Whats the point in being a fiscally conservative politician?

Discussion in 'Politics & Religion' started by ChkitOut, Jul 12, 2012.

  1. You're always swimming up stream.

    If its next to impossible to repeal entitlement programs and every 10-20 years or so the spending party takes over government and signs new massive never ending spending into law then you're gauranteed to lose the fiscal fight.

    So wouldn't a better strategy be to let the "progressives" bankrupt the country and let US fall into massive despair and say "told you so" :cool:
     
  2. Ricter

    Ricter

    Fortunately for you and me, many people cling to life and to doing what's right, too many to just give up and roll over. This latest crisis of capitalism is going to change our course for decades to come, in a positive way.
     
  3. jem

    jem

    except it was a crisis of debt spending and cronism.

    In short is was govt not doing what govt should do...
    and govt spending money in areas when it shouldn't.

    Its actually a crises caused by allowing our politicians to be purchased.
    Which if you think about it is...

    truly fricken ridiculous.
     
  4. Ricter

    Ricter

    Debt is the essence of capitalism.
     
  5. Leverage, a specific application of debt, is an important part of capitalism; but it is not the "essence." Competition is the essence of capitalism.

    Simply borrowing and spending is not leverage. Very few people, democrats or republicans, understand this concept.

    Cuba is heavily in debt. Are they capitalists?

    Having a credit card does not make anyone a capitalist.
     
  6. Mit Romney knows the proper use of debt. Its called leveraged buyouts. :D

    Although I have to say, the last company i worked for was taken over by private equity and it went from a steady earning clean balance sheet firm to one that is saddled with MASSIVE debt and they are having trouble with the debt not to mention its going past the traditional 5 year flip plan of private equity.

    So, its a bad investment for the prive equity firm and also bad for the company itself. lose lose.
    (although the previous shareholders made like bandits) now every penny in earnings has to go towards the debt service. So, little if any raises to employess and no reinvestment in new and bigger ideas.

    What a crap deal that was.
     
  7. Hmm.
    You might want to observe what happens before you come to a conclusion. Starting from the conclusion is a bit upside down.
     
  8. no dude, there is zero chance of the PE firm and its investors making money on this deal. Zero. They overpaid big time.
     
  9. Apparently I didn't make myself clear.

    So:

    Private equity or LBOs is classic "Ponzi finance" or "speculative finance", depending on how bad the deal is for the hapless people who have to generate the money to service the debt, otherwise known as employees.

    To quote:



    LBOs make a lot of money for the folks who facilitate the deal (investment bankers), and a lot of money for the folks selling out; unlike your guys, Romney was usually very good at making sure he was right there with the guys selling out.
    Employees are left holding the bag. As in your case and a host of others.
    You'll be hearing quite a lot about this during the campaign.
     
  10. oh i gotcha, so you agree with me that LBO's are complete crap sometimes.

    There is the moral end of it, yes.. the 'company' which includes the employees and the service that company provides towards the good of society is being put in jeopardy because of and LBO

    or..

    you could say, well, i start a company, it makes money, i am the biggest stake holder, private equity offers to buy it out and I say, heck yeah! I cash out and who cares what happens to the firm because if it fails then it makes room for someone else to take its place. Maybe do it better.



    and yeah.. this is what is happening right now to my old firm. they keep refinancing the debt. its silly.

    - for speculative finance, a firm must roll over debt because income flows are expected to only cover interest costs. None of the principal is paid off.
     
    #10     Jul 12, 2012