NationStates Jolt Archive

So I got this idea about how the government could better spend taxpayer money by subsidizing car purchases (i.e. consumer pays 60% and government uses the money from bailout to pay the other 40%) instead of bailing out auto companies directly. Theoretically, this would jump start the economy by encouraging car sales and creating new jobs. This could be potentially be a win-win solution as the taxpayers get to see their taxes at work and the auto companies recover. So what do you think about this idea? And do you have an idea on how the bailout money could be better spent?

All bailout money should be delivered to me.

So I got this idea about how the government could better spend taxpayer money by subsidizing car purchases (i.e. consumer pays 60% and government uses the money from bailout to pay the other 40%) instead of bailing out auto companies directly. Theoretically, this would jump start the economy by encouraging car sales and creating new jobs. This could be potentially be a win-win solution as the taxpayers get to see their taxes at work and the auto companies recover. So what do you think about this idea? And do you have an idea on how the bailout money could be better spent?
Nope. Bring them under government control retooling them into factories producing stuff to help the US' plans to sort its knackered infrastructure out, up to the value of their debts and then 20% more to teach them a lesson about running their business outstandingly poorly, then give them back, with an extra few dozen million (the govt. still making an overall gain here) to get them sorted out again.

Who gets the money? Just GM and Ford, whose history has been one of consistently shafting American workers and moving jobs overseas or across the border, or the Asian automakers who have been the biggest investors in US auto manufacturing and automotive industry employment in the same timeframe? Truth is, these days it's Honda and Toyota who are the American automakers and I would rather see money spent inviting them to build more plants than waste it trying to save those dinosaurs.

Not to mention I'd rather have the money. Send every worker a $2,300 check and I think we'd see the economy rebound far more effectively than any bailout.

Who gets the money? Just GM and Ford, whose history has been one of consistently shafting American workers and moving jobs overseas or across the border, or the Asian automakers who have been the biggest investors in US auto manufacturing and automotive industry employment in the same timeframe? Truth is, these days it's Honda and Toyota who are the American automakers and I would rather see money spent inviting them to build more plants than waste it trying to save those dinosaurs.

Not to mention I'd rather have the money. Send every worker a $2,300 check and I think we'd see the economy rebound far more effectively than any bailout.

All bailout money should be delivered to me.

See, it's a great idea!

you seem to be assuming that:
A) people will buy more cars just because they are cheaper
B) insurance isn't a bitch (in Britain we have resorted to re-animating Lord Nelson!)
C) companies can afford to produce the cars to buy
D) that the government should be financing cars
E) that people will buy American

All bailout money should be delivered to me.

will you buy lots of cars?

See, it's a great idea!

It really is. Generally, people spend their money more effectively than the government because they're generally aware of what goods give them the most utility. That means the money is spent as efficiently as possible, resulting in the greatest boost to the economy.

Is that always the case? No, but given that this entire bailout package completely vindicates the idea that the more incompetent you are, the more the government rewards you, it's definitely a far better choice. Spending it on infrastructure would be a good idea if they use the funds carefully, but the current plan of doling out billions based upon incompetence is ludicrous.

Nope. Bring them under government control retooling them into factories producing stuff to help the US' plans to sort its knackered infrastructure out, up to the value of their debts and then 20% more to teach them a lesson about running their business outstandingly poorly, then give them back, with an extra few dozen million (the govt. still making an overall gain here) to get them sorted out again.

ah yes because retooling a consumer based economy to infrastructure projects won't at all wreck not only the US economy but also the worlds

Not to mention I'd rather have the money. Send every worker a $2,300 check and I think we'd see the economy rebound far more effectively than any bailout.

you'd just put it in savings! :mad:

you'd just put it in savings! :mad:

Not at 0.5% per year...

But then again, depositing in it in savings gives banks more money to lend, increasing the money supply several-fold.

It really is. Generally, people spend their money more effectively than the government because they're generally aware of what goods give them the most utility. That means the money is spent as efficiently as possible, resulting in the greatest boost to the economy.

