POST SCRIPTS

Why should this country borrow close to a billion dollars that we don't have, give it to unknown wealthy companies that don't need it, for reasons that nobody can explain. The whole thing sounds like a scam to me.

Its not close to a billion Jim, it's close to a trillion!

Jim the big consideration is that without this fix the entire world banking system will freeze up to such a degree that business will halt, the economy will collapse and we will all be thrown into a worldwide depression...severe gloom and doom. Nobody likes it but it is where we apparently find ourselves.

Could the "experts" be wrong in their calculations and supositions, yes. Do we want to take that risk? It's all well and good to just let the companies fail but when that means we all suffer very dire consequences does it make sense.

The experts also believe if structured right the loans could result in the government making money over time on the deal. If government uses that gain prudently (paying off debt or bolstering the social security "fund") it will be good for all of the people. If they syphon it off to various special interest groups it won't, IMHO.

One more thing. The success of this plan, if implemented, hinges on a growing stable economy. Unreasonable regulation, fraud, and greed, got us into this mess and they, along with higher taxes, can easily undermine and ruin recovery.

Tina, are you willing to pay more in taxes for this bailout? The cost is about $10,000 per family. If congress approves this, I think it should be fully funded with a tax increase. This country already has too much debt. I hear people saying that we could fund this with cuts in government spending. The only place where we could cut that much is in the military. Are you will to cut the military budget? Would you be willing to leave Iraq immediately to fund this? We can't afford everything, otherwise it will destroy the country with the added debt.

These experts have been wrong about everything for the last 6 years, why do you trust them now?
If they really need to do the bailout, I want to see a very detailed plan on how the money will be used, before it's approved. So far there is no plan.

Frankly, I think this is a scam. The banks can bail each other out, just like we saw with Washington Mutual. If we really believe in free markets, then let the market sort this out.

Jim several things you said simply are not true.

We have debt, that's true, but it has accumulated as a result of excessive spending not for lack of increases in revenue. Revenues increase when taxes are cut. This seems to be a difficult concept for people to get but it is varifiably true. It doesn't make sense to increase taxes when the economy is in trouble. It makes sense to cut taxes to stimulate growth in business and thus bring more revenue in to government. Cutting taxes would also help to rebuild confidence.

Jim Asked, "The only place where we could cut that much is in the military. Are you will to cut the military budget? Would you be willing to leave Iraq immediately to fund this?"

The only place we should be spending money is the military so no, I would not and I don't believe we have to.

If we held all government spending to current levels for a time instead of increasing them every chance we get and if we cut out all pork barrel spending the difference would be incredible. If we could also somehow cut waste even more could be saved.

"If they really need to do the bailout, I want to see a very detailed plan on how the money will be used, before it's approved."

Very wise of you Jim...I doubt we will get the chance. It's the pits but we have to depend on our elected representatives. It's heartening to know the American people are putting tremendous pressure on them because we all feel as you do, very distrustful!

" The banks can bail each other out, just like we saw with Washington Mutual"

It's my understanding that in some cases this works and in others the entangled instruments make it impossible. This is way above my pay grade; the best I can do is listen to people I have come to trust.

"These experts have been wrong about everything for the last 6 years, why do you trust them now?"

I don't know which experts you're referring to that got it wrong for 6 yrs. I was talking about certain people in the world of business and economics. Did you have anyone or any group specifically in mind?

Tina, thank you for your thoughtful response. However total 'pork barrel' spending amounts to about around $15 billion, to $30 billion a year. At that rate it would take 30 years to pay off just the bailout, not counting the other national debt we now have.

http://www.buzzle.com/editorials/7-10-2006-101780.asp

I think you are being foolish if you think the government will ever come out ahead in this deal, if that were the case, private investors would fund it.

As for which experts? Paulson, Bernanke, and President Bush have all been telling us the economy is in fine shape. So they didn't know what was happening. The executives at these banks are the ones who got us into this mess, so why trust them now? The last thing you give an alcoholic is more liquor. Same with these irresponsible investors, giving them money is a mistake.

Let them fail, sit back and let the market readjust, and then things will work them selves out. It might take a year, but it's better than waisting a trillion dollars.

There are only 3 ways to fund 750 Billion. 1)Tax increase, 2)Cuts in military spending (stopping the war in Iraq) 3)INFLATION. There is no other way.

We'll sort this out yet Jim.

May I direct you to A Wall Street Journal piece today:

http://online.wsj.com/article/SB122230704116773989.html

"The Paulson Plan Will Make Money For Taxpayers," by ANDY KESSLER

"In 1992, hedge-fund manager George Soros made $1 billion betting against the British pound. In 2007, John Paulson's Credit Opportunities fund correctly bet against subprime mortgages, clearing $15 billion for the year and $3.7 billion for him. Warren Buffett is now hoping to make big money on Goldman Sachs. *** But these are small-time deals. My analysis suggests that Treasury Secretary Henry Paulson (a former investment banker, no less, not a trader) may pull off the mother of all trades, which could net a trillion dollars and maybe as much as $2.2 trillion -- yes, with a "t" -- for the United States Treasury."

