Financial Meltdown (10 Viewers)

[Njja]

Thank you, I appreciate your comments, and interest in this subject.

 

[Louis Badolato]

I just want to know how to get on the list of people whose debts are scrubbed under this bailout plan! I pay my bills every month, but if I didn't have to, I would have a lot more money for toy soldiers!!

 

[theBaron]

I have to get a new slave cylinder for the clutch, a windshield and driver's side rear view mirror, for my truck, about $1100 by the time it's all done. I'm thinking of asking Congress for a bailout.

 

[Spitfrnd]

While this an important subject to our financial health, I'm not sure a toy soldier forum is the best place for this kind of discussion.

Then why have a miscellaneous section? There may be some excess of exuberance and hyperbole in some of the remarks but it is harmless. Like other forums, this is a community of people who have some common interest and certainly that interest is affected by this issue, short term, long term or whatever.

 

[Louis Badolato]

I have to get a new slave cylinder for the clutch, a windshield and driver's side rear view mirror, for my truck, about $1100 by the time it's all done. I'm thinking of asking Congress for a bailout.

Why think small Brad? Over the years I have paid way more in taxes than my total mortgage. I'm sure you have too. If the government is paying off mortgages with our tax dollars, why not our own!

 

[theBaron]

We should swtich from being Type A's to Type B's, give up our jobs, and go on the dole. If there's anything we should have learned since 1929, it's that someone else will do it for us.

 

[theBaron]

Seriously, though, underlying these news stories, and other current events stories, there is always an element of someone shirking responsibility, that goes against my grain. My parents taught me to take responsibility for myself, for things I do. It's the flip side of taking credit for things, too, and it's part of being an adult, in my view. I am continuously astounded how many people of adult age act like petulant teenagers.

 

[1879fanatic]

Seriously, though, underlying these news stories, and other current events stories, there is always an element of someone shirking responsibility, that goes against my grain. My parents taught me to take responsibility for myself, for things I do. It's the flip side of taking credit for things, too, and it's part of being an adult, in my view. I am continuously astounded how many people of adult age act like petulant teenagers.

Sums up the current philosophy of living to a "T", Brad. How could this have happened without a change in national psyche? The only jobs left will be cushy GOV jobs, law enforcement and landscaping for the really wealthy
Mike

 

[theBaron]

I don't think this is what the Founders envisioned. Most of them were hard-working, self-made men, who understood the value of work, whether to put bread on the table, or to better oneself.

Dean Wormer's observation is apt: "Fat, drunk and stupid is no way to go through life, son."

 

[Gideon]

Its a scary time, I'm shocked when I hear these "Experts" talking about

bailing out credit card, car loan, and stopping foreclosure actions against

people failing to make home payments.

What about the rest of us?

Are we just suckers?

You pay your bills........and now you are going to pay someone elses credit

debt?

Time to contact your senators they are easy to reach by phone and email

and tell them you do not support this nonsense.

If you get up tomorrow morning, and go to work.......and don't speak up on

this matter what are you thinking?

This is no time to say......whats the use.

Its either speak up, or you might as well quit paying for anything and charge

up to your eyeballs and stick your hand out with the deadbeats.

Problem is.......someone working is going to have to foot the bill for this

nonsense.

The real shame is they think nothing of telling us Social Security is going

broke.......after we have paid into it for 4 decades.......but some stiff in a

house he can't afford....with maxed out credit cards driving a $50,000 car

needs help NOW!

I guess its partly our fault for sending idiots to Washington.....what were we

thinking?

This money was bogus and the real money paid out went to executive bonuses and packages, hirings, golden parachutes, etc. This is part of what I hear when I watch the hearings on the "bailout".

I think these bonuses, packages and golden parachutes should be paid back into the "system" and much of that used for what ever "bailout" is agreed upon.

I don't want to foot any part of this - I shouldn't have to as I have lived within my means, I don't own any property (but I'd like to), I bought my car with cash outright (it is used) and I generally spend very little on myself.

But, I do add a small business to the economy and I do my best with that. Why should I have to bailout people who couldn't afford their homes who got greedy, middlemen and Wall Street, Financial and Insurance execs pay packages???

 

[Njja]

We should all be outraged! To suggest that we shouldn't perhaps discuss it

under the miscellaneous catagory is unbelievable.

Unfortunately, nowdays it seems people tend to stand by and do, and say

nothing. That is really not a good idea at a time like this.

I had hoped it would resolve itself with the initial influx of capital.

When I hear them suggesting buying up the bad credit card, and auto loan

debt its time to put our foot down and say NO.

Unless we all plan to be greeters at Walmart to pay off someone else's Rolex.

 

[Spitfrnd]

Seriously, though, underlying these news stories, and other current events stories, there is always an element of someone shirking responsibility, that goes against my grain. My parents taught me to take responsibility for myself, for things I do. It's the flip side of taking credit for things, too, and it's part of being an adult, in my view. I am continuously astounded how many people of adult age act like petulant teenagers.

