Bitter Medicine Is Better For Sick Us Economy

[brahmburgers]

A young man named Brandon Pilzner wrote a good article where he articulates why the US market should be left to market forces, and not be bailed out - as is happening now on an on-going basis.

First 3 paragraphs:

How is the U.S. going to pay for the financial bailout, the stimulus package, and the new proposed housing bill? Well, we know that the new administration will not increase taxes to fund these “last-resort” projects. So, the U.S will do what we do best: create money out of thin air. Every time I turn on the TV, I see a once great capitalistic nation turn even closer to a socialist nation.

Obama’s stimulus plan of creating jobs by building infrastructure cannot work because he is being poorly advised. The solutions proposed by his economic team are going to make this problem worse in the future. All of these bailouts and stimulus packages are just to perceive a cushion for the fall, when in reality the financing of these so-called lucrative projects are non-existent. The Fed is destroying the U.S. dollar by printing money to fund the ‘cushion’ for our economy. We are not going to be able to spend ourselves into prosperity like this administration thinks. They are trying to keep housing and stock prices high in order to retain the paper wealth of these assets, which has vanished from excessive credit, and poor allocation of investments from past administrations.

Now we are trying to get this credit going again, and the administration thinks that by bailing out the financials, fixing the mortgages, and providing stimulus to the nation with money and credit created from thin air that they are going to produce long-term growth for our nation. In reality, it is adding to our national debt in alarming amounts.

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full article here

Edited February 22, 2009 by brahmburgers

[samuibeachcomber]

did n't get to read the full article,but it sounds like commonsense,and we've all been saying the samething on TV.

Why did the US and UK goverments in particular do this bailout thing?

because if they did n't the collapse would have been swift and horrendous,and they would have been kicked out of power,and thats the one thing they would hate to lose.plus we all know that they are complicite with the bankers and financial gurus,so what they are doing is self serving.however they are only postponing the inevitable

[mommysboy]

It can't be left to market forces and the banks need to be stabilised to prevent even worse damage to the economy.

But I am broadly in agreement with the article and I feel that bankers, perhaps even some staff at a branch level should be punished, some through the criminal courts.

I also believe that there is no point bailing out any other sector, wasted money and indeed against the moral good.

Banks need to learn a hard lesson, as indeed do many who took out ridiculous loans.

[PeaceBlondie]

The politicians sold their souls to capitalism over a century ago, and they will print dollars and euros and pounds forever to save capitalism. This is not socialism, but it is semi-liberal governments bailing out bankers. The politicians refuse to realize that street sweepers and hod-carriers could manage banks better.

[teatree]

The politicians sold their souls to capitalism over a century ago, and they will print dollars and euros and pounds forever to save capitalism. This is not socialism, but it is semi-liberal governments bailing out bankers. The politicians refuse to realize that street sweepers and hod-carriers could manage banks better.

Not socialism, Fascism

[H2oDunc]

Fully agree Teatree it isn't socialism that is happening in the US but Fascism. Have a read of " the rise of the fourth reich " by Jim Marrs if you can get a copy. It certainly opened my eyes to what is happening there.

[AlexLah]

Look this video: http://video.google.com/videoplay?docid=-515319560256183936

It is called: The Money Masters, it is 3.5 hours but very informative. Just watch half an hour a day, it is fun

[BEENTHEREDONETHAT]

What truly pi-sses me off is the government dumps money by the armloads to the people that caused this in the first place. Then they reward the people who bought much more than they could afford, all on credit.

Now the poor Joe who managed his money paid his bills had savings for his retirement is left to pay the bill for all the other mongrels

The only cure for a recession is to have it, all they are doing is making it bigger and it will last much longer. On CNBC this morning they said Asia would bounce back fairly soon but they see the recession in the US and Europe lasting for over 10 years.

I for one would much rather sit it out here than any other place I can think of.

[brahmburgers]

What truly pi-sses me off is the government dumps money by the armloads to the people that caused this in the first place. Then they reward the people who bought much more than they could afford, all on credit.

Now the poor Joe who managed his money paid his bills had savings for his retirement is left to pay the bill for all the other mongrels

The only cure for a recession is to have it, all they are doing is making it bigger and it will last much longer. On CNBC this morning they said Asia would bounce back fairly soon but they see the recession in the US and Europe lasting for over 10 years.

I for one would much rather sit it out here than any other place I can think of.

I agree, there's no hard place for the fattest cats to fall. Similar to the S&L bailout in the US years ago, in which one of W.Bush's brothers got bailed out, along with the super rich Hunt brothers (silver speculators) a lot of others who got too greedy and made big mistakes. In the current imbroglio, throwing good money after bad money (bailing out the big 3 automakers, for example) might delay the inevitable - but it also might not help much, and the world's largest economies may still continue to tank on the backs of poorly managed businesses. I say let the marketplace fall where it may. Let badly managed businesses tank and allow well managed businesses to sprout out of the ashes.

An example of poorly managed company: GM who kept popping out big gas-guzzling cars - while having to run to the bank for a loan every week, just make its payroll and pay pensions.

[cclub75]

It's getting better and bigger.

Check the latest news about AIG... they were silent since their last bailout... but of course it's not enough. Much bigger figures than for the car industry.

It's crazy.

Feb. 23 (Bloomberg) -- American International Group Inc., the insurer rescued by the government, is in talks with the U.S. for more funding as it prepares to report the biggest corporate loss in American history, CNBC reported, citing unidentified people familiar with the situation.

AIG may report a loss of as much as $60 billion, CNBC’s David Faber said. The company is also exploring bankruptcy, which is an unlikely outcome, Faber said.

A loss may cast doubt on the New York-based insurer’s ability to repay the government, which controls 80 percent of the shares. AIG’s rescue package was expanded to about $150 billion in November as regulators tried to reduce losses at firms that did business with the company. The insurer posted more than $60 billion in writedowns and unrealized losses in two years through Sept. 30, 2008.

Fourth-quarter results, which may be announced next week, will probably include writedowns on assets including securities tied to commercial mortgages, CNBC said today. The company’s board will meet this weekend to discuss another expansion of the rescue, the network reported. AIG spokeswoman Christina Pretto didn’t immediately return a call from Bloomberg seeking comment.

http://bloomberg.com/apps/news?pid=2060108...&refer=home