Is that always the case? No, but given that this entire bailout package completely vindicates the idea that the more incompetent you are, the more the government rewards you, it's definitely a far better choice. Spending it on infrastructure would be a good idea if they use the funds carefully, but the current plan of doling out billions based upon incompetence is ludicrous.
Read this column in the WSJ. It's scary how well Ayn Rand had it pegged when it comes to rewarding incompetence.
http://online.wsj.com/article/SB123146363567166677.html

The current economic strategy is right out of "Atlas Shrugged": The more incompetent you are in business, the more handouts the politicians will bestow on you. That's the justification for the $2 trillion of subsidies doled out already to keep afloat distressed insurance companies, banks, Wall Street investment houses, and auto companies -- while standing next in line for their share of the booty are real-estate developers, the steel industry, chemical companies, airlines, ethanol producers, construction firms and even catfish farmers. With each successive bailout to "calm the markets," another trillion of national wealth is subsequently lost. Yet, as "Atlas" grimly foretold, we now treat the incompetent who wreck their companies as victims, while those resourceful business owners who manage to make a profit are portrayed as recipients of illegitimate "windfalls."

But then again, depositing in it in savings gives banks more money to lend, increasing the money supply several-fold.

didn't we try that? :p

Not at 0.5% per year...

But then again, depositing in it in savings gives banks more money to lend, increasing the money supply several-fold.
Actually, CDs are one of the best interest-paying investments right now if you want a place to park cash. Much better than money-market funds. Some savings accounts are even better than the money markets.

Actually, CDs are one of the best interest-paying investments right now if you want a place to park cash.

I think you mean vinyl young whippersnapper :wink:

I think you mean vinyl young whippersnapper :wink:
Maybe... What will you give me for my mint condition "Surrealistic Pillow" album?

Maybe... What will you give me for my mint condition "Surrealistic Pillow" album?

not much (http://www.amazon.com/Surrealistic-Pillow-Jefferson-Airplane/dp/B000Q60WJC/ref=sr_1_1?ie=UTF8&s=music&qid=1231798621&sr=1-1)

Ask DJ's for a copy of their music after gigs they usually hand out free vinyl ;)

will you buy lots of cars?

And Jeremy Clarkson to talk to me about them as I drive!

And Jeremy Clarkson to talk to me about them as I drive!

careful now hes the only anarchist to ever be over the age of 21

I suggest that rather than bailing out automakers and allowing them to maintain the same, failed, process, we provide funds contingent upon the development of newer, better products. At this point, GM, Ford, and Chrysler are non-competitive because their execs have kept their skulls firmly planted in the sand for the last decade. If they want a bailout, they have to show us that they aren't gonna come begging for another one in ten years.

At the same time, Vetalia, you're being mildly disingenuous. Government spending can be significantly more effective, in particular during periods of low consumer confidence. Public works projects not only are critical to the upkeep of failing infrastructure (See Seattle, St. Paul, et al), but come with a multiplier effect that putting money right into the hands of consumers doesn't have. In cases of recession, you need to bolster consumer confidence. A 2,300 dollar stimulus won't do that. It might help individual households, but the cycle remains. By a mixed strategy of stimulus, public works, and new industry development, we have a much more visible, and more effective means of bolstering consumer confidence.

Send every worker a $2,300 check and I think we'd see the economy rebound far more effectively than any bailout.
Actually, it would be $2,300 per every baby, student, worker, unemployed and retired. Per every member of the workforce, it would be $4,600.

Government spending can be significantly more effective, in particular during periods of low consumer confidence. Public works projects not only are critical to the upkeep of failing infrastructure (See Seattle, St. Paul, et al), but come with a multiplier effect that putting money right into the hands of consumers doesn't have.
By public works, you mean dumping the money into another Boston Dig?

By public works, you mean dumping the money into another Boston Dig?

Well, I was thinking another Grand Coulee Dam, or another Interstate Highway System, or another Tennessee Valley Authority. You know, successful public works projects.