I would agree. Accountability has been going south for some time now. I am inclined to blame pseudo liberals and plaintiff trial lawyers that have been trying tirelessly to idiot proof our society to the point of absurdity. "Gee I burned myself when I spilled my coffee, let's sue McDonalds" or "Ooooh, I mashed my fingers when I slammed the car door on them, let's sue GM for failing to warn that a car door is a dangerous thing." I don't mean to detract from the immediate concern over bailing out people that should have known better but it is a simply the latest example of a society that seems increasingly to believe no one should have the risk or failure or "god forbid" injury. Sorry for the minor diatribe but every time I hear a talking head whine about the need for new regulations to protect the stupid, or because banks are bad since they want to make more money, I get a little twinge. Now when the offense rises to the level of a financial weapon of mass destruction, as my friend Warren has noted, some more specific control may be appropriate, assuming of course that we can expect some common sense in the implementation.

 

[nmrocks]

Spitfrnd,
I think your point is well taken, America is a land of EQUAL OPPORTUNITY, not equal outcome. People seem to confuse the two, while I'm not the most successful man in american material terms I never ever blamed anybody but myself. I made my best choices based on circumstance and my own selfish interests. Too many people are disapointed with life because they are always looking at what everybody else has and ignoring the goodness in there own lives. Choose what you have and you will be happy, in reality it is exactly what you did.
As for this discussion, we should all as people discuss what is important in life with those we respect and share commonalities with. I have always found the opinions intelligent, inciteful and entertaining, even if I don't agree with them.
Ray

I would agree. Accountability has been going south for some time now. I am inclined to blame pseudo liberals and plaintiff trial lawyers that have been trying tirelessly to idiot proof our society to the point of absurdity. "Gee I burned myself when I spilled my coffee, let's sue McDonalds" or "Ooooh, I mashed my fingers when I slammed the car door on them, let's sue GM for failing to warn that a car door is a dangerous thing." I don't mean to detract from the immediate concern over bailing out people that should have known better but it is a simply the latest example of a society that seems increasingly to believe no one should have the risk or failure or "god forbid" injury. Sorry for the minor diatribe but every time I hear a talking head whine about the need for new regulations to protect the stupid, or because banks are bad since they want to make more money, I get a little twinge. Now when the offense rises to the level of a financial weapon of mass destruction, as my friend Warren has noted, some more specific control may be appropriate, assuming of course that we can expect some common sense in the implementation.

 

[4th Hussar]

When I hear them suggesting buying up the bad credit card, and auto loan

debt its time to put our foot down and say NO.

using tax dollars to buy up bad personal debt is really using tax dollars to buy votes - something incumbants have been doing for years

 

[nmrocks]

Frankly, I think we ought not to do the bail out and take our lumps now instead of dumping it on our children, after all it's our mess.
Failure is nearly as important as success, it shows us what doesn't work.
That's why communism doesn't work, your not allowed to fail or really to succeed. What we had set up doesn't work and if we give a free pass to all who were part of the failure they learn nothing except to do it again, it will work out somehow.
Besides the Gov't wants to bail out anybody or any company, any type of debt or obligation WITH TOTAL IMUNITY FROM CRIMINAL PROSECUTION.
Now I wonder why they think that is important?????
I see we loaned 30 Billion dollars to foreign banks last night.
Ray

 

[theBaron]

Some interesting observations (essays) on this story:

http://townhall.com/columnists/WalterEWilliams/2008/09/24/scaring_us_to_death

http://townhall.com/columnists/ThomasSowell/2008/09/23/a_political_solution

http://townhall.com/columnists/ThomasSowell/2008/09/24/a_political_solution_part_ii

http://townhall.com/columnists/NealBoortz/2008/09/19/the_rest_of_the_meltdown_story

http://townhall.com/columnists/JohnStossel/2008/09/24/what_happened_to_market_discipline

These are opinion pieces, of course, but the authors are all relatively sober men of judgement. Well, Boortz is a bit of a hot dog, sometimes, but I wish I could go back to school just to take Dr. Sowell's courses.

Prost!
Brad

 

[Canadian Samurai]

I pretty much agree with you guys on this point. Here's the problem though, and I'd be interested if you could come up with an alternative solution: How exactly do you fix an economy (and this is all over the Western world) that is basically drowning in debt? Where the amount of personal, corporate and in some cases government debt continues to rise every year? Where it's getting so bad that everyone is basically in debt to one another, to varying degrees? It has created a house of cards that is in danger of mass implosion.

In my mental justifications for not paying off my credit card every month, I had actually thought about the possibility that one of these days some genius will say: "let's fix this by forgiving everybody's debt!" (people have already suggested we do this with poor third world countries). It does sound kind of crazy but how else do you fix this epidemic of debt which is crippling our economies? Someone here will say "work harder" but I don't think that will be enough, not at all. With the economy slowing, there's no way people will be able to earn enough money to pay it off themselves anymore, they'll be hard pressed just to keep up with paying the interest.

