The Government's Solution....What It Really Is.....

Discussion in 'Economics' started by libertad, Sep 19, 2008.

  1. The government solution is to simply provide qualified assistance to those business labels that are attached to the problem assets which are mostly securitized mortgages, credit cards, etc....

    In return for this assistance, the government will try to structure some of these deals whereby there will be some equity coming back to the US taxpayers.....

    The amount that has been lost in realestate, credit card, etc. securitized holdings could well be over $2 Trillion....could be more.....

    The only way to pay for it is to extend the payback period for as long as possible....with the smallest payment requirements as possible....such that the new debt will/can be in good standing.....

    So what will pay for the solution will come from the assets transferred to the government, the partial payback from structured deals, higher taxes, and printing money.....

    At least there is some form of organized plan....versus no plan....

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    What is of particular interest is that some of the people who were barking the loudest for assistance, participated in bonuses paid from these problem assets....and are now going to the trough one more time....
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    Money market funds, annuity based pensions, and other conservative categories were going to be affected which are broadly thought of as safe assets by the public.....this would be after no real growth in stocks since 2000.....
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    Additionally, what one really has to be sensitive to is just how closely connected GS, MS are connected to changing US Government policies......
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    But whatever the case....this is going to be a greater than $2Trillion new liability to the US Government.....

    To be paid back for a long long period of time.....just to have the payments as small as possible......

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    So the question remains....is this a better move than to start seeing annuities and money markets fail, in addition to adding a far greater amount to the fdic ?
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    In all fairness....the congress should provide the minutes of their emergency meeting to the public which has made them make this rather hasty decision....

    Transparency is very important now....This is the only way to gain trust.....