thoughts and opinions

[ommango]

It seems to me that a gov't printing out 700 billion dollars to bailout bankers and banks is going to lead to huge inflation. Need more money? Just ask the federal reserve to print it based on nothing, more than a thousand dollars per person if it were coming from us. However it comes from our children's future as national debt. It comes out of our

Comments

[inhumandecency]

Although I don't entirely understand things, I think that the banks and investment firms were already functioning as if they had all that money, primarily by taking out loans of their own and using them to buy other things. That's the problem; those mortgage-based instruments suddenly turned out to be hollow, so the potential sale price tanked, so the banks have debts that they won't be able to pay if called upon to do so. Since they were already spending that money -- and the people they promised it to were spending it as well, leading to this crazy domino effect we've got going -- the bailout would just make the imaginary money that was already in the system into real money, rather than increasing the amount of spending and money-transfer beyond what was possible before.

At least, that's my current (tentative) understanding. There are many things wrong with the bailout and I certainly can't judge if it would work as advertised, but I don't think it would be inherently inflationary.

[chocorua]

Not many people on Wall St. were willing to act as if the housing market would ever decline. But because they're so central to the flow of money and credit, now the taxpayers are going to cover a lot of their bad bets. Part of me is thinking "is this the Cheney crowd ensuring that the Democrats, if elected, won't be able to do anything meaningful because the country is so broke?". Then I note that we're presently $295 Bn over budget on big weapons systems presently in development, and I think of the US millitary's contribution towards making the rest of the world safe for our capitalists to export jobs to, and I think in the end that we have the government we deserve...

[foxglovehp]

Being over here in Afghanistan, I haven't been able to follow this too closely. However, this mess was born in the 90's, was warned against at that time, and every time it came up. People didn't listen then, and now here we are. Yeah, we the taxpayers will likley have to foot the bill (again) for congressional ineptitude. I am not convinced that $700B is the solution, and I think this is really only as big a crisis as the media can make it. But I am not an economist, so I certainly don't have all the anwers and am barely qualified to offer an opinion. I do think the problem is systemic however, and part of the solution still lies in congressional term limits. Make the Congress serve the people again, not their own self-interests. Take a look at who in congress benefitted the most form this debacle and you have gone a long way towards rooting out the problem.