If you knew the bailout would work + earn the treasury $100 billion long term, would you support it?

[HamdenRice]

I realize that probably most don't believe that the bailout would work or make money for the treasury. I'm not asking whether it will work and earn money or not.

I'm really trying to understand DU sentiment in small increments, and understanding whether people would support it even if it were guaranteed to work is part of gaining that understanding.

If you don't think it will work and/or don't think it will earn money, I understand. That's a very reasonable position. I don't know whether it will or not. But I would respectfully ask that you post arguments in favor of that position -- that it won't work -- in different threads. Pretty please with sugar on top.

Here, I just want to know how you would feel if you were convinced it would work and make money for the federal government.

[seemslikeadream]

1. How could we know this?

[HamdenRice]

4. I would rather explain/debate that elsewhere. Please read the OP

especially where I said "pretty please with sugar on top."

[bemildred]

2. What does "work" mean?

And nobody knows if it will "work", regardless of what "work" means. This is after all an unprecedented situation, so nobody has any experience with it.

These are the same guys that aided and abetted the creation of this mess now offering us their "solution". What if their real goal is to make the mess deeper?

[Raksha]

3. Yes, if I KNEW it would work. If I were convinced

it would make make things better instead of worse. So now convince me.

[shadowknows69]

5. How about earn the treasury 800 billion in the long term

Then we can talk. Thought this was an "investment" in our future. Losing 600 billion doesn't sound like a very good buy to me.

[HamdenRice]

7. That's what I meant. $700 b paid back plus $100 b profit nt

[shadowknows69]

8. Got ya, I thought that after I posted. Sorry.

[stray cat]

6. Its still a loss of 600 billion.....

[HamdenRice]

10. Earn means profit in addition to payback. See post 7 nt

[Warren Stupidity]

9. Depends on the terms of the bailout.

For example, if as part of the package taxpayer money ends up subsidizing multi-million dollar payouts to corporate executives, I'm not interested.

If there is nothing done to help the people losing their homes - if it is a bailout for billionaires only, I'm not interested.

If nothing is done to re-regulate the mortgage industry and separate it from wall street, as it was before 1998, I am not interested.

They cannot just establish the new rules for their free market fundamentalist nonsense as: private profits, socialized losses, and that is what they appear to be doing. Instead there has to be a consensus, as Obama pointed out last night, that regulation is required, that the era of deregulation is over, that this experiment is EPIC FAIL.

[On the Road]

11. I Would Support the Bailout

if the net effect were limited to $200-250B. Which is where I expect it will be.

[HamdenRice]

13. This poll posits a net positive gain of $100 b -- ie $700 b paid back + $100 b profit nt

[On the Road]

16. RIght, I Understand That

The poll seems to be based on a perception that a bailout that costs taxpayers money or broke even would not be popular on DU (which is probably true). I'm just saying that I believe stabilizing the markets and avoiding more serious bank failures is worth a cost.

[Beam Me Up]

12. IS there a legitimate crisis or not? That's what I want to know:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x4103567#4104680

If the fed has pulled out 125 billion in the last four days, what the hell is going on??

[MadrasT]

33. Yeah, that's where I am. I'm not convinced that the whole thing

hasn't been engineered. I used to trust everybody. Now I trust no one.

Except maybe Barack

Edit to add: and that's why I've been 100% behind Obama since the primaries. If he ever lets me down... fuck it, I'm giving up for good.

[MadHound]

14. If it wouldn't lead to high inflation, or downgrade US treasury bonds, sure

But that's impossible, since as soon as we lay down that money, both of those situations are going to occur. Already we see the value of the dollar dropping again, and already one commercial trader downgraded bonds earlier this week(though this isn't an official downgrade, it is a sign of things to come if we do go ahead with this bailout). <http://financialtrader.com/Bond_Investor.html>

If you're hypothetical could occur under those specific conditions, sure, I would support a bailout. But since we don't live in a fantasy land where real market fundamentals are suspended, then no, I'm not supporting the bailout. I believe in living in the reality based world of economics, and in that world, if this bailout goes through, no matter the timing of payments, the oversight, etc., just the sheer simple fact that we're laying out a trillion dollars, I can't support the bailout. It will bring ruin and disaster to this country that will be much worse than any depression we've seen.