Well, I was thinking another Grand Coulee Dam, or another Interstate Highway System, or another Tennessee Valley Authority. You know, successful public works projects.
You know, public works projects are usually successful when they're done out of need, not out of looking where to dump some money.

Another dam? It's known now that hydro power plants are fairly damaging to the environment, and they're not just expensive, but very time-consuming to build.

A new Interstate Highway System? Sounds good, but only if they finally dump the ridiculous speed limit, and make it an Autobahn-like system, complementing the old slow roads. Otherwise it's pointless redundancy to the existing system. And with the late regulation obsession, it won't happen.

You know, public works projects are usually successful when they're done out of need, not out of looking where to dump some money.

You heard of this thing called the New Deal? There was this President who was in a really similar situation to this one, and he was looking to stimulate the economy by creating jobs and improving public infrastructure. He did so by doing things like creating the TVA, which powered much of the South, and the CCC, which built dams across the west, providing a source of power that was sustainable and plentiful. So... Yeah... Generally, the two aren't contradictory.

My point was not that we needed a new system of dams or roads, but that Public Works projects aren't all the Boston Dig. A good set of public works projects for modern America would be: jobs laying down fiber-wire and developing e-infrastructure, the Kerry plan to create a high-speed rail system for the US, public transportation in cities across America currently lacking sufficient public transportation systems, repairs to failing highways and bridges before we get another St. Paul collapse, the rebuilding of New Orleans, and the re-design of the flawed levees that allowed for the Katrina disaster, the development of sustainable power infrastructure, and other similar projects.

To be blunt, there's plenty to do and fund that needs doing and funding, and now is a good time to do so.

Maybe... What will you give me for my mint condition "Surrealistic Pillow" album?
I'm depressed now... I suppose I need to play it until it's worn and scratchy like my Volunteers album.

Who gets the money? Just GM and Ford,

Just wanted to point out that, you mean, GM and Chrysler...

Ford didnt take any money, but lobbied for the other two to receive funds...

He did so by doing things like creating the TVA, which powered much of the South, Yes.


One such considered above criticism, sacred as motherhood, is TVA. This program started as a flood control project; the Tennessee Valley was periodically ravaged by destructive floods. The Army Engineers set out to solve this problem. They said that it was possible that once in 500 years there could be a total capacity flood that would inundate some 600,000 acres. Well, the engineers fixed that. They made a permanent lake which inundated a million acres.
This solved the problem of floods, but the annual interest on the TVA debt is five times as great as the annual flood damage they sought to correct. Of course, you will point out that TVA gets electric power from the impounded waters, and this is true, but today 85 percent of TVA's electricity is generated in coal burning steam plants. Now perhaps you'll charge that I'm overlooking the navigable waterway that was created, providing cheap barge traffic, but the bulk of the freight barged on that waterway is coal being shipped to the TVA steam plants, and the cost of maintaining that channel each year would pay for shipping all of the coal by rail, and there would be money left over.



My point was not that we needed a new system of dams or roads, but that Public Works projects aren't all the Boston Dig. A good set of public works projects for modern America would be: jobs laying down fiber-wire and developing e-infrastructure, the Kerry plan to create a high-speed rail system for the US,
Which won't be used anyway. Rail is expensive and not necessarily environmentally better than roads; often worse.
And there's plenty of "e-infrastructure" now, plus it's a commercial thing.


repairs to failing highways and bridges before we get another St. Paul collapse,
A bridge fell down, big deal. Yes, there were about as many victims in this once-in-a-year accident as Iraq claims daily, and as US roads claim hourly. So?

A rebuild of all old bridges would cost too much, and bring nothing back. It's not the time to dump money.


the rebuilding of New Orleans,
Why? Let it rest in peace. It will be cheaper to build a new city from scratch. And, you know, somewhere where it's actually needed.


and the re-design of the flawed levees that allowed for the Katrina disaster,
US is *really* not in a position to worry about that now. Not to mention that it won't help all that much with the next hurricane.


the development of sustainable power infrastructure,
The development of a pipe dream, on other terms.


