Comments on: Do you oppose the $700 billion Wall Street bailout? Click here

A flurry of petition-based Web sites have popped up in the last few days with one purpose: persuading Congress to snub the $700 billion Wall Street bailout.

[FellowConspirator]

Thank you so very much for the link to www.buymyshitpile.com -- that's priceless, and I shall cherish it forever.

[ausernamenoonehaschosen]

There are many theories as to why the Depression occurred. What's odd is that the one I hear the most is the government at the time didn't intervene enough. At the time they decided to take a laissez faire approach, and let the banks fail. This is the one theory that I hear and read as the primary blunder during the Depression. Do some research folks, because the economists seem to all be saying that this $700 Billion bill is needed to avert a crisis. You may think it's for their own selfish greed, but I'm willing to trust them on it rather than the financially uneducated American public.

[riddelup]

How can you a admitted uneducated person support such a plan put forth by individuals who have such a huge self interest in the market they are trying to save. These same individuals are the same ones who a few months ago were saying we must continue to deregulate and get government out of the affairs of business.

[corkchasyoko]

Are you crazy? Where do you think the IRS will get the money? Show me where in history has the POWER been FOR THE PEOPLE. Do some homework and search for your self what is behind all of this. DO NOT rely on the media if you care for this country and your family. Take a look at the upcoming election. Who is thrown into our faces every where we look, even on our computers pop up keep showing the face our government and the media what us to vote for. I ask the question WHY do you?

[easyrunning]

Uhh... banks failed during the depression as a result of the problems. It was not the problem. Very unequal distribution of wealth, policies geared unfairly toward the rich, the gold standard, high rise in productivity of workers (because of automation) without rise in wages, borrowing on margin during the boom of the 20's... Those are the things that led to the great depression. Of course we left the gold standard (as did everyone else), but we are in a similar situation again now. We have essentially done the exact same thing here, of course there are differences, but more similiarites then differences. There is no easy fix.

[indyrev2]

First of all, you should listen to a wider variety of economists, most of the ones I've heard say this is a gigantic waste of resources. Second of all, these educated economists and the folks involved with the banks in this decision do have a self-interest in this bill. If the investment banks and mortgage holding banks were so smart, why the hell are they in this situation in the first place. This is a market which has highs and lows. Suck it up, put away your American Dream materialism for a few years and let the market do it's thing. It will come back as strong as ever.

[raymondfromaz]

Here's some research! From people far smarter than you! So much for your theory that all the economists are saying that a bailout is needed!




September 25, 2008
Economists Send Open Letter to the United States Congress on the Wall Street Bailout
44 economists from around the country oppose the bailout
By: Wayne Brough


[If you are an economist who opposes the bailout and would like to be added to this list, please send an email to Wayne Brough at [e-mail]]


We, the undersigned economists, write to strongly advise against the proposed $700 billion bailout of the financial services sector as a response to current trends in the market. Granting the Treasury broad authority to purchase troubled assets from private entities poses a significant threat to taxpayers while failing to address fundamental problems that have created a bloated, over-leveraged financial services sector.

Such a large government intervention would create changes whose effects will linger long into the future. The Treasury plan would fundamentally alter the workings of the market, transferring the burden of risk to the taxpayer. At the same time, the $700 billion proposal does not offer fundamental reforms required to avoid a repeat of the current problem. Many of the troubles in today?s market are the result of past government policies (especially in the housing sector) exacerbated by loose monetary policy. Congress has been reluctant to reform the government sponsored enterprises that lie at the heart of today?s troubled markets, and there is little to suggest the necessary reforms will be implemented in the wake of a bailout. Taxpayers should be wary of such an approach.

In addition to the moral hazard inherent in the proposal, the plan makes it difficult to move resources to more highly valued uses. Successful firms that may have been in a position to acquire troubled firms would no longer have a market advantage allowing them to do so; instead, entities that were struggling would now be shored up and competing on equal footing with their more efficient competitors.