[HamdenRice]

18. I'm quite sure you are wrong (as explained before) but don't want to debate that here nt

[La Lioness Priyanka]

15. yes, on jon stewart bill clinton mentioned how if we stipulated the terms of the loan

the money could earn us money. in that case, ofcourse i would support it.

though i still think its tragic that we have come to the point that the middle class is holding up the wealthy

[HamdenRice]

19. Bill was right. Hillary was prescient months ago about mortgage relief nt

[girl gone mad]

39. Both of them supported policies that helped..

get us into this crisis, unfortunately.

[sojourner]

17. expecting that i'm in the minority, BUT

i am disgusted with the concept of bailing out big business and big money makers at the risk of tax payer monies. if and when the powers that be value the business man on main street, the struggling elderly couple, and offer THEM a "bail out" then maybe, maybe i'd feel differently. purely emotional reasoning...but coming straight from someone who has had a gut-full of watching the effects of unchecked corporate greed and excess over the past three decades.

[JackRiddler]

20. But the opposite seems to be a certainty.

The short answer is no. The long answer is, what makes you think there's any chance of what you are saying?

Analogy: If I knew that an invasion of the Bahamas would earn the Treasury billions in the long run, I wouldn't support that either, because such a war is wrong.

Similarly, rewarding crooks is wrong in itself, and furthermore encourages them to be even more crooked in the future.

Looking at this more practically, however, it's a certainty the bailout will be disappeared by said crooks. No safeguards are going to prevent circumvention, once the money and the effective authority is in their hands.

The government will get trash for cash. If the banks have any say in it (and I think that's the point of intervening before they file for bankruptcy, and letting Wall Street consultants make the determinations), they will not unload any good assets. It will always be the junk first, second, and usually last. They will unload secondary and tertiary vehicles that they know will fail.

And what do you think they will do with the cash? They have already demonstrated what, leading up to this point. They will pump it back into new derivative scams, new bubbles: or disappear it. They will find ways to siphon off rewards to themselves that are no longer announced as bonuses and rewards, but are still rewards.

Thus I believe the bailout will serve to make a worse crash in the end. It's the Hoover 1931 model.

In addition:

1) This is the kill-shot to the dollar, and to any remaining illusion that the US government will remain solvent much longer.

2) The threatened foreclosure and bankruptcy wave and great depression are inevitabilities. Nothing to do with whether anyone "wants" them at this point. The bailout is likelier to make them worse rather than better.

[HamdenRice]

22. The yield on treasuries is effectively zero

That means a global flight to purchase dollar denominated tbills. That indicates the exact opposite of a kill to the dollar.

[JackRiddler]

29. Hey now, is that really a global fight for T-bills?

Or is it the predictable and temporary product of a flight from Wall Street to the paper considered slightly more secure than what's offered on the NYSE at the moment?

Where can we see who's buying T-bills, and how can we tell how much of that is coming straight from sold equities?

Also: Remember, the bailout hasn't happened yet. An additional $700 billion hasn't been injected into the casino yet. That will be presumably raised by selling T-bills, before sucking it out of the taxpayers.

Honestly, are there provisions to make the bailees invest their latest windfall responsibly? And if so, why doesn't the government just put the money straight into these responsible investments, use that to maintain liquidity, and let the failed crooks go down?

[girl gone mad]

40. I've had my money in treasuries..

but I'm steadily moving out of the dollar. Now that the bill appears to be a done deal, inflation is inevitable.

[varelse]

21. No, I would not

We'd be raising the debt ceiling of the Federal goverment by a trillion dollars when our government's debt burden is one of the biggest threats to our economy and our standing in the world, in exchange for less than one sixth of this country's current annual military budget, to be expected over *what* time frame? You don't specify that in your hypothesis, but if it's longer than two years, then... I could see it being a disaster for the Democratic administration that is likely to be in place at the time, and a clear win for "conservatives" in the next election cycle.

Not to mention the risk of hyperinflation making those 100 billion dollars worth less than the material they're printed on, by the time they come a-tricklin' in to the Treasury...

NO.

But I *do* support this plan: http://www.sanders.senate.gov/issues/crisis.cfm

[Giant Robot]

23. I give you a big fat maybe

I don't just want to earn money. I want the money to go to something useful. If $100 billion comes back, the government will just fuck that up and throw that money into Iraq or some stupid shit. If the money is earmarked(a big screw you to Senator McCain there) to something positive, like help with housing, health insurance, etc., I would go for it. But just a lump sum with no strings attached, no, I guess not.

[coalition_unwilling]

24. Before I vote, to which "bailout plan" do you refer? Are you

referring to Paulson's original "blank check" proposal, to the Pelosi-Reid plan, or to the general principle of government intervention in the financial markets?

