Where does the money come from? Pre all of this mess we were projected to run a 400+ billion dollar defecit. We have a gigantic debt on top of that. Now we are spending hundreds of billions to bail out companies and might have to do another trillion on top of that? Sounds like a recipe for disaster.
Attention: Chicoms and Saudi shoppers-we still hate you,but
we such a deal on a trillion dollars worth of T-bills!
I don’t know where it’s coming from but I know where some of it is going, into my pocket. I bought 40K of an industrial stock 2 days ago and it’s up over 22% since purchase. Thank you Paine Webber! Oh wait, they’re gone. Thank you me! hehehehe. I guess it’s just a big ole casino after all.
Don’t forget that our government is an estimated $90 trillion short (in today’s dollars) in meeting future Medicare, Medicaid and Social Security obligations.
This “plan” is truly a case of the bankrupt bailing out the broke.
Roman Empire here we come.
The way his proposal is funded, it comes from inflating the currency. If the economy recovers quickly, it could cost nothing. If we have an extended recession, we will see some serious inflation these coming years that could rival the late 70s.
Out of thin air...We're paying interest on money or value that only exists on some government computer. It's is not even real.
The only remaining resource that the United States has that's big enough to cover this is the dollar. Roughly speaking, they print (or click up on a computer screen) new dollars in quantities similar to what already exist. Each dollar in your wallet or bank account becomes worth half what it is worth now.
Take that over-priced home in California. It sold last year for $600,000 (all borrowed money, on an option ARM, nothing down, tiny payments). It would soon have been in foreclosure for $300,000. With this rescue plan, and inflation, it can sell again for $600,000 (of these new dollars). That mortgage will be covered.
In a word, inflation. That is the essential way that excess debt must be liquidated, short of outright default.
We won't see this inflation so much right away. Due in part to the government inflation statistics being B.S., and due in part to the six months to two years that it takes for such monetary profligacy to filter through to the prices we pay at the cash register and gas pump, and due in part to the huge debt deflation that has been occurring that will continue sucking up these excess dollars like a thirsty sponge, inflation will continue to seem mild until sometime in a year or two.
But with this bailout, and with the already known, much larger, unfunded mandates of Social Security and Medicare, substantial inflation is a lead pipe certainty.
I'm not predicting Zimbabwe hyperinflation here, though there is some increased risk of that. I'm talking more like Carter-year inflation, for several years running, more difficult to stamp out than it was in the 1970's, due to the deeper, larger, causes of it this time.