I accept the fact that businesses rely on credit

[ashling]

to make their cash flow system work to meet payroll etc. We are told that as a consequence of this crisis, they will not be able to get credit. However, it seems to me that we should be putting money into programs that will actually have a direct impact on credit. For instance, authorize the SBA to make direct loans for payroll and operating expenses, etc. while we are working out how to actually solve this problem.

Seriously, shouldn't we be dealing while the consequences of this problem rather than handing billions to the people that caused the problem?

[Nicholas D Wolfwood]

1. You can do that later.

Please - do yourself a favor and go read Obama's speech today. Actually, do everyone a favor, because statements like yours are the problem here.

[Hannah Bell]

7. i beg to differ. the enforcers of group think are the problem here.

[BrklynLiberal]

10. I did not see any problem with that idea...

Actually I thought it was brilliant.

This was meant as a response to #1.

[Hannah Bell]

12. go read obana's speech? obama will tell us what to think about the bailout?

[BrklynLiberal]

14. I'd rather listen to Dennis Kucinich....

I am an enthusiastic supporter of Obama, but I would bet thathe did not read this bill, and I know that Kucinich did.

[ashling]

21. Thank you.

I don't expect have right all of the answers, I just expected to be taken seriously. And I seriously think that the problem needs more than a weekend ... or a week ... worth of attention before throwing a trillion dollars at it. In the meantime, shouldn't government stand in the credit breech?

:hi:

[BrklynLiberal]

15. I agree with you...

[ddeclue]

17. Not a chance...

Let's fix the problems by helping out those with defaulted home loans and by RE-REGULATING financial markets. Just watch how fast Wall Street fixes its own problems when we threaten them with regulation!

Doug D.

[ashling]

19. I have not waded in on this topic yet

because of this type of answer to a serious question. This is a serious question. I in no way claim it is all of the answer. Maybe it is no part of the answer. However, I respectfully submit that it deserves serious consideration, not a pompous answer.

[Nicholas D Wolfwood]

45. You can't discuss anything seriously with people that don't want to obtain facts.

How else should I respond? "I know you have absolutely no knowledge of the situation, and despite nearly ALL reasoned evidence to the contrary, you still feel this bailout is unnecessary, but how do you really feel about it?" Really? That's what I should do? You can't argue logic with the illogical or ignorant! It just doesn't work, apparently.

[ashling]

46. You apparently have not read my posts before responding

I am not saying that a bailout is not necessary, but that rushing into it is folly. Especially under the Paulson plan as originally put forward.

[Nicholas D Wolfwood]

47. States are already being denied credit.

Businesses have already been put on notice that their lines of credit are doomed within weeks. Waiting much longer to get something done is going to cause a breaking point for a lot of people in this country. I'm never big on hasty decisions - whether personally or politically - but in this case, action is needed. We cannot allow our credit to dry up.

[ashling]

48. The government must step in to the credit breech.

I am suggesting that it can be done in a more direct way by empowering the government, under the appropriate agencies, to either insure private loans of necessity (i.e., for operating expenses, payroll, responsible business expansion, student loans, etc.) or making direct loans where the prospective lender cannot get private funding.

This would ease the credit crunch that you are worried about and allow us time to sort out the mess at the top. That 700 billion could be put to use immediately where it will do the most good.

We agree that action is needed now. I'm just suggesting a different approach.

[Nicholas D Wolfwood]

49. The problem with that is, simply, it'd never fly.

I'm not saying it's a wrong approach, but politically speaking, it's having the government become far more of a business entity than most people are comfortable with at this point (cue cries of socialism here.) And merely insuring the loans isn't going to solve the problem - that's been ruled out for quite some time, since the House Republicans had initially tried that and were rebuffed by pretty much everyone else (Dems, White House, Treasury, Senate R's.) I don't think insuring the loans would work anyway, as we're talking about a boatload of already-bad ones causing much of the problem in the first place, as banks lack the liquidity to provide new ones (ie. they don't have the cash on hand to back up new loans.) The only way to solve the problem is to dilute the pool, so to speak, either by injecting enough funds into the market that the stench of the bad loans is covered up, or through buying out the bad loans and somewhat removing it from the system. Long term, it can, and probably will subside on its own (with greatly enhanced regulation,) but we're talking really long term and not before things get very, very ugly - like depression-era ugly.

This is the kind of debate I'm okay with, by the way, trade actual opinions and proposals and not just shooting this down out of hand because it's Bush's idea or because it's "bailing out Wall Street." Those are, frankly, petty and meaningless games to be playing when we're faced with a genuine crisis. We can have that battle after we gain stability, and hell, I'll be happy to even lead that charge when the time is right.