Although it is clear that the financial sector has entered turbulent times, it is by no means evident that providing the U.S. Treasury with $700 billion to purchase troubled assets will resolve the crisis. It is clear, however, that the federal government will be facing substantially higher deficits and taxpayers will be exposed to a significant new burden just as the looming crisis in entitlement spending appears on the horizon.

For these reasons, we find the proposed $700 billion bailout an improper response to the current financial crisis.

Sincerely,

Dick Armey, FreedomWorks Foundation
Wayne Brough, FreedomWorks Foundation
Alan C. Stockman, University of Rochester
Ambassador Alberto Piedra, Institute of World Politics
Arthur A. Fleisher III, Denver Metropolitan State College of Denver
Bryan Caplan, George Mason University
Burt Abrams, University of Delaware
Cecil E. Bohanan, Ball State University
Charles N. Steele, Hillsdale College
Charles W. Baird, California State University East Bay
D. Eric Shansberg, Indiana University Southeast
Donald L. Alexander, Western Michigan University
E.S. Savas, Baruch College/CUNY
Ed Stringham, Trinity College
Erik Gartzke, University of California, San Diego
Frank Falero, California State University, Bakersfield
George Selgin, West Virginia University
Howard Baetjer, Jr., Towson University
Ivan Pongracic, Jr., Hillsdale College
James L. Huffman, Clark University
James McClure, Ball State University
Joe Pomykala, Towson University
John P. Cochran, Metropolitan State College of Denver
Kishore G. Kulkarni, Metropolitan State College of Denver
Lawrence H. White, University of Missouri-St. Louis
M. Northrup Buechner, St. John?s University
Melvin Hinich, University of Texas, Austin
Nikolai G. Wenzel, Hillsdale College
Norman Bailey, Institute of World Politics
Paul Evans, Ohio State University
Randall Holcombe, Florida State University
Richard W. Rahn, Institute for Global Economic Growth
Robert Heidt, Indiana University School of Law, Bloomington
Rodolfo Gonzalez, San Jose State University
Roy Cordato, John Locke Foundation
Samuel Bostaph, University of Dallas
Scott Bradford, Brigham Young University
Soheila Fardanesh, Towson University
Stephen Shmanske, California State University, East Bay,
T. Norman Van Cott, Ball State University
Walter Block, Loyola University New Orleans
William Barnett, II, Loyola University New Orleans
William F. Shughart, II, University of Mississippi
William Niskanen, Cato Institute



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[Republicae]

Considering that thus far nearly 200 well-known economists have come out against the $700 Billion Dollar Bailout I would question its validity as a prudent measure. Regarding the Great Depression, it is not a matter of theory but a matter of cause and effect. The excessive ease of credit during the Twenties created the very same type of bubble created by the excessive ease of credit today, when the Great Contraction began in the early part of 1929 and then the Crash, it facilitated the economic depression of the Thirties. The actions taken by the Administration of FDR only exacerbated and distorted the effects of the contraction in the economy and extended the depression for over ten years. It is apparent that our government has not learned from its mistakes in the past and we will pay for their disregard of those lessons in the near future.

Additionally, what we are witnessing is far more than just a deepening economic trough; we are seeing the end of The Debt Standard of Money. Our entire economy depends the creation and expansion of debt, every "dollar" or I should say every Federal Reserve Note, must be "borrowed" into existence and each "dollar" is nothing more than a legal notification of a debt obligation or a "glorified" IOU. As with all Debt Monetary Systems (fiat), ours will face the same fate as those which came before it, it will collapse under the weight of the massive and irreversible debt upon which it rests.

[Orion Blastar]

The solution to this mess is simple.

There are 300 million US citizens that pay taxes. These are the people that are losing their house, job, car, and have poor health.

Congress and the President should just pass a bill that gives one million dollars to each registered tax payer so they can pay off all debts and own their own houses and not only will it fix the economy but stop banks from failing as well.

Instead we have $700 billion in government waste and corporate bailouts of really stupid banks and those 300 million US tax payers are going to pay for it all with higher taxes in the next few decades and the US government will owe more trillions to the Chinese.