To be blunt, there's plenty to do and fund that needs doing and funding, and now is a good time to do so.
Don't you understand that "bailout money" is not some suddenly found pile of gold, but a last-ditch attempt to scrape the bottom to patch the most critical financial problems? The country doesn't have the money.

Yes.

Link? I don't think FDR said that, so you must have the wrong President. Moreover, the point was that the basis of the modernization of the South was part of the New Deal. Yes, it wasn't ideal, but it happened.


Which won't be used anyway. Rail is expensive and not necessarily environmentally better than roads; often worse.
And there's plenty of "e-infrastructure" now, plus it's a commercial thing.

1. High Speed Rail has two primary advantages: first, that it can cut carbon emissions, and second, that it can improve the availability of transportation options. Moreover, high speed rail differs from regular rail.

2. E-infrastructure is poorly distributed and increasingly more and more inefficiently used. Exactly what you expect from a critical national resource being managed by a corporations. They just can't seem to get anything right.

A bridge fell down, big deal. Yes, there were about as many victims in this once-in-a-year accident as Iraq claims daily, and as US roads claim hourly. So?

A rebuild of all old bridges would cost too much, and bring nothing back. It's not the time to dump money.

And what happens when the Alaska Way Viaduct and Floating Bridges in Seattle come down? When bridges throughout the mid-west come down? How much does it cost? Now IS the time to dump money because, A) it will have a positive net-effect on the economy and B) it will cost us more later.


Why? Let it rest in peace. It will be cheaper to build a new city from scratch. And, you know, somewhere where it's actually needed.

Gee... Maybe because there are people there? I mean, I know that they're black people, and the GOP doesn't really want to spend money on them, but there are people there and there is a critical port city there too.

US is *really* not in a position to worry about that now. Not to mention that it won't help all that much with the next hurricane.

Yes we ARE in a position to worry about that now. More than ever! We are in a serious recession that verges upon depression. Do you know how you respond to a recession? You spend your way out. Basic Keynesian economics.

The development of a pipe dream, on other terms.

Hardly. Not if the development plan balances good research, a mix of targeted solar and wind, and generalized nuclear power, and the creation of good waste processing methods and sites. Only a pipe dream if you do it the stupid way and keep wasting money on an outdated energy source like oil and coal.

Don't you understand that "bailout money" is not some suddenly found pile of gold, but a last-ditch attempt to scrape the bottom to patch the most critical financial problems? The country doesn't have the money.

Poppycock! Bailout funds were a small but critical expenditure (there, I said it. Stop fucking hyperventilating. We can afford that amount with little REAL pain. Get used to it) meant to prevent the failure of the banking industry and the accompanying economic panic. Now, we must begin to invest in a stronger economy and a stimulus package intended to begin promoting growth in the economy again. We have the money we need, we just need to accept that the price is raising taxes on the rich and ending our retarded war in the middle east.

So I got this idea about how the government could better spend taxpayer money by subsidizing car purchases (i.e. consumer pays 60% and government uses the money from bailout to pay the other 40%) instead of bailing out auto companies directly. Theoretically, this would jump start the economy by encouraging car sales and creating new jobs. This could be potentially be a win-win solution as the taxpayers get to see their taxes at work and the auto companies recover. So what do you think about this idea? And do you have an idea on how the bailout money could be better spent?

government buys factories.
retool factories for military hardware.
Expand to acquire resources and slave(ahem cheap) labor.
sit back and enjoy next world war.

Moreover, the point was that the basis of the modernization of the South was part of the New Deal. Yes, it wasn't ideal, but it happened.
It was done in a horribly wasteful manner.

The quote is, obviously, from Ronald Reagan.


1. High Speed Rail has two primary advantages: first, that it can cut carbon emissions, and second, that it can improve the availability of transportation options. Moreover, high speed rail differs from regular rail.
No, it can't cut carbon emissions. Since there's so much weight per passenger, it actually consumes more fuel and releases more CO2 than normal car transport. And costs more, too.