The answer to why we (through our government) must loan this money rather than the private sector can be found in the numbers...the number is BIG. Warren Buffet had enough for the one company but no single entity or person has the amount needed to fix what's wrong.

You wrote, "Paulson, Bernanke, and President Bush have all been telling us the economy is in fine shape."

No, they have been telling us the fundamentals of the economy are sound. People still have jobs, unemployment remains relatively low, people are still paying their mortgages, taxes etc. Business is on hold now but has been performing well. The economy under GWB has been good and it has not been reported accuratel, for purely political reasons.

"There are only 3 ways to fund 750 Billion. 1)Tax increase, 2)Cuts in military spending (stopping the war in Iraq) 3)INFLATION. There is no other way."

The fourth way is INVESTMENT! If this bill is written right, and if we elect a tax cutter, instead of a tax increaser and spender, to fuel the engine of business and the amazing productivity of the American people we can grow our way out of debt.

What is missing in America is a sound understanding of how business and government work (or don't).

Listen, we've been borrowing about 500B a year for each of the last four years to fund the stupid war ... and that didn't bother you ... much. They can go for the $750B, but dang, they've got to spend it effectively.

You know, most of the people in this country (unlike depression era folk) have lived their entire lives on credit. They just don't understand about "no money" ... because there's always credit. If we don't get a handle on this, there will be no money, and no credit either ... and we will all be learning a valuable lesson, all over again.

Tina's right. It is sounding better and better. They're going to organize this project into stages. They promise to account for the money ... which is more than the Pentagon's managed to do the last six years.

The big thing right now is to get the nation's banks to fess up, in great detail, about just how much bad paper they're carrying. But they only have to tell Treasury. I'm recanting my transparency demand. The banks have to have a mechanism for getting out from under ... without alarming those depositors. We can't have any more bank runs.

This is going to make the project more expensive, because the banks are already panting to unload bad debt that is not sub-prime derived. (What did I tell you? Our best intentions, subverted every time.) But we're just going to have to trust Treasury to sort it out.

Libby I guess if you and I can begin to find agreement about this those Congress Critters sure should be able to...LOL.

You said, "This is going to make the project more expensive, because the banks are already panting to unload bad debt that is not sub-prime derived. (What did I tell you? Our best intentions, subverted every time.)"

Human nature! Freebies! Getting let off the hook! Special consideration! It's the thing that motivates lobbyists. It's what motivates poor folk to sign up for no down, low payment loans they are unable to pay off. It's why even wealthy people show up for free cheese. Who won't take a buck that's handed to them? Who won't let someone else do the dishes if they're dumb enough (or sweet enough) to offer?

This is exactly why government should be as small and simple as possible.

If Barney Frank, Nancy Pelosi and Chris Dodd want to help low income people buy homes they should gather a bunch of their buds together for wine and brie fundraisers doing private projects every year until they saturate that need in themselves...they could probably even get Barbra or Bono to show up and sing. They could then make private loans to thes poor folk and take the risk themselves instead of playing around foolishly with ours.

Voluntary donations I can get behind...taxes are coercive and should only be taken to cover the essentials. And like it or don't, defense of the nation is one of only a few things government should have it's hands on. We'll never see that day come, of course, but we should point our noses in that direction.

Tina,

I have been following the conversations on a variety of Post Script threads and was wondering about what I perceive as an inconstancy. I was hoping you could help me understand.

On this thread you wrote:

"Jim the big consideration is that without this fix the entire world banking system will freeze up to such a degree that business will halt, the economy will collapse and we will all be thrown into a worldwide depression...severe gloom and doom. Nobody likes it but it is where we apparently find ourselves.

Could the "experts" be wrong in their calculations and suppositions, yes. Do we want to take that risk? It's all well and good to just let the companies fail but when that means we all suffer very dire consequences does it make sense.

On another thread (A LOOK AT ISSUES ON THE LEFT) you wrote:

The left identifies a problem, like the need to pay better attention to managing the environment well, then they go to extremes and declare the GW theory is proven fact. Most of the associated theories are a result of studies done to obtain tax money in the form of grants with no clear conclusion. It's a great way to get others to pay for what amounts to a hobby. (Many other scientists have, meanwhile, been locked out of available grant monies.)"

Not to be rude, but why are experts to believed in one situation, and not the other. Why are some experts motives questioned, and others not?

Thanks in advance.

Mark

Editors note: In case someone notices this response has been altered, I need to disclose that I made additional comments regarding the financial problem. That portion can be found between the *'s.