Keep in mind if we have another great depression (caused in part by this debt situation), millions of people's debt will be forgiven anyway when they start declaring bankruptcy on mass. So better to do it ahead of time, right? So a solid foundation can be built for the economy other than mass debt? Maybe we (society) do need to look beyond getting back our pound of flesh and think what is in the best interests of the whole system? That's the argument for some of these proposals, not saying I agree at all.

 

[theBaron]

Another essay, today, from George F Will:

http://townhall.com/columnists/GeorgeWill/2008/09/24/like_lemmings_toward_a_cliff

"Throw the ball, George!" (anyone know the reference?)

 

[Spitfrnd]

I pretty much agree with you guys on this point. Here's the problem though, and I'd be interested if you could come up with an alternative solution: How exactly do you fix an economy (and this is all over the Western world) that is basically drowning in debt? Where the amount of personal, corporate and in some cases government debt continues to rise every year? Where it's getting so bad that everyone is basically in debt to one another, to varying degrees? It has created a house of cards that is in danger of mass implosion.

In my mental justifications for not paying off my credit card every month, I had actually thought about the possibility that one of these days some genius will say: "let's fix this by forgiving everybody's debt!" (people have already suggested we do this with poor third world countries). It does sound kind of crazy but how else do you fix this epidemic of debt which is crippling our economies? Someone here will say "work harder" but I don't think that will be enough, not at all. With the economy slowing, there's no way people will be able to earn enough money to pay it off themselves anymore, they'll be hard pressed just to keep up with paying the interest.

Keep in mind if we have another great depression (caused in part by this debt situation), millions of people's debt will be forgiven anyway when they start declaring bankruptcy on mass. So better to do it ahead of time, right? So a solid foundation can be built for the economy other than mass debt? Maybe we (society) do need to look beyond getting back our pound of flesh and think what is in the best interests of the whole system? That's the argument for some of these proposals, not saying I agree at all.

As in most things, it is a matter of judgment and degree. There is nothing per se wrong with debt; either lending or borrowing. Used correctly debt is nothing more than an transactional facilitation instrument. It enables those who have money now to essentially "rent" or "loan" some of it for a price (interest) to those who expect to have more in the future so they can purchase goods at todays price and for todays purposes. Without debt, modern society would not have been possible. It may be remembered that debt (and overspending) is not new or exclusively western. It has been around as long as transactions have existed and probably predates the idea of money itself.

So does that mean that it is fine for all to acquire debt that have no reasonable ability to repay; of course not. That is where the degree and judgment comes in. In the market and historically, lenders did not extend credit to those consider poor risks except at vary high rates of interest; hence the practice of loan sharking or earlier, usury. This concept applies equally to individuals, businesses and governments. Of course governments can cheat but in theory that would be reflected in their interest payments and even now, typically is. So what happens when someone has too much debt? As you note, in western societies generally they declare bankruptcy and start over. (Of course, those who borrow from the wrong people face different consequences) Is that an acceptable solution; well it is a compromise that has and should work. The lender loses to the extent he was imprudent enough to lend to someone who was a poor risk. As for insurance, short of a major sector dislocation, as we have here someone, that risk can be hedged with balances of good and bad borrowers. Now the borrower loses to the extent that his credit is trashed and all but his essential possessions are forfeit. While there are some few who play the game, most people do not find bankruptcy a pleasant experience. If the
lender makes too many stupid loans, short of bailout, he will disappear. If the borrower makes too many stupid borrowing decisions, after several bankruptcies he may find life not so good.

That is the way it has always worked and in theory the process should be self correcting if there are excesses. When and will that happen here, hard to say but I think the metaphor drowning in debt is a bit over stated. I rather believe that there will be some shakeouts and, as now for housing, lenders will get more conservative for a time until the process repeats. Of course we could legislate credit limits, debt limits, security limits or whatever but I for one don't particularly feel the need for that. I also see no need to forgive anyone's debt that was not defrauded. Frankly, I think those cases are relatively few. As to the bailout generally, the only justification I can find for it is to protect against a general economic loss of confidence that would unfairly punish everyone in the economy more than any reasonably expected cost. I do prefer the insurance option proposed by some academics to the Treasury plan however but there is a real tangible value in avoiding a true credit / lending collapse; if that happens, you will get your depression and the jobless rate will go through the roof.

 

[nmrocks]

Brad,
What a great site, thank you for turning me on to it, I've put it on my favorites.
A breath of fresh air, cause all I've been smelling is BS!
Ray

Some interesting observations (essays) on this story:

http://townhall.com/columnists/WalterEWilliams/2008/09/24/scaring_us_to_death

http://townhall.com/columnists/ThomasSowell/2008/09/23/a_political_solution

http://townhall.com/columnists/ThomasSowell/2008/09/24/a_political_solution_part_ii

http://townhall.com/columnists/NealBoortz/2008/09/19/the_rest_of_the_meltdown_story

http://townhall.com/columnists/JohnStossel/2008/09/24/what_happened_to_market_discipline

These are opinion pieces, of course, but the authors are all relatively sober men of judgement. Well, Boortz is a bit of a hot dog, sometimes, but I wish I could go back to school just to take Dr. Sowell's courses.

Prost!
Brad