2. E-infrastructure is poorly distributed and increasingly more and more inefficiently used. Exactly what you expect from a critical national resource being managed by a corporations. They just can't seem to get anything right.
I can download a movie in a few minutes, while not living in a city. Tell me about "poorly distributed" and "inefficiently used". Yeah.

If it was managed by government, we'd be only just getting off dialup.


How much does it cost? Now IS the time to dump money because, A) it will have a positive net-effect on the economy and B) it will cost us more later.
A) No, it won't.
B) No, it won't. Repairs should be done when needed, not when wanted.


Gee... Maybe because there are people there?
We need industries now, not people.


Do you know how you respond to a recession? You spend your way out. Basic Keynesian economics.
Yes. You lend another 10 trillion and spend it all out. Keynesian and fail are synonymous.

"Spending your way out" will delay the crisis a few years, only to strike with an even worse one then.


Hardly. Not if the development plan balances good research, a mix of targeted solar and wind,
That's three pipe dreams right here.

and generalized nuclear power,
Democrats are populist pussies, they'll never allow for anything that has the word "nuclear" in it.


Now, we must begin to invest
Invest WHAT?

The country is short of funds as it is, the only way to get more money is to print more. That is not "we have money", that is "as always we can take value out of the existing money and print more to spend ourselves". Feel the difference.

Does anyone bother to note where the bailout money is coming from? the government. Where does the money come from? Taxation, increased debt, and direct inflation of the money supply. Are any of these good for the economy? No. The whole concept of "Government bailouts" is bad to the core and will not make a long-term change.

It was done in a horribly wasteful manner.

The quote is, obviously, from Ronald Reagan.

Ah... Good old Ray-gun Ronnie. I don't take any information from a senile B-list actor seriously.
No, it can't cut carbon emissions. Since there's so much weight per passenger, it actually consumes more fuel and releases more CO2 than normal car transport. And costs more, too.

http://cleantechnica.com/2008/09/15/californias-220-mph-high-speed-train-will-be-emissions-free/

Oops... Looks like you've got that wrong, as well.

I can download a movie in a few minutes, while not living in a city. Tell me about "poorly distributed" and "inefficiently used". Yeah.

If it was managed by government, we'd be only just getting off dialup.

Heh. Personal annecdote makes you always correct! Verizon and co. are a bunch of first rate fuckups who have been more focussed on fucking with net neutrality than ensuring that quality internet is provided to the whole US.

A) No, it won't.
B) No, it won't. Repairs should be done when needed, not when wanted.

Oh... Nice. Empty responses with no facts because you know you're wrong. Come back when you understand elementary economics. I suggest reading Keynes before Limbaugh.

We need industries now, not people.

We need consumer confidence and a sustainable, well regulated economy right now, not poorly handled Herbert Hoover styled Corporate Socialism.



Yes. You lend another 10 trillion and spend it all out. Keynesian and fail are synonymous.

10 trillion would be highly excessive. I would target needed additional spending at about a half a trillion to a trillion dollars a year for about 3 years. Most of that can be generated by fixing the federal budget and raising marginal tax rate on the wealthy. We will have to take loans. That is true. But if we treat them properly, and don't cut taxes the moment we are out of the recession, we will pay them back. Deficit spending in time of recession must be accompanied by contractionary debt reservation during times of growth.

And even Austrians understand the idea of expansionary and contractionary fiscal policy. Only the Church of Rand can deny those ideas. And the Randroids are a bunch of mouth-breathing morons ANYWAY.

"Spending your way out" will delay the crisis a few years, only to strike with an even worse one then.

False. The goal is to stave of the negative effects of the negative cycle. The Fed does the same thing on the monetary side. Idealy we use both expansionary and contractionary policy to moderate all parts of the business cycle.


That's three pipe dreams right here.

Not hardly.

Democrats are populist pussies, they'll never allow for anything that has the word "nuclear" in it.