Excellent question Mark. It's good to know you are out there keeping me honest. I'll do my best to tell you what I think are the differences. I'll address my own words one instance at a time:

I wrote: "the big consideration is that without this fix the entire world banking system will freeze up to such a degree that business will halt, the economy will collapse and we will all be thrown into a worldwide depression"

I believe I acknowledge that this is the concern. It has not been advanced as an "indisputable fact". Also the consideration is supported by evidence of political pressures and bad policies, bank and lending irregularities, illegal/unethical behaviors, etc. These are things that have been reported in several sources in America and Europe. The accusations are backed up with documents and records. There are dots that can be connected and that allows us to better evaluate what "experts" are saying. *The fact that no other viable solution has been offered puts me at trusting those who are on the record as having seen the problem coming, tried to get Congress to fix the problem, and have knowledge in the field sufficient that they should have a good grasp of the problem and possible solutions. I also looked for agreement by sources I have come to trust in the past. It wasn't easy since some disagree.*

I wrote, "The left identifies a problem, like the need to pay better attention to managing the environment well, then they go to extremes and declare the GW theory is proven fact."

In this case a politician, Al Gore, has been at the forefront of a movement pushing drastic changes in the way we live and do business based on a theory that has not been proven, and in fact has been refuted, but is passed off as absolutely true. He refuses to consider another opinion. He has lied to the public, placed his "documentary" into our educational institutions, and created business entities and associations that benefit him financially. This is an "expert" that I find unworthy of serious consideration. The "experts" he cites are called scientists, yet some are medical doctors (good at what they do but hardly able to offer proof about GW based on their degree and experience) Experts in related fields should know, as scientists, that "concensis" is not an adequate measure of proof in science, yet they don't mind using concensus as if it constituted proof. These things color my perceptions and call into question those who claim to be experts as well as their theories.

I guess the answer to your question is that we can rarely be 100% sure. We can, however, look to the supporting evidence or lack thereof.

Does that make sense or are we still at odds?

Note: I should have written "worldwide recession" rather than "depression" on the first one...my error.

Tina,

We are not at odds. You are helping me understand your (and many others) view point.

You are my favorite skeptic and I have to admit admit I was caught off-guard by your quick acceptance of the bailout plan. That made me wonder why you are so quick to dismiss global warming. I felt like I could of switched the terms and the two posts would have still sounded the same.

In your response you seem to have a particular dislike for Al Gore. I understand why, but in this story he is simply a TV commentator. He is just "reporting" the fact as he sees them. And you should know not to believe what you see on TV. (smile)

To be clear, I believe global warming. The climate is changing again, and humans are responsible for the current shift. Far more scientists say it is happening than say it is not. The critics have far more to profit from their position than the proponents. The science is fairly simple and straight forward.

Why do you have such a hard time accepting this?

Now we can go back and forth on the science is you wish, but there seems to be something deeper. I am not trying to psychoanalyze you, (and sorry if I am being rude) but your two different responses made me wonder if I was missing something that you could help reveal.

Respectfully,

Mark

And sorry to Jim for hijacking his post. - M

Thanks Mark. I'm always happy to clearify on any point...and I learn more myself through these exchanges.

You wrote, "That made me wonder why you are so quick to dismiss global warming." and "in this story he (Al Gore) is simply a TV commentator"

It wasn't a quick dismissal. I have followed this issue since the late seventies or early eighties. I was a supportive member of John Denvers organization (I think it was The Windstar Foundation) in the early years and am still interested in being a good conservator of our environment. I became a bit of a sceptic when Al Gore was invited to speak at the yearly event in Aspen. I am always sceptical when an issue is politicized. After weighing opinions on both sides and being introduced to information from scientist that present alternate explanations for "warming" (some say now cooling) cycles and for many of the other environmnetal claims I began to question more fervently. My aversion to Al Gore has to do with his approach. There are many things he could do that he doesn't do that would make him more credible. First of all science does not rely on concensus it relies on proof. In the face of scientific disagreement he should be willing to acknowledge the questions that have arisen. Instead he attempts to discredit those who disagree. He has also, as I said, set himself up to gain substantially from businesses and the carbon credit deal. I have no problem with people making money through wise investment. I have no being given an opportunity to purchase a product. I have a problem with someone using political power to pressure and force changes unnecessarily and dishonestly. I have no respect for the way that Al Gore and others have approached this issue and I question their intentions.

I disagree that Al Gore is just a TV commentator. He is a well known former Vice President of the United States of America. He has tremendous political clout and influence. I think it is a mistake to discount the influence he and others bring to the issue...for better or worse.

You said, "The climate is changing again, and humans are responsible for the current shift. Far more scientists say it is happening than say it is not."

