In fact, the $700 billion bailout will only do harm to the middle class.
Ronald Reagan said, “Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it”.…
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26 - STM
Problem is, they HAD to do it, because if they didn't, the entire global economy would have collapsed in an instant.
You don't think governments actually enjoy handing over their (your) hard-earned to prop up private enterprise, do you?
They'd much rather they didn't have to.
The only people who've sold you out are the idiots who caused this crisis in the first place, and they live(d) on Wall Street in New York and in the gilded streets of the City of London.
27 - roger nowosielski
The question is: Where is Dave Nalle when you need him?
28 - Dave Nalle
In an instant, Stan? The entire global economy depends on GM and AIG? Look up the stats. AIG is a big company, but there are many bigger and if it disappeared today there would be nary a ripple in the market. In fact, I'd bet the market would go up if AIG went down once and for all.
Dave
29 - roger nowosielski
Dave, Do check in on the other thread, please. This guy, name Turbo, has a question about BC.
30 - roger nowosielski
May be not in an instant, Dave, but it was more than a ripple. Broke 7000 level today because of that. And its free falling.
31 - STM
Dave: Not true. AIG had huge exposure to toxic debt, mainly through Wall Street's idiot credit default swaps concept and the mortgage-backed assets house of cards that was collaterailised debt obligations (CDOs).
That means the tentacles reach through to many other places, right across the world. This toxic debt is multiplied a million-fold.
With respect, sometimes when I hear Americans saying these things, I worry that they don't understand the real nature of this crisis and how serious the issue of toxic debt really is, and how it just won't go away by letting companies fall on their arses.
The domino effect of such collapses would be profound across global financial markets that are already struggling.
Simply, the collapse of AIG would have been an absolute disaster for the global economy.
The US government did nothing of note at the start of the Great Depression, and you know the result. At least this time it's had a go - and all governments have had to tread a similar path, armed with the lessons of history, and they're following the advice of people who probably know a lot better than you or I.
32 - roger nowosielski
AIG.
33 - roger nowosielski
Well, it's the Yankee denial, STM. We can do no wrong.
34 - STM
Also, economies depend just as much on "little people", workers with jobs, spending their pay packets and keeping that money going around.
It's even down to really simple stuff, like buying your lunch or a morning coffee at a diner instead of taking a sandwich, because even that small amount of spending keeps another half-dozen people in work. Take a sandwich too a couple of days a week, because that helps the breadmakers and the pork industry, but you get my drift, right?
You see it in small communities: one set of jobs go, at a factory, say, and then all the others around it start to go.
The government here has been handing out fistfuls of cash to families to encourage them to keep spending, and it's led to substantial retail sales growth over December and January, which is the key to all this: growth, rather than decline.
They've been handing out up to $21,000 to first home-buyers, and the mortgage market is now booming, which will spin off into the building industry. That kind of stimulus is the type of thing that's also being done with infrastructure both here and in Europe and the US.
In the case of GM, say, it's many thousands of jobs around the world that are at risk - although GM Holden in Oz, like Ford Australia, has been a very profitable operation.
The US no longer exists in a vacuum and what affects you there affects everywhere else, and vice-versa. This is the frightening thing about this crisis.
However, as I'm not lining in the US, I can only speak from our situation regarding jobs. Should those two companies start shedding jobs in a big way, that would be a disaster.
Every company that goes under is also no longer contributing its tax dollars to the government's coffers, along with the taxes of its employees, and that's bad too.
You just can't run a country without 'em.