As far as a proper use for that $700 billion - heck, I could come up with a good use for each dollar of that amount, most likely. Our infrastructure blows (education, energy, transportation,) and I truly believe that our only way out of this mess, long term, is to invest heavily on that. Directly creating new jobs and ensuring our children will be skilled enough to take on the jobs of the future (and today) will be our best bet, not relying on some mythical invisible hand that never really existed in the first place. I doubt we disagree on much of that. I doubt anyone on this board who opposes the bailout disagrees with that sentiment. The disagreement, as I see it, comes from a fundamental misunderstanding of the situation.

This is the problem with having a President with no credibility and who only knows how to fear-monger to move public opinion. Only the President of the United States can truly sit down with the American people and explain it to them, thoroughly and calmly. Neither Obama nor McCain can send this message - it's too politically charged of an environment for them. Nor is anyone else independent enough or qualified enough to do it. This failure is the cumulative failure of the Bush administration, plain and simple.

[mike_c]

24. Obama is utterly wrong about the need to bail out Wall Street...

...and his comments seriously damage his credibility, IMO.

[moodforaday]

36. The leader has spoken!

So shut up already. And bow your head when you do.

(:sarcasm: not needed, but I love the visual pun.)

[moodforaday]

35. Obama said what protections he wanted in the bill

But none of them WERE in the bill. Words vs facts.

Please don't tell people to go and read Obama's speech as if he were a messiah and his speech turned water into wine. There really is nothing in that speech that hasn't been written on DU since Monday morning. Please use factual arguments rather then calling for deference to the leader.

[drmeow]

2. Oh, there you go again, being reasonable and thoughtful.

You just need to TRUST them. They'll do the right thing and help all the little people. Don't worry your liberal little head about it.

[Cronus Protagonist]

3. I just talked with my biggest client in NYC - no credit crunch in evidence

They have an existng lne of credt to meet payroll and are obtaining another to expand the business. At no time were they under the impression that there is a credit squeeze. Smoke and mirrors. The fast cats on Wall street won't stop writing loans, it's how they make their money.

[TexasObserver]

11. I've talked to a lot of people in a lot of businesses, including banking. No credit crunch.

This is a problem of big banks and overextended borrowers.

I've talked to people in all sorts of businesses, and no one has seen any problem with credit markets. This problem is unique to the big banks and related businesses that got in over their heads on risky paper, taking stupid risks. Now they can't pay up.

I want to let them fail. There's no such thing as a company that is too big to fail. The bad ones have earned the right to fail, and should be put down, like a lame horse.

[RC]

16. Maybe that's why they had to have that bailout so fast.

If we wait too long we might find out there is no need for a bailout.

In which case can we start putting the fat cats in prison yet?

[TexasObserver]

18. Yes, they were supposed to have a big rush and quick passage.

oops!

This bailout is not about fixing anything but the books of selected companies that Bush et al. want to clean up on their watch, at taxpayer expense.

[Realityhack]

20. No problem with the credit market huh?

Care to explain why the Fed suddenly has to secure interbank loans?

Oh that's right because their IS a problem in the credit market. It just hasn't filtered down yet.

[TexasObserver]

23. I'm sorry you don't understand how bust cycles work.

I said what I intended to say.

It's a Problem for big banks because they're in financial trouble. I don't care if they fail, and wish they would. Get the bad banks liquidated, new banks in place of them, and we can start the process of hitting bottom and rebuilding.

I'm sorry you don't understand how bust cycles work.

[Hannah Bell]

40. Yes, why don't you explain why the Fed suddenly has to secure interbank loans?

Go on, explain why.

[moodforaday]

37. You just don't listen, do you.

It's going to happen tomorrow. To-mor-row. Or next week. Or next month, you'll see. And you'll be sorry then. See you in the bread line, race you to the pink slip!

Of course the proponents of the bailout don't account for the fact that if it goes through, there will be no bread at the end of the line, because there will be no public money with which to buy it. Never mind, just hand over the money or you'll be triple sorry!

[Cronus Protagonist]

41. OK, I'm listenng. Show me proof the bailout will work.

Don't forget to include HOW and also HOW we will manage it.

[moodforaday]

44. I thought that post was dripping enough

but if it wasn't, my apologies! I meant :sarcasm:

[sharesunited]

4. How about they give me a loan, and then forgive repayment.

[BrklynLiberal]

5. Why couldn't anyone in Congress come up with that idea..? Instead of waiting for the wealth to

"trickle down", why don't we give it directly to those that need it most? How about paying off some of the mortgages that are in trouble? How about paying for some health care for those that are without? Your idea of SBA loans is brilliant. The problem of course is that none of BushCo cronies will make money like that.

[ashling]

27. Thanks again!

To more fully flesh out my idea: We should use the FHA to work with homeowners and mortgages, the SBa for small businesses, and other appropriate institutions. These institutions could insure private loans up to a certain amount or lend directly where the prospective borrower cannot get private lending.