But I guess they won't do it, because it is logical, uses common sense, and seems to be the less expensive way to fix things.

[gbecom]

AMEN!!

[kdc12343]

I agree 100% lets take care of U.S. first. Then our government can figure out some kind of reform program and deal with the overseas issues later. I just e-mailed our congress man the same messege before reading this one. hope more americans will catch on.

[mcpoor]

Yes! why should we give money to the very very rich that we take from the people

[abreill]

Your logic is a useful approach but your numbers are way off. Using your numbers, the approach you propose of giving $1 Million to each of 300 Million taxpayers, would cost $300 Trillion dollars or 50 times more than the current proposal. Your number likely is based on the total population of the US.

If we use realistic taxpayer numbers we find the IRS recording 138 million taxpayers in 2007. Of those 138 million approximately 1/3 paid zero in taxes. This means that 92 million taxpayers actually are contributing and would feel the direct burden of the bailout - because they would be paying for it.

Still, if we paid each of these 92 million a rebate of $1 million it would cost $92 trillion - a sum that the US would have to collect by borrowing through issuing more T-Bills (if we could even get investor nations to purchase that much debt) and in so doing would increase the national debt by a factor of 10 from $9.7 trillion to $101 trillion.

Additionally, this approach would be fiscally irresponsible since it would (A) put the nation in debt loads too severe to repay, and (B) lead to hyper inflation the likes of which even the Weimar Republic in Germany never saw.

[raymondfromaz]

Can we PLEASE start requiring Economics in school again?

Come on! You can't be that naive! You obviously understand nothing about economics.
What are you going to do when every business in the country closes... yes closes!
Who's going to work there for $10.00 an hour when your a millionaire?
Where are you going to spend your money?
They'll have to pay people $300.00 an hour to work at Wal-Mart... and a gallon of milk would probably be $120.00... not to mention the price of a car or a house! Think beyond they pipe dream that you?re going to get something for nothing and pawn it off on the children.... THAT?S what got us into this mess in the first place!

Let the market crash and then correct itslef... don't prolong it by involving the government. Nothing the government has ever gotten involved in has ever gotten better... it's not the nature of the beast!

[riddelup]

If we were to give each household 17.000 dollars they could pay their loans, and give wall street what they say they want the most liquidity.

[cc9696]

If Paulson and Bernanke are so smart why didn't they see this coming. Buffet is trying to protect his investment. He realizes now that he moved before he had all the information. NO BAILOUT

[corkchasyoko]

My opinion they knew what was coming, but wanted quick money like all the others. Buffet I believe is just using the excuse that all information was not available. I also agree NO BAILOUT for all this free money we are giving. What I mean by free money, they are not paying but WE ARE or WILL BE. We must put a stop to all of this or we will be SLAVES to those who continue to make millions.

[darkknight0072004]

They did but the democrats were concerned about giving loans to people who couldn't afford them :

http://query.nytimes.com/gst/fullpage.html?res=9E06E3D6123BF932A2575AC0A9659C8B63&sec=&spon=&pagewanted=print


-I

[bmanmck]

We are constantly being sold a bill of goods in the name of "crisis". This mess has been going on for years. Many people have been to Congress trying to get the cheap money practices stopped. When I learn that some banks (BOA) required their employees to underwrite zero interest loans to illegal immigrants, my whole picture of this mess changes rom what the media is saying. Then you look at the politicians who received the most contributions from Freddie and Fannie, and you see who also obstructed the call for reform over these last 15+ years. O'Bama, Kerry, Biden et al. Let them finance their own clean up. Why should me and my family who has zero debt and plays by the rules help them for their totally undisciplined business practices? This is already costing me in my building supply business. At least I have my good name. What do they have left, except large bank accounts?

[riddelup]

If you equally distribute this money to each taxpayer without restriction you would resolve this dangerous liquidity as these taxpayers pay their and continue our egregious consumption levels.

[corkchasyoko]

Or we all can be given a currency machine so we can make worthless money like what is being proposed, so we can pay our bills.

