Help me understand the bail out plan??

[smacky1]

Im sorry but I am very confused about this proposed bail out plan?? I keep hearing its tax payer dollars......but it just doesnt make sense to me?? If we have a deficit already, where is the 700 billion coming from?? Is this just driving us further into debt......and isnt this how we got in this mess to begin with?? Im watching the debates as we speak and still dont feel like I have the answers to help me understand it all. Im trying to be informed, but boy do the politicians make that difficult sometimes. I just want the facts....please help me understand this.

 

[smacky1]

I just found a thread on this a few pages back. Not sure how to delete this question. Thanks.

 

[MKCP5]

it will b borrowed-------your childrens childrens grandchildrens children will still be paying it off

 

[bdcp]

We have to wait til there's an actual plan agreed on to know what it exactly means. But, the short version is, those of us that pay taxes, pay our bills, etc are bailing out those that don't. I don't like the idea of basically nationalizing, but it looks like that's how it's going even though it's technically just a loan. We "got here" because of some very bad decisions made more than 15 years ago with lenders being required to make loans to low income and minority groups based solely on their inability to get loans like the rest of us. Don't let anyone tell you this is something the Bush administration did, because it isn't. This is the result of the government getting involved years ago and forcing lenders to take on high risk loans.

 

[MrsPete]

I keep hearing its tax payer dollars......but it just doesnt make sense to me?? If we have a deficit already, where is the 700 billion coming from??

My best guess: China.

Seriously, think about it this way: If you in your own personal life were completely broke, and you wanted /needed to buy something, how could you buy that something? The answer is probably a credit card. Of course, you'd have to deal with the bill when it came due, but you COULD buy that item that you want /need. Our government can do the same thing -- they can borrow today and worry about the bill (or let our children worry about the bill) tomorrow.

But, the short version is, those of us that pay taxes, pay our bills, etc are bailing out those that don't.

It's also saving pensions and 401Ks for millions of people who DO pay taxes. This is a no-win situation.

We "got here" because of some very bad decisions made more than 15 years ago with lenders being required to make loans to low income and minority groups based solely on their inability to get loans like the rest of us.

While there's some truth to what you're saying, it isn't like the poor victimized banking industry sat back and said, "Oh, woe is me." Rather, they were eager to sell mortgages and credit cards to people who weren't likely to be able to pay because they made huge profits from these deals.

Also, the American public has to accept a good bit of blame for buying into the idea that living beyond one's means is an acceptable thing.

We can't point our fingers at any one thing and say, "This is the cause of our problems." Rather, it's a combination of things that've been coming for a while.

 

[meriface11]

i am no economist, and i am fortunate enough at that this moment (who knows what could happen tomorrow), my job and income isnt being impacted by what is happening on wall street. but without some sort of intervention, the banking industry is in extreme risk, and lending standards, not just for people, but for businesses that require a general amount of lending to operate. without available credit, businesses won't be able to operate, people will get laid off, people won't have money to spend on anything, much less luxuries, so that will have a trickle down effect--no money to buy houses--real estate will be even further impacted, and the values of homes for all of those who do pay their bills will go down even further. all americans saw the advantage of "cheap" credit that's been available for the last years...not just high risk credit cases. we got lower interests on our low risk mortgages, our credit cards, our cars (in the 70's my parents paid close to 20% interest rate on their home!). products we buy every day have been cheaper because the companies that make them had access to cheap money. while i am not happy about the bailout and the prospect of having to pay higher taxes, without a fix, we are all looking at the potential for financial ruin. i'd rather pay a few thousand more in taxes every year and know that i have a job, a 401k that has more money than i've put into it, and if i ever need a loan, i'll be able to get it.

 

[heartbeeps]

Im sorry but I am very confused about this proposed bail out plan?? I keep hearing its tax payer dollars......but it just doesnt make sense to me?? If we have a deficit already, where is the 700 billion coming from?? Is this just driving us further into debt......and isnt this how we got in this mess to begin with?? Im watching the debates as we speak and still dont feel like I have the answers to help me understand it all. Im trying to be informed, but boy do the politicians make that difficult sometimes. I just want the facts....please help me understand this.

what's to understand...
the bottom line... if we DON"T DO IT, the Great Depression will have been the SECOND WORST thing to happen to the US economy (as this will be horrific - foreign investors pulling their money out of America which in turn will cause businesses to cut back which will cause Americans to lose their jobs which will cause more Americans to lose their jobs because others lost theirs and aren't spending money and it's a vicious cycle).

Do I like it? ABSOLUTELY NOT! But doing nothing is not an option! I only hope they can put some constraints around it so that $700B is watched over as it's dolled out - no stealling from the pot!

A depression is NOT an option.

this should be very interesting! (understatement)

 

[momxx5]

The whole thing is freaking me out.

DH's 401K, which is not a whole lot and is the safest investment category is losing more and more each quarter. Those who he works with, older and putting tons more into retirement fund and really feeling the effects.

Right now things are extremely tight around here and I am on a job search (that must accomodate school hours - 5 kids paying daycare and extras is crazy).

It is literally making my stomach sick every morning I wake up.....the thoughts of paying bills, buying groceries, paying for kids school expenses, DS need new sneakers and DD need a winter coat.

I do have a lot of blessing and am very grateful for what I do have. Its the rest of the things that keep me worried.

sincerely,
certified self admitted worry-er.

 

[daleswife]

Its just that....tax payer dollars....OUR MONEY....going to bail out idiot banks who made people who could not afford adjustable rate mortgages think they could afford it and now we have to give our hard earned money to them and to their CEO's who will walk away with millions of dollars even though Obama and McCain say they wont....BS. Everyone will profit from this except the american people......We will be screwed again!!!

 

[rapmarks]

there is a very good discussion and explanaton on the Tug bbs on this topic. www.tugbbs.com

 

[IDoDis]

What Bush is guilty of, is not foreseeing this problem looming on the horizon a few years ago. Bush and the Republicans are against government regulation (one of the biggest platforms of the Republican Party) which means that the lenders have a lot of freedom to make as much profit as they want, even though they knew the bottom would fall. The right-wing theory of economics is to let the cards fall where they may and the economy will naturally fix itself. McCain said that with maybe a little cheerleading, big business can sort out the crisis and that Congress should not try to regulate their behavior. He said over and over again that "the fundamentals of our economy are strong."

http://www.youtube.com/watch?v=8kqbnEx5SDw

What a bunch of bunk. It doesn't work, just like it didn't worked with the big oil companies. The CEO's line their pockets with millions of dollars, they give huge amounts of money to political parties, and it's the working class that suffer with higher prices in goods and services.

The plan to offer affordable housing loans would have worked if it was regulated. THAT'S where the problem lies. It's not just poor people who overstepped on their credit. This is a problem that spread to all income areas. We have become a nation of greed wanting more and more and with easy credit and no regulation, the house of cards was eventually going to tumble.

The money for the bail-out plan will be borrowed and will add to the largest budget deficit in the country's history (it was already the largest deficit before this happened).