No to the first (bc of no accountability), yes to the latter two.

[HamdenRice]

25. Pelosi-Reid nt

[coalition_unwilling]

28. Then I definitely would support, even if

a profit were not guaranteed.

Government has an absolute responsibility to ensure the orderly functioning of markets, i.e., provide liquidity.

Pelosi-Reid is adult, bc it includes a strong dose of legislative oversight, something conspicuously absent in Paulson. It's not Pelosi's or Reid's fault that most Americans are economic morons.

[WA98296]

26. Define "Long Run"

[NuttyFluffers]

27. 100% guarantee of averting crisis AND make a profit? uh, yes. and i want a pony, too.

if wishes were fishes, i'd be a daydreaming fisherman. a market based on risk, all about speculating on futures, and we're talking about imagining "sure things"? well, yeah, i guess anything makes sense at some point in a crisis... best of luck trying to find utility in this thought exercise.

[coalition_unwilling]

31. I think the OP was up-front about

his purpose, i.e., to get a read on the DU "mindset" toward the idea of a bailout, subsequently specified as the Pelosi-Reid plan.

Ask yourself this: should government intervene to ensure the orderly functioning of markets?

[NuttyFluffers]

36. re-regulation and bailout and bailout as successful solution are all different discussions.

conflating them all into an imaginary successful scenario is a pointless exercise for everyone involved. it requires a logical leap that is as fanciful and productive as me wishing for a pony and expecting to get it.

[coalition_unwilling]

41. But what if your intent is to

get a read on the mindset of today's progressives on the wisdom (or lack thereof) of government intervention?

I think this is what the OP was really after, but perhaps we will have to let him or her respond?

[sendero]

44. "intervening"..

.. is one thing. 700 billion dollars is another.

Please don't compare the kind of intervention that should have been done years ago with this turkey.

[tkmorris]

30. This is an absurd question, designed to unduly influence

For starters, if that were the case you wouldn't NEED a govt bailout because private investors would be climbing over themselves to inject cash.

I also object to your attempt to limit the scope of the debate on the question. You don't get to decide what people discuss, even on your own thread, and that is at it should be.

The bigger problem is that the question is ridiculous. You could just as lief ask if the bailout were to produce rainbows in the skies every day for a year and make all our cars get 10 extra MPG if we would support it then. Being a completely mythological situation, answering it is an exercise in belly button gazing and little more. It's not a hypothetical, hypothetical presumes it COULD happen. This cannot, and will not. Your request that we not take that into consideration is denied, and I'm insulted that you would ask such.

[HamdenRice]

32. All you are saying is that the OP is an impossible outcome

Do you have any evidence it's not a possible outcome?

[NuttyFluffers]

37. that is not what you asked. you asked us to presume its success was a given.

anything is possible in the future within the realm of probability -- but so what? you are asking us to suspend belief that risk does not exist in this solution and frame the discussion, conflating various topics into a fanciful hypothetical (edit, more appropriately termed is really "mythological" but that credit belongs to another), to get an explicit answer of agreement for a deeply complex and multifaceted crisis. is that remotely fair, or even useful? why are you bothering with this tactic?

[BlooInBloo]

45. It's impossible that an arbitrage opportunity of that magnitude exist for any discenible length...

of time.

I don't have time to teach you the math that backs that up.

[NuttyFluffers]

38. thank you.

i am glad i am not the only one who felt this way

[Trillo]

34. I voted I would support it, but,

my hard-won and expensive indoctrination says that the Federal Government shouldn't be in the profit-making biz.

[HamdenRice]

35. kick for sample size from evening crowd nt

[sendero]

42. Yes I would..

.. too bad I'm 95% certain that it won't.

[Junkdrawer]

43. If I knew Santa Clause would remove Global Warming, would I buy a Hummer?

Nah, it would still cost too much to drive.

[Gormy Cuss]

46. Probably not.

How does this 100B return compare to other Treasury investments? How does it compare to the profits reaped by the bunch of greedy, arrogant bastards who got us into this financial mess?

Recognize that I am firmly in the camp that agrees that there is a need for a bailout. I just would be happier to see pain inflicted on those who have been making money hand over fist while laughing at the little people. I'd love to see a clawback of all bonuses and deferred compensation garnered by the top tier of management at the failed and failing institutions, but that's just me.

[ThomWV]

47. I have no objection to partial Government ownership of what are normally private enterprises.