[johnsbrn1]

$1 million to each taxpayer? Do some math, where in the hell is the government going to come up with $300,000,000,000,000? That's 300 trillion Dollars. Yea, that's logical. Simple minded solution is more like it. The bailout is a bad idea, but at this point it's the only thing we have left. Very smart economists and people in the financial industry that have no more stake in this than the rest of us believe this is necessary to avert something potentially far worse. Yes, we are helping out banks who made bad decisions, but you can't blame the banks alone. People took out mortgages that they could not afford and they are equally to blame. Not to mention this country's credit card addicition.

[FellowConspirator]

Well, there's no reason to believe that economists are any more or less smart than anyone else. That economists have been intimately involved in causing the situation we now face should be ample evidence of that.

But you do make a statement that's peculiar, that economists and people in the financial industry that have no more stake than the rest of us support this bailout. Well, everyone in the financial industry has a stake in this more than those outside it. Even the mail-room clerk's job is dependent on this. But it misses the bigger point that nobody outside the financial industry, treasury (run by the recent ex-CEO of Goldman Sachs), and part of congress support it.

Academic economists have widely balked at the proposal and hundreds of professors (including some with Nobel Prizes in economics, and laureates), and they have petitioned the Congress to reconsider, and, at all costs not be hasty. None seem to feel that costly, immediate action, at the sole discretion of a single individual (who's largely responsible to bankrupting Goldman Sachs), is wise. They seem to think that stepping back and taking time to make a plan and get it right is more important that responding immediately.

[corkchasyoko]

I do not believe this is the only solution there is. For those who agree with the bailout, they should be the ones to pay this bill not me. The media is TRAINED and ORDERED not to report all they know. DAH

[kannuc]

Starting in the late '80's with the S&L's, we've been bailing out financial institutions ever since. Problem is that investors want higher returns but don't want the risk associated with it. In effect - let's make lots of money but rescue us when we get too greedy. The lack of oversight by the feds has caused the latest crisis. It does not make sense to keep bailing out the financial community, only to have it happen again. Ask yourself why isn't this happening in Western Europe, Canada and other industrial nations? They have stiffer laws governing financial institutions. Fannie Mae, Freddy Mac and the others should not be allowed to run as semi-private-government identities; Fannie Mae's lack of oversight is well documented. Change the laws before we bail out, if not, don't bail out and let the chips fall where they may.

[RavenChylde]

I could get behind the 17,0000 dollars to each taxpayer. It would very likely bail out the markets and everything else. Although then the taxpayers (myself included) would then need to learn how to not get so far in debt. Buy only what you can afford would work for the banks as much as the taxpayers.

[xilonic]

If a company is too large that its collapse can bring down the whole economy, the company should have not existed in the first place. The government must not allow such large concentration of power, money or market in a single entity. If this were observed, we would have not had this crisis. Instead countless mergers are approved, creating world-wide conglomerates that can kill the economy in an instant.

[corkchasyoko]

These so called large businesses had killed the small business man. What did they do with their money they earned? Why did they give the CEO's and others such high bonuses? Even when the problems were known they still gave large salaries and bonuses. I would like to receive Thoursands in the 3 and 4 figure each year, plus millionns in the same figure bracket. Wouldn't you? Why aren't they paying for this problem. In the history of the world no ruler has been for THE PEOPLE>

[GotAMD]

Ah, but the government created and implicitly backed Fannie and Freddie, which were the institutions which spurred the securitization of mortgages. What we need is accountability within the government. Without it, smart individuals in the private sphere will be able to find ways to abuse the government for their own profit.

[gvalentino]

I do not oppose the bail-out, at all. The individual that caused all the financial woes in the first place was voted in, fair and square, not once but twice. Even before he was elected to the highest office in the country, he had bankrupted three major companies. What in God's name made you think he wouldn't do the same to the country. You have only yourselves to blame. Now it's time to pay the piper and get a reality check.

[FellowConspirator]

I oppose the proposed bail-out (not necessarily government action, just this plan) because it's really nothing more than a shakedown. However, I agree with you in most of the other parts (though I don't think it's fair to blame the people for voting him into office, he lost the popular vote).

