View Full Version : US Government to buy out all the bad loans!
BigPappa
19-09-2008, 18:14
I hope this does not occur in the UK.
The US should not have done this as those who caused this have walked away with their bonuses and are not accountable.
So the rabid capitalists who do not want government intervention when they are making money come with their cap in hand when the proverbial hits the fan. This is the true face of capitalism today - one way bet.
I see the fallout is worst in the US and UK who have the most rabid capitalists and subsequently looking at the biggest losses.
Who would be happy if GB turned around and said he would buy out all the bad loans?
Fred2002
19-09-2008, 19:59
Technically it is not the Government that is buying out the bad loans but the people who put the money in their hands, us taxpayers!!
If a bank or other private business can not keep their house in order (for which read loan riddiculous amounts of money to people that should not have been allowed anywhere near a piggy bank let alone a mortgage of any sort) then it should not be responsibility of the taxpayer to dig them out of the mire.
It is giving a big signal to large financial institutions - 'Don't worry about making a total fudge up, the [insert name of mug country here] Government will see you all right' and they will do it too.
Private banks and similiar institutions if they make such dramatic losses should be left to crash and burn, not constantly go cap in hand to the taxpayer for free handouts.
Just think of how many schools, hospitals and tax cuts could have been paid for if those billions of dollars had gone where it was supposed to when Mr and Mrs Taxpayer handed it over!!!
Its a bit premature, starting a thread about it before GB has even done it, even for you.
Just Passing
19-09-2008, 20:30
Its a bit premature, starting a thread about it before GB has even done it, even for you.
The UK Government are currently drawing up similar plans "just in case" - although acknowledge they don't want to invoke them unless absolutely necessary. I'd rather they didn't take tax off me to bail out the banks, but I don't recall the last time I had a say in what this Government do.
olivetti
19-09-2008, 20:34
Follow it through; if the banks are allowed to fail what will happen? Massive job losses, not just in the banks (and after all it won't be those that got the huge bonuses that will suffer) but all the business that service those banks and their staff and so on and so on. It is not hard to see that doing something like this may well be cheaper than letting the banks go to the wall. As long as sanctions are put into place to penalise the banks as well as setting up a better form of regulation for the future I do not have a particular problem with this as I see the alternatives being far worse!
Its a really tough call this. I see why the US have done it, and if its a one time thing and then very strict rules are put in place to stop these situations happening again then maybe the initial tax hike is worth it in the long term, but those rules will need to be strict and the banks should be forced to pay back from profits a decent amount.
Rip Curl
19-09-2008, 21:01
Follow it through; if the banks are allowed to fail what will happen? Massive job losses, not just in the banks (and after all it won't be those that got the huge bonuses that will suffer) but all the business that service those banks and their staff and so on and so on. It is not hard to see that doing something like this may well be cheaper than letting the banks go to the wall. As long as sanctions are put into place to penalise the banks as well as setting up a better form of regulation for the future I do not have a particular problem with this as I see the alternatives being far worse!
Most folk have trouble seeing past their own debt.
Most folk have trouble seeing past their own debt.
BigPappa has trouble seeing past his own jealousy and feelings that everyone is getting one over on him.
BigPappa
19-09-2008, 22:45
BigPappa has trouble seeing past his own jealousy and feelings that everyone is getting one over on him.
You confuse jealousy with criticism.
Seems to me like a government propping up an ideaology using the toil and hard work of the people, even though there are big flaws at the centre of that ideology.
Communism? Capitalism? What's the difference?
BigPappa
19-09-2008, 22:53
Communism is when man exploits man. Capitalism is the other way round!
So is this due to banks loaning out too much? Or getting too little of it back?
If the latter, then I dont believe that people should out of work through borrowers greed. There really are some stupid greedy ex/soon-to-be bankrupt people out there, look at mse forums. I joined the site with an open mind about debt, til you read some of the stories. Like someone mentioned in the credit crunching thread, the whole place just seems so be a way for people to find out how to wriggle out of paying back debt.
So is this due to banks loaning out too much? Or getting too little of it back?
Greedy people + greedy banks - regulation = cluster****.
Its a really tough call this. I see why the US have done it, and if its a one time thing and then very strict rules are put in place to stop these situations happening again then maybe the initial tax hike is worth it in the long term, but those rules will need to be strict and the banks should be forced to pay back from profits a decent amount.
But its not the first time the Saving & Loans were bailed out to the tune of $400 million by the US taxpayers. They were talking about tougher regulations then too.
BigPappa
20-09-2008, 12:49
If anyone expects this not to happen again in the future then perhaps you live in dreamland. We have already had the Tech Boom and the Housing Boom in the last 10 years and no lesson have been learned.
We live in a debt based society where money exists because it is created out of thin air and our belief in the system. When belief goes the system goes. This will happen ad infinitum.
Anyone who thinks you can regulate and legislate that a future bubble will not occur is either blinded by the media or in denial - their are countless speculative booms throughout history.
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