Quote:
Originally Posted by Dollarmansteve
Id just like to point out that no one is "giving" 700B to anyone. The government is proposing becoming a "market maker" or buyer-of-last-resort for distressed assets (ie high-risk securities backed by not-so-great mortgages).
If it saves the system, the long term benefits far outweigh the short term ramifications. I don't think anyone wants to live in an illiquid economy, that means ONLY the rich will have anything. If businesses don't have easy access to credit, the first thing they do is fire people. If people don't have access to credit they don't buy homes or cars or appliances.. or anything other than the basic necessities. But lots of people wouldn't be buying anything since they would be unemployed.
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The market should fall so we can see what it's real value is. If the market wasn't already filled with fake assets, bids, ect - inflation would be much more under control and we could deal with this bailout at a much more logical level.
We did fine in the 80s when nobody was buying shit on Credit since the interest rate was through the roof. We still had growth through the 80's even though we had a few mild recessions.
An Economy that has to survive on credit isn't doing so well, credit is what caused this problem. 99.9% of the people that did get a loan business or personal, wouldn't have qualified for the same loan with the same credit, 10 years before, or even 5.
Companies don't need loans, what they need is to not be taxed 35% on the money they bring into the Country. Who wants to open a business, move 1B over and be taxed 35% just to start a new business? Nobody.....