Get ready for some really stupid answers.
The average Joe Biden will be fine. The other average Joes, not so much...
It has affected my life by causing me to feel embarrassed for my country.
Most of us are not old enough to appreciate what a true collapse of the system will mean. At the very least will come the shock of being forced to live within our means. And those who are in deep debt will lose what they possess but do not technically own. We also have to remember that during the depression some people managed to make money and others weathered the storm by becoming more self-sufficient. It is also, I fear, an opportunity for the enemies of freedom and capitalism to prosper.
Strickly economically speaking, cost of liquid capital would skyrocket.
A few banks that would be left standing would be able to charge anything they want for morgages or loans.
Oil & commodity prices drop, coasing deflation, yes, deflation.
As far as average Joe is concerned, he won’t be able to get a loan or morgage of any kind, period. Let’s see - housing prices drop further, car sales - drop further.
Unemployment skyrockets, as companies can’t borrow.
From previous lessons in economics, it should last about 3 years.
I haven’t seen your answer yet. Mine is do we REALLY want to roll the dice and find out how bad it would get? Does ANYONE really KNOW how bad it would get?
Nothing. No emergency here.
If this were a real emergency, the traders on wall street would have already liquidated all their positions and taken what profits they could take earlier this week. They would not wait one minute for the chance of a bailout later, ie. a tax giveaway plan from Congress.
A real emergency would look like what happened to the stock market after September 11th. This is not an emergency.
The productive people will pick themselves up and keep moving.
Aside from the economic implications, I’m most concerned that the people(Paulson, GWB, admin) making the decision will not be in power in a few weeks. They don’t have the following years to preside over the country after their decision. IMO, this is a good enough reason to pass a stop gap measure until the new admin(hopefully McCain) takes over.
The bad actors are littered around DC. The enablers are the rhinos who remain silent along with the media and back bench talk show hosts.
Term limits are the answer.
It will be an outstanding time for our enemies to kick us while we are down.
Personally? Not sure.
The Question should be ( what happens if we do a bailout), The wallstreet money makers will by and large take as much as possible off the top. We will pay to much for bad assets, with no oversite. Two years or two months from now we will be in the same ( leaky ) boat.
Should we not do the bailout it will be painfull, very painfull, for about four years or more, if we learn and repair our system. Should we not take heed, and keep going the way we are we will be in the longest time of economic down turn in modern history, ( the last 100 years or so)
Thoughts of a CFO!
We have a recession which eventually leads to growth. Just like it has before. Big government will be the loser. They can’t afford to spend in a recession.
If the bailout does not go thru it probably will help the Dems a great deal, if Reps are seen to be the cause. The deal, disastrous as it is for the taxpayer, will not prevent or stop the economic crash that is ongoing. A few hundred billion is simply too small to stop the unwinding in progress now which is in the multiple trillions....Billions are not enough to arrest a problem in the TRILLLIONS. Already, the world has probably lost confidence in loaning the US money via the Tbill purchase mechanism...the July TIC report was in significant negative territory...more redemptions than purchases. Probably ditto for Aug. and Sept. and beyond.
Fannie and Freddie alone have about $5 trillion of bad mortgages that will not be liquidated at satisfactory prices. Paulson also wants all kinds of other loan insolvencies (auto and student loans, etc) and foreign banks bailed out as well. He literally wants authority to bail out anything he wants. Foreign banks were sold toxic mortgages by the US and they want their money back and the instruments repatriated back to the US to die....he can do it if Congress lets him.
Mainstreet is going to get wiped out no matter what. The world is instantly informed and very educated, more than our elected representatives, and, the die is already cast.
Everybody forgives everybody else’s debts.
We call it all even.
We start over Jan. 1, 2009.
See? Easy.