[corkchasyoko]

I do not agree with the bailout. Yes it is the people of the US fault. This is do to the fact they listen to the media rather than to do real research to know about who they are electing. People have to wake up and obtain common sense. This is a real world we live in. People not only listen to this garbage that is given us, but also accept the decline in morals, then wonder why the world is in such a state.

[darkknight0072004]

You are in idiot if you think Republicans caused this. The main benefactors of lobbying money from Fannie and Freddie? Chris Dodd, Barack Obama and John Kerry (in that order). The GOP tried to take oversight AWAY from congress and put it with people smart enough to understand what they were regulated but DEMOCRATS shut it down. This was in 2003 :

http://query.nytimes.com/gst/fullpage.html?res=9E06E3D6123BF932A2575AC0A9659C8B63&sec=&spon=&pagewanted=print

Stop your tired blame Bush idiocy. Congress is to blame because they are the regulators. Congress is controlled by Democrats and when the Republicans controlled it the democrats BLOCKED reform. See through their excuses - though I doubt you will because you don't want to.

[luluai]

American greed and stupidity is largely to blame for meltdown of the financial system in the USA, unfortunately the damage is not restricted to the USA, but has global repercussions in the form of loss of savings and vastly depleted retirement and superannuation funds in countries far removed from this current crisis.
America, stop playing politics and look at the bigger picture, stop concentrating on your own self interest, and fix this situation of your own making, so that others in the world may get on with their lives with a little more security. Remember the USA accounts for less than10% of the worlds population, how unfortunate that it should have such a major influence.

[Orion Blastar]

Sorry lack of sleep got some numbers wrong:

The solution to this mess is simple.

There are 300 million US citizens that pay taxes. These are the people that are losing their house, job, car, and have poor health.

Congress and the President should just pass a bill that gives $2000 dollars to each registered tax payer so they can pay off all debts and own their own houses and not only will it fix the economy but stop banks from failing as well. That is $600 Billion in fixing the economy.

Instead we have $700 billion in government waste and corporate bailouts of really stupid banks and those 300 million US tax payers are going to pay for it all with higher taxes in the next few decades and the US government will owe more trillions to the Chinese.

But I guess they won't do it, because it is logical, uses common sense, and seems to be the less expensive way to fix things.

[Penguinisto]

I like the direct-to-taxpayer solution. The money per-person would actually be much higher (babies don't hold mortgages, and neither do renters). Just present each homeowner with a mortgage voucher to pay $amount towards the principal. Most bad loans get caught up, the banks get paid anyway, and the resulting credit squeeze will ease.

Meanwhile, they'd help out further by abolishing interest-only mortgages (unless the mortgagee can prove he/she makes over $x per year), and cap mortgage interest rates to x.x% over federal prime.

/P

[ComLink]

Something must happen, and happen soon. This is the number one priority the government must put its focus on.

Bailout? not necessarily, but knowing the consequences for us (the American citizens & the U.S. as a country) must be done with full understanding for the long term. A task that can't be done overnight.

A decision on the US economic roadmap must happen right away. To do nothing will put our system so far into crisis, it will take generations to recover, if that can even happen.

Debate? OMG! How self serving, when we are truly in peril of never seeing the US the same way (in a good way) again.

Senators, get to work and quit the politicing. For once, put yourselves and your campaigns aside for a greater good.

[tjsroch]

This problem was created in 1913 when the fed was created and the growth of the money supply became entirely based upon debt. To illustrate the problem graph one dollar borred in 1913 at a rate of 6% compounded yearly. Each year the new balance is multiplied times 1.06. From 1913 to 1950 the rate of growth in the interest portion is not burdensome, then that graph begins to turn up and the interest (aka usury cost) grows at a more rapid rate. During the 1950 to 1980 period the graph adds significant usury cost (the interest portion) but after 1980, trends into a very steep rate of increase.

This simple graph matches the total US debt problem. We have made a system of increasing the US money supply, entirely by issuing debt, now approaching 100 years. Each year, the dollar that our forfathers borrowed and didn't repay, has about $380 of interest! Sorry kids, throwing $700 billion of new debt in, won't solve the real systemic problem.