All of this could be under the auspices of a Federal Credit Trust which would apportion it to the homeowners, businesses, etc. from the $700 billion. This would allow us time to come up with a reasoned solution if indeed there turns out to be a crisis. Maybe there is a crisis, but one that will fix itself in time if there are protections available for the little guy during this period of adjustment. If it turns out that there is no crisis, all the better.

How about contributing to the fund by a surtax on lending institutions ... at least to contribute to the public loans. This should provide these institutions with an incentive to fix the problems themselves.

Oh, and, here's a novel idea, how about a New Deal for every American?

[Eric J in MN]

6. I agree. Give the help to small businesses to maintain and expand...

...not to big businesses so they can get rid of their bad investments.

[AllieB]

8. The SBA's operating budget has been shrunk under Bush.

It's a very small agency to begin with and doesn't have a whole lot of money to dole out.

[BrklynLiberal]

13. The whole point is to change that. Give the billions to them and authorize them, under supervision,

to give the money to the bottom of the trickle down ladder, instead of the top.
This money should be given back to the taxpayers, directly...not to the very people whose greed is responsible for this mess.

[ashling]

30. True, but what about that 700 billion

why not fund the SBA, FHA, etc.

[Romulox]

9. Nope. The ONLY way credit will be available on Main Street is if the money passes through the hands

of Saudi sovereign wealth funds.

It's the only way, and you are basically a worse version of Hitler or an imbecile (take your pick) for not understanding why!



:sarcasm:

[jtrockville]

22. EXCELLENT Idea. Others here have made the same suggestion:

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=4132637&mesg_id=4132637

Today, I submitted this alternative to:
Michael Moore
Rachel Maddow
My two senators (Mikulski, Cardin)
My representative (Van Hollen)
House and Senate leaders (Pelosi, Reid)
House committee chair (B. Frank)

[4 t 4]

26. I don't understand why

if you have a line a credit with a failing bank... you can't just go to a solvent bank for a new line of credit? Like Chase they are doing great. I went to bed and when I woke up Wa Mu had failed and been bought by Chase. They also bought Bank One who bought J P Morgan. They're huge.

[BrklynLiberal]

28. It would seem that there are greater minds at DU than in Congress...

:thumbsup: :hi: :shrug:

[moodforaday]

38. Not necessarily greater,

just not constrained by political expediency and the need to assure constant flow of sponsor cash.

[ashling]

31. I figured that someone else had come to the same conclusion

prosperity may trickle down, but when its pain, it pours!

[REACTIVATED IN CT]

34. I came to the same conclusion over the weekend and emailed

suggestions similar to Ashling's to all my congresscritters

Student loans have been named as a potential problem. Solution - fund the state universities so they can offer free tuition. Fed govt can be student loan lender if you want to go to a private college.

If we can come up with $700,000,000,000 to bail out Wall Street, we can come up with the money to fund a bottom-up solution.

[leftofthedial]

25. this bailout has nothing to do with solving problems

it is an extortion racket, pure and simple

"Shame about that broken financial window. What did they use, a stock market brick? Maybe you should, you know, give us a trillion bucks, otherwise we, uh, can't guarantee your economy won't maybe burn down."

[BrklynLiberal]

29. I think it is called "BLACKMAIL"

[ashling]

32. "Blackmail" is a two way street

Why not protect the little guy and give the fat cats the incentive to clean up their mess?♠

[BrklynLiberal]

33. I am in total agreement.

[TreasonousBastard]

39. So, when you write your check to the...

electric company and your bank doesn't have cash on hand to cover it when it clears, how does the SBA help?

Whatever the plan is, it has to start with banks' liquidity or nothing else that happens will work for long.

[jtrockville]

42. Sure, some banks may fail. It's happened before.

It wasn't terribly disastrous.

[TreasonousBastard]

50. It sure was in the 30s. n/t

[jtrockville]

51. Not just the great depression. The 80's was riddled with bank failures.

We survived:
http://www.fdic.gov/about/learn/learning/when/1980s.html

[TreasonousBastard]

53. I think you missed my point...

I know we had many bank failures in the 80s, and it caused nary a ripple in our general affairs.

The 30s though, were different. Perhaps we won't need bank holidays any more, but perhaps we will...

[jtrockville]

55. I guess I did.

I thought you were advocating injecting liquidity into banks at any cost. Clearly the alternative (letting banks who have engaged in high risk behavior fail) doesn't always lead to disaster.

[OakCliffDem]

43. The rich financial professionals should be the last ones to get bailed out

The Government is simply insuring their profits no matter how big a risk they take

[Imagevision]

52. In an election year - what do you expect 4 weeks before the GE. Obama said

the bill can be tweaked later - first you need credible leadership,,,

[napi21]

54. SBA doesn't deal with short term credit, and that's what we're

talking about here.

[ashling]

56. And we don't generally throw $700 billion at Wall Street

If you could do one, you could do the other ... or create a new agency for that purpose ...

The point is that they could if the are empowered to.