Then can I count on Republicans to do their job and bend Harry Reid over to demand nuclear power be added to the stimulus bill? Of course not... The Republicans are too busy fellating the oil execs and their terrorist buddies.

Invest WHAT?

The country is short of funds as it is, the only way to get more money is to print more. That is not "we have money", that is "as always we can take value out of the existing money and print more to spend ourselves". Feel the difference.

The sky isn't falling, Chicken Little. If you'd stop listening to CNN and WSJ freaking out over things, and stop to take a measured, rational response, you'd see that we can still take loans and change the marginal tax rate if necessary. Yes, a crisis requires a response. No, it doesn't require deciding that we're all doomed if we don't go back to Stone Age economics.

Poppycock! Bailout funds were a small but critical expenditure (there, I said it. Stop fucking hyperventilating. We can afford that amount with little REAL pain. Get used to it) meant to prevent the failure of the banking industry and the accompanying economic panic. Now, we must begin to invest in a stronger economy and a stimulus package intended to begin promoting growth in the economy again. We have the money we need, we just need to accept that the price is raising taxes on the rich and ending our retarded war in the middle east.

I don't consider about $8 trillion of loans, capital injections and guarantees a 'small but critical expenditure'.

Plus the government fucked up the execution. Things will only get worse from here on out as companies that are not 'friends of hank' club will ultimately get crowded because risk has been distorted beyond all recognition.

Eventually what's left of the private sector will be crushed, and the government will have to resort to printing. Then everybody will be unemployed and there will be martial law and shit. Then Adolf will show up. This is always how it ends.

I don't consider about $8 trillion of loans, capital injections and guarantees a 'small but critical expenditure'.

The bailout totaled less than a trillion dollars AND it will be repaid.

Plus the government fucked up the execution. Things will only get worse from here on out as companies that are not 'friends of hank' club will ultimately get crowded because risk has been distorted beyond all recognition.

No question that Paulson fucked up the execution and the Dems fucked up the bill. There should have been greater CEO benefits package restrictions, the money should have been better focussed, and the money should have been spent in part on homeowners.

Eventually what's left of the private sector will be crushed, and the government will have to resort to printing. Then everybody will be unemployed and there will be martial law and shit. Then Adolf will show up. This is always how it ends.

Um... No. No it isn't. That only happens in Ayn Rand novels, actually.

Then everybody will be unemployed and there will be martial law and shit.

Not everyone will be unemployed. Martial law doesn't enforce itself!

*polishes jackboots*

The bailout totaled less than a trillion dollars AND it will be repaid.

No it won't, and no it didn't. You are just thinking of TARP, which is one small part of all the money that has been thrown around in the past year. Do you have any idea how much CP the fed is now rolling for select companies?

Um... No. No it isn't. That only happens in Ayn Rand novels, actually.

Really? What do you think is going to happen then? There is an acute shortage of capital, and the government is doing its damnedest to makes sure that: A) there will be no fresh private capital formation; and, B), whatever capital there is gets funneled into industries that are making losses.

This ends up with bankruptcy for everyone.

"Um.. No.No." All you want. This is what happens when you don't let nature take its course. The size of private debt in the US is far to massive to ever pay back, it has to be defaulted and all the banks have to be flushed. Throwing everyone else into the pool to save them is just going to result in mass drownings.

Further it is quite clear you've never actually read an Ayn Rand novel. Because at least half the time they end up with demented architects blowing up housing projects, and they never end with Adolf.

Edit: And fuck homeowners too. The value of your investment may go down as well as up &c. Frankly, the ones that can't pay their mortgages should be more worried about their mortgage applications being scrutinized rather than bailouts.

Not everyone will be unemployed. Martial law doesn't enforce itself!

*polishes jackboots*

Good point.

Of course, people will point to FDR. But it is not the same thing. He started his new deal (although hoover had been doing stuff already) after three years of crushing default, so a lot of the excess had been purged by the time he got into office.

That is not the case here. Trying to keep the all the balls in the air is inevitably going to lead to collapse.

Hey, I got a great idea, how about giving that bailout money to the consumers! You know, the American tax payers!

