see it that's the fault of all the goddam Republicans in senate and congress who won't let him. Everyone seems to think Obama reigns supreme, but he really doesn't have enough power to effectively change things for the better. It seems to me as if he has had a lot of good ideas that have been blocked by congress. One thing he could've done but didn't was to continue to raise the debt ceiling but didn't.
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Sorry, bud, but you can't blame it all on Congress. Obama is supposed to lead, and that is something he has not done. True, Congressional Repubicans have put party politics ahead of country, but Obama has not risen to the challenge either. It takes two to dance, and Republicans and Democrats make perfect dance partners. They both suck.
 
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