I don't know how either of us could prove, or disprove, your statement about the number of scientists definitively. I'm aware of 30,000 scientists that recently sent a letter to the UN in support of my position. I posted about it a few weeks ago. The science that demonstrates naturally occuring forces for warming/cooling is quite compelling. The concensus that warming/ cooling is man made is shakey, IMHO :) It may be a bit egotistical as well...LOL.

You said, "The critics have far more to profit from their position than the proponents."

In what way? They aren't suggesting huge global tax schemes and transfers of wealth. They aren't suggesting drastic changes in how we live and do business by unreasonable deadlines with heavy fines attached for noncompliance.

You said, "The science is fairly simple and straight forward."

I guess it is if you don't bother to read about sun spots. It is if you don't read articles that refute the science behind this "theory passed off as proof". Have you looked at anything other than that which supports human caused GW?

You said, "we can go back and forth on the science is you wish, but there seems to be something deeper. I am not trying to psychoanalyze you,..."

Let's put the back and forth on the science off untill we have an appropriate post. (I'll try to accommodate soon) The something deeper may simply be my compassion about a few simple things.

I don't appreciate the way the public is often manipulated with half truths and lies. We spent a long period when "other voices" had no place to be heard. True debate was almost nonexistent. Our media was either asleep or frozen into a solid groove and we were being given a one sided view of events and opinion and very few (selective) facts.

I don't appreciate being forced to comply with laws based on trends based on false or faulty information, especially when it takes money out of my pocket or forces me to change the way I live. It insults my intelligence and it makes me suspicious of the motives behind the law.

I care deeply about freedom and opportunity for all. I also care deeply about truth, respect, and honor. These are the things behind the passion I bring to every issue. (I do also admit I am human and do not always measure up to my own ideals)

Mark, you are never rude, at least you haven't been thus far. I really appreciate that about you.

Tina,

Thanks for the thoughtful response.

I could argue with you over the science, and you can be assured that I have done some reading on all sides of the subject. I am happy for the exchange, and I wait for a future post, when/if you have time.

I am most appreciative, however, of your last few statements. I can imagine how you feel if pushed, or told "the debate" is over. I can tell from other posts that you are skeptical of things that take money out of your pocket (hence my surprise at your trillion dollar acceptance) and even more so, people who tell you how to live.

I will keep those things in mind as we continue the conversation.

Take care,

Mark

Mark I look forward to a future discussion on man made warming as well.

One point. I have not been "accepting" of the trillion dollar proposal...I have been accepting of the urgency to clean up the mess that my government has made. Shamefully it is affecting banks all over the world.

My position springs from a sense of responsibility. I'm praying that a good bill can be hammered out and I'm very pleased that both Democrats and Republicans are objecting strongly to suspect language. Taking the ACORN section out was a good thing, for instance. Language that says returns would go toward paying off debt rather than being funneled into more programs makes me happy.

I can't say for sure that I would support the final product...and I'm as prepared as anyone else for the fallout from doing nothing.

Tina,

Accepting was my word, not yours.
Point taken.
Be well,

Mark

I, as an informed tax paying voter, understand that someting needs to be done about this banking and insurance problem. What I don't understand and totally disagree with is our tax money going to pay for these C.E.O.s millions of dollars in severance packages.... If I messed up as bad as they did in their jobs, I would be fired and would not even be eligable for unemployment. If WE THE PEOPLE have to bail these companys out then all contracts for the ignorant people that got them there in the first place should be null and void and possibly jail time for their committing fraud on the people of this country...
This is my opinion and I am very passionate on this subject and think this point should be made to the entire CONGRESS as a whole. Trueth Be Known, most of the American people would agree with me.
Thank You for your time and ear,
Inis "Mickey" Perry
Nacogdoches, Texas
936-564-4406

Mr. Perry...may I call you Mickey? We're very pleased to hear from you...and all the way from Texas!

I share many of your concerns. People have been unhappy about CEO pay for some time even without the recent financial troubles. I try to remind myself that it is really a seperate issue unless it is proved that some of these people were guilty of illegal activity having to do with the failures.

I understand there are investigations underway and subpoenas have been issued. The AP reports:

"Law enforcement officials said last week the FBI is looking at potential fraud by Fannie, Freddie, and insurer American International Group Inc. Additionally, a senior law enforcement official said failed investment bank Lehman Brothers Holdings Inc. also is under investigation. *** The inquiries will focus on the financial institutions and the individuals that ran them, the senior law enforcement official told the Associated Press last week. *** Officials said the new inquiries bring to 26 the number of companies connected to the mortgage crisis under investigation over the past year."

One of my pet peaves is the conduct of congress people (and former presidents) in creating this problem and their stubborn refusal to address it over a four year period after repeated warnings. They should at least lose their jobs...I suspect some should be prosecuted.

The other is the blind media. They should be reporting everything they find or can dig up about everybody and every thing on this issue.

Thank you for taking the time to comment on Post Scripts, Mickey, and...ya'll come back real soon!