To Bail or Not to Bail...

[OuTk@sT]

Sometimes epic failures like this are required to reset the old ways that no longer work and help to usher in new ideas that are more applicable in these times.

Weather the storm.

 

[agilefalcon16]

LOL, Obama visited my city to try to sell this stimulus idea today. While I'm still skeptical about it truely being able to fix the economy, I say that it at least deserves a shot. It's supposed to create a LOT of new jobs, so at least that's a plus.

Now on a side note, I got to see Obama today!!! I am so happy. :D

 

[XDaiKonX]

Someone did the math, if you take all the money that went to the car companies, and split that to every american 18+ years old.
Everyone would recieve $200,000
That is ridiculous. I'm happy with my $250 dollar tax return lol.

 

[Marginal]

Completely disagree... the economy is a living entity, if you leave it by itself, it will correct itself.

It's never actually worked like that however. Every time the economy's been left to itself, we magically end up with an economic crisis. (Then people are shocked that banks, businesses etc acted selfishly.)

 

[HappyColour]

Essentially this is not a yes or no question. What must be asked is taking a Socialist approach to dealing with our financial crisis the correct one. In my opinion, it isn't if it is the case that the United States intends to make this its formal approach. Mixed Economies are the way to go!

 

[iKotomi]

So does doing nothing.

How is there a moral hazard involved when you don't do anything? When you don't have the government bailing you out, you are less likely to try something risky.

The economy suffers from the same laws of Supply and Demand... as supply goes up, demand goes down... so creating runaway inflation only prolongs the problem, and doesn't actually fix anything.

That is not how Supply and Demand works. Supply and Demand are independent of each other and are functions of price. As supply goes up, the price that the producer would sell it at increases because of the increases in marginal cost. When the price is higher people buy less. Inflation just affects how much a single dollar is worth to you.

It's never actually worked like that however. Every time the economy's been left to itself, we magically end up with an economic crisis. (Then people are shocked that banks, businesses etc acted selfishly.)

Just because a market corrects itself doesn't mean that it doesn't fail. In free market theory, uncompetitive firms leave the market in the long run, which is an important mechanism to self-correction. That is in no way in conflict with the existence of "economic crises". If you left it alone long enough, the market would have fixed itself because that's just the way markets work. It just happens that the period of time that it may take to do so is long enough to make a lot of people unhappy, and everyone knows what the real job of the government is. Quite frankly, I wouldn't mind seeing uncompetitive firms go. It means that those resources will be put into more competitive markets in the long run.

Businesses cheat because they have an incentive to do so. Government intervention is usually a major source of this incentive, especially since the government tends to do a bad job of buying at a competitive rate due to protectionism, bribes, etc. The real problem with government spending is that it messes with prices. The fact of the matter is, whenever the market settles on a price, that price is an equilibrium, meaning that it is pareto efficient. Messing with prices artificially tends to make things inefficient. Which is why when something can be done by the free market, it is usually better to do so.

I don't argue that we should have a complete lassaize-faire economy. Government spending is a cost that we pay for security and stability (sort of like insurance). It's just most government spending is insolvent, which just leads to a waste of money.

 

[D_Matt_Ma]

I hope the government intervenes and causes a bond and dollar crisis. That way, the poeple who voted for a bail out will suffer and get what they deserve. And people like me will be able to rub it into their faces when I say I told you so.

Yes, people deserve a job, home, retirement, healthcare... and everything that they don't pay for...

 

[Marginal]

Just because a market corrects itself doesn't mean that it doesn't fail. In free market theory, uncompetitive firms leave the market in the long run, which is an important mechanism to self-correction. That is in no way in conflict with the existence of "economic crises". If you left it alone long enough, the market would have fixed itself because that's just the way markets work.

The question becomes, when? Especially in a regulated environment, the notion of a "natural" market is iffy.

Businesses cheat because they have an incentive to do so. Government intervention is usually a major source of this incentive, especially since the government tends to do a bad job of buying at a competitive rate due to protectionism, bribes, etc. The real problem with government spending is that it messes with prices. The fact of the matter is, whenever the market settles on a price, that price is an equilibrium, meaning that it is pareto efficient. Messing with prices artificially tends to make things inefficient. Which is why when something can be done by the free market, it is usually better to do so.

Yes, but when they're notoriously poor at policing themselves, (the assumption seems to be they absolutely won't, but informed consumers will keep things in check which clearly does not happen) why argue that this is a good idea? (Which seems to be the basic libertarian ideal.)

 

[D_Matt_Ma]

All these arguments can be simplified to the following. Help uncompetitive people or not? If you help them, you tax higher and provide welfare. Otherwise, you do what I say, and let the uncompetitive go bye bye. Yes, I'm heartless... good stuff.

If you don't believe people are informed enough to be capable balances in a free market, then they shouldn't be allowed to vote. But since we insist on letting all people vote, including the stupid selfish idiots, then you gotta let them mess up. You don't get the benefits of the market without taking the fall when you are dumb enough to rely on credit cards and buying homes you can't afford.

 

[iKotomi]

Yes, but when they're notoriously poor at policing themselves, (the assumption seems to be they absolutely won't, but informed consumers will keep things in check which clearly does not happen) why argue that this is a good idea? (Which seems to be the basic libertarian ideal.)

There is a very big difference between government preventing companies from engaging in fraud, and government intervention in the economy. Libertarians want the government to prevent fraud. They don't want the government artificially increasing demand/supply of a product or messing with prices.