Oops... Looks like you've got that wrong, as well.
Oops, looks like you're listening to quasi-environmental utopian lies and BS again.

It's fun to dream about free clean energy, but the fact is: virtually all energy in US is produced by coal.

And even if we take the partisan perfect-case estimates from your source, 3,350 GWh per "up to" 100 million passengers amounts to 33.5 kWh per passenger-trip, or 19 kilograms of coal, which produces about 45 kg of carbon dioxide. That is per passenger.

For comparison, at 384 miles of driving distance from SF to LA, a trip in a 38 HWy-mpg car (typical US-built Japanese brand car, not a bailed-out GM gas-guzzler) would take 10 gallons of gas, which emits 90 kg of CO2.
That means that as long as there are at least 2 people in the car, it breaks even with the train stuffed full of passengers (in practice, car will break even with just one person, as the train won't be full all the time). And, of course, it's cheaper to travel by car anyway.
With 4 people in it, the car will produce twice less carbon emissions per passenger than the train.


And more importantly, that is not counting all the fairly massive emissions in the process of building that railway and its trains - while cars already exist. With that in mind, the train will most definitely produce more CO2 emissions than traveling by cars. It may be more convenient for some, but it's more environmentally damaging.



Come back when you understand elementary economics.
As a matter of fact, I had a number of semesters in two separate economic courses. Good grades and all that. And I've been fairly successful for a non-professional with managing my savings on the stock market. Even lost a lot less in the crisis than gained in the months before it. So I have reasons to suspect I understand economics better then you.
Your keynesian-paradiso economics != real economics.


The sky isn't falling, Chicken Little. [...] you'd see that we can still take loans and change the marginal tax rate if necessary.
If necessary. You're still clinging on to the idea that money can be produced out of nothing by fiddling with interest and tax rates. Well, news for you: it can't. The money printed that way is taken out of the part of the economy that actually works.

Hey, I got a great idea, how about giving that bailout money to the consumers! You know, the American tax payers!

No. Americans need to learn their place. Only yesterday Barry told us we all have to have some skin in the game (unless your name is Jamie Dimon, or Rubin or shit) and we all have to sacrifice and shit.

I am guessing that means he is going to cut social security benefits (lose the wage adjustment) and remove the contribution caps.

Any surplus from this operation will be funneled into AIG et al.

If necessary. You're still clinging on to the idea that money can be produced out of nothing by fiddling with interest and tax rates. Well, news for you: it can't. The money printed that way is taken out of the part of the economy that actually works.

He doesn't understand that tax revenues are collapsing because the tax base is disappearing.

At the same time, Vetalia, you're being mildly disingenuous. Government spending can be significantly more effective, in particular during periods of low consumer confidence. Public works projects not only are critical to the upkeep of failing infrastructure (See Seattle, St. Paul, et al), but come with a multiplier effect that putting money right into the hands of consumers doesn't have. In cases of recession, you need to bolster consumer confidence. A 2,300 dollar stimulus won't do that. It might help individual households, but the cycle remains. By a mixed strategy of stimulus, public works, and new industry development, we have a much more visible, and more effective means of bolstering consumer confidence.

Oh, I'm a firm supporter of infrastructure development. I think, though, that infrastructure spending needs to be carefully planned and not rushed; building a bunch of ill-conceived projects would not generate any useful long-term economic benefits, nor would spending the money on incremental improvements for existing infrastructure rather than the large-scale projects we need.

The same is true with the financial bailout; it's a rushed hatchet-job that rewards people on the basis of incompetence without the kind of punishments these companies deserve for getting in to this mess in the first place. They need to be seriously punished for their mistakes just like they would in a fully functional market. Frankly, this bailout is one of the biggest mistakes in a long time; every single industry is going to try to steal its share of the pie, resulting in American taxpayers footing the bill for spending that they receive no direct benefit from.

Oh, there's the possibility that it might save jobs, but how likely do you think it is that companies will take the money and lay off the same number of workers regardless?