Sunday, March 8, 2009

I really wanted to post, and yes Republicans are insane

Sorry, for anybody anxiously awaiting another post from yours truly... I've been locked in on a never-ending e-mail debate with a friend of mine who hates it that Obama is continuously bailing out banks.

I really want to summarize some of my arguments (which I feel are getting more and more sophisticated as I'm learning more) and compose a blogpost, but I just haven't had time.

Just some quick thoughts, more later:

1) You can blame a lot of folks for this financial crisis, but the core blame really belongs to all of us, every single one of us. The fact is that we have incurred a lot of debt to the tune of 100% of our GDP. The last time we had this much debt you might ask? Yes, 1929. I know I have composed recently the idea that debt is good, and I stand behind that. But its good up to a point. Its good like desert is good, in small doses. Too much of it will kill us.

2) Our banks are in major trouble, basically the major banks are insolvent. But, the government has to find a way to preserve confidence in our banking system, and the best way he can do that (in my opinion) is to keep shoveling tax payer money into them. I just don't think now's the time to incur a Citibank bankruptcy.

3) I know two very depressing points. On the positive, I feel that we can really bounce back strong from this recession. And we have the president who can do it. We need to take this opportunity to make some significant changes. Thomas Friedman has a really nice op ed today right here. We just had stake conference today, and one comment from one of the speakers (a visiting General Authority from SLC) was that things are not going to be as they were. He talked about how we would need to learn to fix things rather than throwing stuff away... How we should learn to grow a garden, etc. Surprisingly, that's correlates quite nicely with Friedman's article.

4) Finally, yes, indeed Republicans are insane, I'm praying every day grateful we did not elect one for president:




and




Loved the thoughts here. The government is the only entity big enough to address the problems we are facing in our economy. The Republicans are in complete lala land on this.

I'm not saying this in the eyes of a partisan. I'm saying it because it's true. The leadership of the Republican party is insane.

4 comments:

H said...

Did I really just understand a post on money?! Here's my question: if we are all responsibly for this problem because of all the debt that we have taken on ourselves, then how is it the governments responsibility to bail us out? It seems like businesses (Payday Loans?!) and taxpayers are continually trying to keep the government out of their lives and livelihoods, but then when they get into trouble we all want a bailout. We can't cry, "it's my business how much debt I incur" and then turn around and say, "help! I can't pay my bills." I'm just saying that Americans seem to be greedy and want the best of both worlds: they want the govt. to stay out of their business, but then they want the govt. help when they fail. Maybe we want our cake and we want to eat it too, but we want the governtment to take on the calories and get fat for us. I don't know, I guess I don't really understand this money stuff. Like where the heck does the govt. get the bailout money?! Sheesh.

tempe turley said...

H,

I agree, but I would take a different approach, I don't believe the government should get out of our financial institutions lives.

By the way, its not the payday loans that are getting bailed out (as far as I know), its huge banks - like Citibank and Bank of America. Without a working banking system, our economy can't function. Because of that, the government has to step in, and because of that, we need good regulation...

Also, the government is borrowing much of that money its doling out...

Right now everyone is putting their cash (worldwide) into treasury bills so the government can borrow almost unlimited dollars at very low interest rates...

I think it has to do this to pull us through our problems...

H said...

I'm sure you're right, Payday loan places better not be getting bailed out. My point was that it is lending institutions that don't want regualtions on how much money they can lend people with little money to pay it back that might be creating this problem. How is it that these big banks are having problems? Did they lend money to people that didn't have the resources to pay it back. Or maybe they started out fine, but then other companies lent their clients too much money and now everyone is suffering. We are a world on want, want, want it now and pay for it later. I'm guilty, and I'm paying for it. I'm certainly not preaching here, just suggesting that some of us could really benefit from mom and pop govt. telling us when to stop borrowing, instead of bailing us out when we've screwed up. Does that make sense? Probably not, I don't understand money.

unqtious said...

Everyone's to blame, but there are two forces that's been at work here. An relentless faith in libertarian ideals of free market and greed. Eighty plus years after the last big economic meltdown, we are eerily looking at the same situation. Because, not only are we seeing our investors crushing our banks because of too much available debt. We, like our forefathers of 1929, are in a situation borne of relentless greed and undying faith in the free market.

Until I heard the phrase "too big to fail," I, too, was not unlike Bill Clinton, George Bush, and Alan Greenspan and most of the country. I still am, although much less so. I now see how poisonous investments can be to themselves, the banks, and the community as a whole, and banks have always faced crises similar to the one we are now experiencing. Clear back to time of Jesus, there was a bank run nearly crippled their financial system. Guess what happened then? The Roman government bailed out the banks.

The banking system would fail without government intervention. I think it's sad we really can't get this right, that we fail to understand government regulation is needed. Plus, government should only be pumping money into the system when it needs it. The tax cuts Bush implemented were not only unnecessary but harmful, as it gave more cash to lenders, and consequently more debt to debtors. Those cuts what happened over the last eight years have do little to help the economy long term. The government should have been shoring up its funds for a rainy day, like today, for example.