A US Treasury Dollar, declared by law equal to a Federal Reserve Note, spent into existence (with restraint), not debt, appears to be a realistic answer. Increase of the Dollar money supply cannot carry interest and expect the US citizens to carry the rapidly increasing burden of high usury. Retirement of currency through payment of taxes, keeps unrestrained growth in check, creating stability. This method could make new capital for worthy ventures to be undertaken here in the US.

[thelemurking]

How about we actually hold the corp execs accountable for their failures?

I'm sure the WaMu CEO and CFO live incredibly luxurious lives, so instead of we the people paying for the banks failures, how about we take seize the property of the executives and board of directors for these failed companies and auction it off. I think they can live without their personal jets and helicopters and their $100k sports cars. Kick them out of their mansions and make them live like the people they screwed over.

Any CEO and CFO of these failed banks should be banned from holding another executive position. If you don't send them to jail, at least take everything they own and force them to flip burgers and serve fries at a local fast food place.

[corkchasyoko]

I agree that the people responsible for this disaster should pay. Yes take everything they own including their pensions and pay off this debt. But that will never happen for.....MONEY AND POWER rulses this world. We are just slaves who is worn down to poverty. If this happened to one of us...we would be made to pay or go to jail, probably for life. And the jail would not be user friendly like the "MONEY PEOPLE" are priviledged to go to.

[brucethegolfer]

Let me get this straight. A bunch of politicians, economists, and wall street bankers make a mess of the economy. I am now supposed to trust these same folks to straighten out the mess.

What's that definition of insanity again? Doing the same things and expecting a different result, right?

Good grief folks, its time for some sanity.

[corkchasyoko]

You are so right but most people do not understand this type of commen sense thinking.

[bojo360]

Your opinion is spot on. we must vote out every politician Republican or Democrat that is in the pockets of Wall Street. Way too elitist for me. Congress see us as vote fodder to be lied to and ignored.

[Catnap23]

I'm not sure this is bailout. The government proposes to buy assets that have some value. A vast majority of homeowners do not default, and those who do forfeit property that has value and eventually will be sold. The assets the government is purchasing is at a discount that supposedly will reflect risk. The end result is the impact on the American taxpayer will be far less than reported. In fact, if the securities are priced right the government should show a profit after the final accounting.

Will the firms who sell the assets to the government take a hit? The answer is yes. The sale price will be less than their face value.

Should government do this? Generally no but in this case it was government that played a large role in creating the problem. How, by encouraging and "persuading" lending institutions to relax and sometimes abandon sound lending practices. This brought in a large influx of non credit worthy people who would not have been approved given normal lending criteria. Add to this the speculators who entered to home market by buying homes with the goal of flipping them in a few months at a significant profit.

Does the government need to take action? Yes, Is the bill that finally emerged fromt he committee the answer? Likely no. What finally emerged was something that unlikely would ever work.

[corkchasyoko]

I just have one question what program that is under government control works? And yes the government will make a profit. Where will this profit end up? In who's account?
The 3 top auto manufacturers were given $25,000 billions dollars yesterday and is asking for additional $25,000 billion dollars. Where will this money come from? Why do we have to update their factories to get better milage? Remember the hybrid money, who promised 80 MPG and only came up with 30 MPG? What did we get for our money?
Now we are going to give more for more promises>

[MikeG8r]

I would rather our government spend $700 billion on our economy than spend another dime on Iraq.

[Yirmin]

We have two options..

Do nothing and the economy will be hit hard and average joe will suffer some hardship, and the rich will suffer even more hardhsip.

Or

Do a bailout and the economy will be hit a little now and even harder 10 years from now, and average joe will be hit hard now and harder later, and the rich will go on about their business suffering nothing at all.

Well frankly I feel like the suicide bomber on this one. I'm willing to do nothing and make damn sure that others suffer along with me instead of allowing the government to heard the average joes to slaughter while the rich go on business as usual.