U.S. Pledges Top $7.7 Trillion to Ease Frozen Credit

[frigidmagi]

Bloomberg

[quote]The U.S. government is prepared to provide more than $7.76 trillion on behalf of American taxpayers after guaranteeing $306 billion of Citigroup Inc. debt yesterday. The pledges, amounting to half the value of everything produced in the nation last year, are intended to rescue the financial system after the credit markets seized up 15 months ago.

The unprecedented pledge of funds includes $3.18 trillion already tapped by financial institutions in the biggest response to an economic emergency since the New Deal of the 1930s, according to data compiled by Bloomberg. The commitment dwarfs the plan approved by lawmakers, the Treasury Department’s $700 billion Troubled Asset Relief Program. Federal Reserve lending last week was 1,900 times the weekly average for the three years before the crisis.

When Congress approved the TARP on Oct. 3, Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson acknowledged the need for transparency and oversight. Now, as regulators commit far more money while refusing to disclose loan recipients or reveal the collateral they are taking in return, some Congress members are calling for the Fed to be reined in.

“Whether it’s lending or spending, it’s tax dollars that are going out the window and we end up holding collateral we don’t know anything about,â€

[SirNitram]

Violent culling of all financial firms until it is back to 8% of the GDP would be a good start. Hint: What happens if you nearly triple a sector of business that produces nothing but fees for itself...?

Also: Money for financials: $7.7T
Money for Automakers, who actually Make Shit, and contribute to US Exports, employ 25 million people total, and have actually offered to have their CEO's paid only $1 a year during repaying their loans? $0.

The US feds has fucked up priorities.

[frigidmagi]

Not to mention of the big 3 go under the foreign firms will pull their plants, meaning millions of Americans will lost their jobs, their homes and everything fucking else!

[SirNitram]

Not to mention of the big 3 go under the foreign firms will pull their plants, meaning millions of Americans will lost their jobs, their homes and everything fucking else!

Foreign firms, parts manufacturers, hell entire towns will go under, because the industrial plants associated are their reason for being. It's an economic neutron bomb. Leaves buildings standing, sure. No people though.

[The Minx]

Oh Lord God. No. Okay, how about fucking NO! This is fucking ridiculous! We've already given them 2.75 trillion dollars and they've done what? Paid every exec his yearly bonus (why? Just what tell me what the fuck have any of you idiot suits done to deserve a bonus? Do you get extra cash for fucking others over? In that case sure, why not, I mean you have practically crashed the economy of the US!) and had huge parties and then asked for more money.

I would have said "no" to the first 700 billion dollar plan. The hard truth is that failing institutions should not be rescued even if that causes collateral harm, since not only does it place the nation more in debt and for longer, but it also rewards incompetence and keeps the idiots in position of power for longer. Worse, it makes them addicted to bailouts as they get the (unfortunately correct) idea that they can simply whine for more and more.

Rescuing plants that produce a large number of jobs and are the bedrock of large communities like the big three are more tricky, but even here, they should not simply be given handouts.

Damn it all no! I can only get a lousy 30 billion dollars to build trains to get people to and from their homes but you jackasses get over 9 trillion dollars?!?

To hell with this, folks I got a new plan. Make your own name for it because I'm only calling it the fuck you back plan.

The assholes over in Wall street don't get a single red fucking cent, unless they agree to hand over everything and forfeit their pay and stocks. Their planes? Gone! Their golden little parachutes? GONE! Their yearly bonus? G-O-N-E. You don't like it? There's the bloody window, smile for the concrete.

The correct name for the plan you describe would be "capitalism", a long-gone system where the underlying philosophy was that each individual (both consumer and investor) took personal responsibility for their own financial decisions.

God as my witness I would rather see the government run this, I would rather have fucking full blown socialism in my own back yard, the government running everything that is currently a private sector service, then keep handing these feckless, stupid, over-paid, over-tailored pigs one more cent of tax money. Not one more damn cent!

Yes, that bloody useless Senator and his congress buddies are getting a letter for all the good that will do.

Socialism -- where failing government owned institutions and companies are bailed out with taxpayer money and government loans.

This is it, or close enough. The only difference is that the companies are owned by friends of the government rather than the government itself directly. OK: I take that back. The difference is also that profits are privatized. This is corporatism, not socialism.

Just one example: where was Poulson before he became secretary of the Treasury? And which institutions are now being bailed out as he feigns shock and outrage at the corruption resulting from the so-called "deregulation" (read: de-Rule-of-Law-ion)?

The monkeys have the keys to the banana plantation and are playing both ends against the middle.

[SirNitram]

Minx? The Big 3 aren't asking for handouts. Just loans. Loans involve repayment.

[The Minx]

Minx? The Big 3 aren't asking for handouts. Just loans. Loans involve repayment.

Yeah sorry, I was too quick on the draw there. Commenting on the big 3 was actually an edit I threw in after I noticed you and frigidmagi lamenting the lack of support for them and wanted to not make it look like I was going after that... and then I had forgotten that they were NOT asking for handouts. Loans are OK (assuming that they are in a position to pay back)


But I stand by the rest of my rants.

[SirNitram]

Like most debtors, if they are not in a position to pay, they go to Chapter 11 Bankruptcy and must work out a repayment plan. Of course, given the rapidity with which one can expect the entire auto industry to die on the vine after that, what you will actually get is a Chapter 7-sold factory or twelve and no one to staff them.

And 130 billion in economic damage on the taxpayer bill.

[The Minx]

Like most debtors, if they are not in a position to pay, they go to Chapter 11 Bankruptcy and must work out a repayment plan. Of course, given the rapidity with which one can expect the entire auto industry to die on the vine after that, what you will actually get is a Chapter 7-sold factory or twelve and no one to staff them.

And 130 billion in economic damage on the taxpayer bill.

Unfortunately, Chapter 11 seems to have become just another way by which incompetent management can be given an breath of fresh life. I really can't see a way in which they can ultimately keep going without some major restructuring, loans or no loans.


IIRC, Chapter 7 is actually the more common form of bankruptcy.

[SirNitram]

Hence the automakers crawling back on hands and knees to offer examples of how. Even the UAW is offering huge cuts to keep the trio alive.