google-site-verification: google1ebcbd3f9084755c.html Eclectic writing: Common Sense ~ I have HOPE for our future

Friday, September 26, 2008

Common Sense ~ I have HOPE for our future

Good Day to everyone!

This from True Majority today:

....And as of this morning, instead of the Wall Street bailout, Congress is
expected to vote on a "Main Street" economic recovery package to extend
unemployment insurance, back up faltering health care coverage, repair our
schools, and more. Together we showed what TrueMajority can do in a crisis.

There is a lot of "I don't like this plan" "I hope they do the right thing" "I can't trust these people".

What gives me great hope is that the conversation is taking place, not just among the "powers that be" but among the American people. Which ultimately should have the confidence that their voices are heard and a trust in their government, which has been sorely missing for years.

I'll keep adding to today's events as they keep developing.




  1. I sympathize with your anger - I really do, but you need to realize that this "bailout", while it may help the big money guys will help "Main Street" even more.

    First and foremost - many, many retirement funds, insurance companies and other financial entities are heavily invested in Mortgage Backed Securities (MBS). The vast majority of these MBS are of good quality, but are being dragged down by the ones that are not good quality.

    To the extent that you do not pump money into the system to revitalize the credit markets, you are endangering yourself as well -- your retirement earnings go poof, your insurance rates go up to compensate for lost investment earnings, etc. Understand that you have as much or more at stake in this "bailout" as any Wall Street executive.

    Secondly, the $700 billion dollar figure may never materialize. It may take significantly less than that to shore up nervous markets. It may take all that. But it's almost certain that the economic cost will be far greater than $700 billion if we let the credit markets fail. Let's look at the "bailouts" of Fannie Mae and Freddie Mac (BTW -- despite the terms "bailout", not a dime of public money has yet gone into either entity). Between them they guarantee something on the order of 5 trillion dollars worth of mortgages. Let's say the government didn't step in, and creditors refused to lend to them. First off, interest rates for home loans rise. More ARM mortgages default than otherwise would have.

    Secondly, fewer homes are built or sold (even fewer than are being sold now when times are already tough).

    Thirdly, creditors get even more nervous about the ability of folks to pay -- interest rates for credit cards, autos, and basically all other types of loans jump dramatically.

    This intervention is not about salvaging corporate CEOs - it is about keeping the economy going so that the average person on the street can continue to work, own a home, pay their bills, have "sort of" reasonable credit card rates, auto loan rates, etc.

    It's not pretty, and the urge to finger point and find blame is high because, frankly, the stakes are huge, but ultimately this bailout is about attempting to stave off another depression, with all the misery that entailed.

  2. Thank you for your view. I respect your opinion and understand fully the impact on our economy.

    It is not anger that I have, it is outrage.

    We are being asked to write a blank check, Please review the 3 page document submitted, I linked to it in a prior article.

    Mainstreet is screaming because the "Golden Parachutes" are to be included in these bailouts. There is no accountability for how this money is to be spend or any oversight.

    It is all up to a man with hugely vested interests.

    As far as finger pointing: Yes! we need to know everything about those who caused this, party affiliation is unimportant. This is wreckless and in many cases, criminal behavior.

    Yes! we need to know their names and they need to pay a price, not walk away with a golden parachute.

    No one is asking these people to turn over their personal finances and sacrifice.

    It seems that the middle class and the poor are the ones asked to sacrifice every single time.

    This is my opinion:

    we don't want CEO's to walk away with a reward for sinking the economy.

    Common sense dictates that what needs to be bailed out is done so with strings attached, the ones that repay tax payers.

    Furthermore, I do not comprehend an administration that has benefitted for years by lack of regulation because government involvement is evil, but as soon as they hit a snag through their own greed and incompetence, they run to the goverment demanding that they fix the problems.

    The bottom line is that the bail out will happen, not because the little people have money invested but because the big wigs's have their moeny there and they are not willing to loose it.

    We all know the bail out will happen. The real question is HOW?

    Without oversight? Without conditions? Without repaying it? With CEO's getting 20 million a piece?

    They are hammering out a bail out and it is to incorporate the people who have been swindled by these predatory lending tactics.

    The ones who wanted a blank check are balking at signing a bill that includes middle America.

    They don't want to resolve the mortgage crisis at the homeowner's level. (mind you that my mortgage is fine, I don't have a personal stake in this).

    That blank check does not discuss the safety and security of the main street investors.

    Again, regulations and oversight needs to be incorporated, it needs to be mandated.

    That is the outrage you see in my writing.

    We are the "little people" and we deserve a heck of a lot better than what we are getting.

    Thank you so much for your wonderful post. I do see and understand that part of the equation. What we are all screaming about is seeing the whole picture, because we are in it.



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