 

[Jaxel]

Just like it did during the Great Depression.

The economy wasn't left alone during the Great Depression... the situation was fixed with FDR's New Deal... but as I said in my previous post; it didn't really fix the problem; it just postponed it so that the market could crash again a few decades later.

It's never actually worked like that however. Every time the economy's been left to itself, we magically end up with an economic crisis. (Then people are shocked that banks, businesses etc acted selfishly.)

You think the current economic crisis is because the government left the econmy to itself? WRONG! The current economic crisis is because the government WOULDN'T leave the economy to itself. Government interference is the problem.

Essentially this is not a yes or no question. What must be asked is taking a Socialist approach to dealing with our financial crisis the correct one. In my opinion, it isn't if it is the case that the United States intends to make this its formal approach. Mixed Economies are the way to go!

Name me ONCE in the history of the world, where a government rooted in socialism has survived. You can read from my previous statements, that I am completely against socialism. Socialism means MAJOR government intervention; everything is run by the government. When the Iron Curtain of Russia fell; people finally got a clear view of what socialism means; we were all lead to believe that socialism and government intervention leads to a better run country. But what actually happens is that the only people who benefit are those in power. The USSR was in shambles, there was high unemployment and high poverty.

When the government is involved, industry stagnates, and often regresses. Up until 1965, unemployment constantly decreased at a steady rate in this country. What happened in 1965 that stopped it? The government put their hands into the welfare system. You're seeing the same things happen now with the medical industry (HIPPA system) and the financial system (SOX system). Also notice that our government run school system is also falling apart, while the private school system is succeeding.

The free market is what keeps a country in shape. There is no real incentive for the government to clean up the country or supply quality of life to its citizens. There is a reason why China (a country also in RUINS), is the only remaining Socialist country in the world...

I am proud to call myself a Libertarian (or Old Right Republican as Ron Paul calls it)...

 

[wuben213]

Aren't you confusing socialist for communist?

In Europe there are multiple Socialist governments doing pretty well.

 

[ShenYu]

That a third of the people here actually think this is a good idea makes me feel very sad indeed.

 

[Archangel]

Jaxel, we got into this mess because the government WASN'T doing their jobs. Stupid loans, horrible credit ratings, not looking into bad hedge funds... There's a story I read about one of the reasons this all went to slag is because the FBI had to lay off a lot of people since the funding was going to the Iraq war. If that isn't a face-palm moment I don't know what is.

 

[ShenYu]

Which begs the question. Do you think they'll ever do their jobs right? Yeah.

 

[BlackDragon37]

Aren't you confusing socialist for communist?

In Europe there are multiple Socialist governments doing pretty well.

Isn't communism the end and socialism the means to the end?

 

[Marginal]

The economy wasn't left alone during the Great Depression... the situation was fixed with FDR's New Deal... but as I said in my previous post; it didn't really fix the problem; it just postponed it so that the market could crash again a few decades later.

Mainly because of later pressure in FDR's term to also balance the budget.

You think the current economic crisis is because the government left the econmy to itself? WRONG! The current economic crisis is because the government WOULDN'T leave the economy to itself. Government interference is the problem.

That's why they deregulated lending practices etc? In either case IMO it's a weak distinction since they've always regulated the market to some degree. It's never been "free". A free market just gives way to monopolies.

Name me ONCE in the history of the world, where a government rooted in socialism has survived. You can read from my previous statements, that I am completely against socialism. Socialism means MAJOR government intervention; everything is run by the government. When the Iron Curtain of Russia fell; people finally got a clear view of what socialism means; we were all lead to believe that socialism and government intervention leads to a better run country.

Plenty of countries get by just fine with socialism to varying degrees. You muddle it when you confuse socialism with communism.

 

[Archangel]

People don't even know what the hell those words mean. They hear Republicans throw them around a lot and they get scared and go "OH SHIT! SOCIALISM! COMMUNISM! IT'S THE COMING OF THE ANTI-CHRIST!" Meanwhile Obama's like, "Um, can we just get the economy going please?"

 

[iKotomi]

Mainly because of later pressure in FDR's term to also balance the budget.

Umm...we fought a war. The increase in spending from that war was the primary reason why America pulled out of the recession. Not exactly balancing a budget.

That's why they deregulated lending practices etc? In either case IMO it's a weak distinction since they've always regulated the market to some degree. It's never been "free". A free market just gives way to monopolies.

Government is quite honestly the largest reason why there are monopolies. Sure there are some natural monopolies involved with prohibitive start-up costs, but the majority of monopolies exist because of barriers to entry, regulations, and patents. Look at a place like Hong Kong where there are even less regulations of the above sort, and you see that it free markets and monopolies are pretty much mutually exclusive.

 

[Marginal]

Umm...we fought a war. The increase in spending from that war was the primary reason why America pulled out of the recession. Not exactly balancing a budget.

Umm... Kinda tangential. Usually when the new deal is mentioned, it's blamed for only putting problems off, or extending the depression. The balanced budget stuff put in crimp in some of the new deal policies.

Government is quite honestly the largest reason why there are monopolies. Sure there are some natural monopolies involved with prohibitive start-up costs, but the majority of monopolies exist because of barriers to entry, regulations, and patents. Look at a place like Hong Kong where there are even less regulations of the above sort, and you see that it free markets and monopolies are pretty much mutually exclusive.

Ok. So once we do away with intellectual properties (among other pesky noncompetitive practices like anti pollution statutes etc), we'll have a free market for the first time ever?