Bailout @ MindSay 
I am really annoyed at one aspect of the car program that is going on right now.
You know I'm not much of an Obama fan... Well, this CARS program is something I was looking forward to. I was torn within, should I look into it further? Should I write it up as wastefull government spending? Is it just another hand-out??? I mean it, I was really torn up about it..I drive an older vehicle.
My 1994 Ford e-150 has over 300k miles, needs transmision work, needs suspension work, needs to stop dripping oil on everyones driveway, needs to get better gas mileage. It gets 11.5 mpg on a good day.
My wife had an older Caravan which she was happy to drive, until the transmission went out the second time. If it had not broke so soon, perhaps we would have taken it for a trade in when this CARS program opened up. Instead, we traded it for a not so old Windstar. Still, not a new car, but perhaps better in many ways. Some things we like, some things we don't like.
So, we have a payment on a vehicle for the next two years or so. (maybe three, I don't recall.) And we can't afford another payment on anything, never mind a car payment.
So, I get stuck. I could take my old van for a trade in on a brand new vehicle, get $4500 off, and also a dealer cash-match, and still end up owing perhaps $10k, leaving me with a payment for several years. And, while I would love to take advantage of this, I would not be able to feed my kids.
I would be happy to trade my old van for something maybe 5 years old which easily gets at least 5 mpg more, which is one of the guidelines for the klunker upgrade. Should a used gcar dealer throw in a cash-match or rebate of any kind, I could be left owing less that $2k on a newer pick-up truck, or smaller van, which I actually need, since I both work in construction and own my own small home repair business on the side.
My point is, that when this CARS program was first thought of, why didn't they consider people like me? In my house, we strive to keep current on bills and payments, my wife goes to college in hopes of furthering her employment and a better sallary, I work a full time job (though hours have been cut to 32/wk), and I do side jobs. We can't afford to get a new car, no matter what the cash-match and government rebate is.
Perhaps if my 1994 e-150 with the troubled transmission and poor handling could hold out until we pay off my wifes mini-van, in another 2 years, and if it lasts at least untill it has 350k miles, and the government realizes that it forgot to help people like me, in my boat, and any program they might come up with permits me to get a used car that is less than (say) 7 years old, maybe I' could be a fan of a government hand out.
Until then, Mr. Obama and the other liberals have forgotten a group of people... We can't afford a new car payment because we try to avoid government hand outs, and we try not to live on credit that digs us deeper into the hole your handouts are going to push our kids into. We work hard for what little we have, and we work even harder to keep the things we worked so hard to get... Our bank accounts are empty and your CARS handout is a carrot dangled on the string of credit before our noses, leading us into the valley of the shadow of death. If we go after the CARS, we could forfeight our homes and our futures, and the only things we have. But, hey... they're just things, right?
The United States Congress has okayed a $787 billion stimulus package in an attempt to stop the economic slide and, hopefully, put the economy back on track. This package was approved along party lines, after much in-fighting, for the incumbent democratic administration. As in the past, there has been talk about bipartisanship, but evidence is definitely lacking. Less than 5 months ago, a similar package was approved, with similar intent, for the republican administration; to date, there has been no change in the economy. Are we headed there again?
The monies that were doled out had no effect on the economy. A lot of bad banks got money which was spent buying up the worst banks to make the bad banks worse. The mortgage crisis that everybody claimed, and still claims, is responsible for the economic collapse is no better off; if anything, it is worse off.
With the first stimulus/bailout monies, there were no dictates as to how the monies would be used, and today, billions of dollars are owed the government by the tax payers but the government claims that it does not know how the money was spent. Yet, it is common knowledge about how much the banks got and how much the automobile manufacturers in Detroit got. In both cases, it would appear that the government got it wrong. Why put the money in the hands of the very institutions that clearly demonstrated that they have no ability to manage money, structure or re-structure a business so it would operate in a profitable manner? The banks spent their money to benefit them and to do nothing for the economy. They are still in the same state as before getting the money. The Detroit boys wanted, and got, money to continue building cars that the consumer could not buy, because of the state of the economy. Both institutions are now asking for more money as they continue to lay off employees. What happened to the job creation?
With the present stimulus package, the current administration claims that the economy would benefit from the creation of jobs, by handing out money to be spent on projects like upgrading the nation’s infrastructure, energy, healthcare, education, etc. There is suppose to be a tax credit of $400.00 /yr or $13.00/wk for qualified individuals (twice that for qualified couples). There are other tax credits, like no alternative minimum tax (a break for the “wealthy”). President Obama is also expected to tackle the housing crisis by having mortgage holders decrease interest rates and possibly writing down some of the principle. There are, I understand, about eleven hundred pages of “to do list” in the stimulus bill.
Like the Republican Party, the Democratic Party appealed to a side of the American psyche that makes the size of this stimulus package appear necessary. They made compelling arguments to support its benefit. But hidden from view is a scary truth. Consider a construction company that is hired by a government agency to rebuild a bridge. That construction company must have employees, equipment, fuel to run the equipment, etc, etc as real time expenses. The construction company is not paid up front. Like most government contracts, payment in 60 days is a luxury. If, as in many cases, the construction company needs an advance in funds in order to hire more people (creation of jobs), upgrade and support the equipment etc. Where will the company get the money from? The banks are not lending money. You get the idea!
Will the economy respond, or will this be a mirror image of the previous attempt to halt the economic slide?
It appears to me that our government has been dealing with this crisis similar to a doctor who treats the symptoms, and ignores the etiology. No one has precisely diagnosed and document, definitively, the cause of the economic slump. If the disease is correctly diagnosed and treated, the symptoms will disappear. For example, the banks, with all of the money handed to them, are not making loans. They are not making loans because they cannot package and sell them as before. They cannot sell the loans because investors are not buying them, and the investors are not buying loans because the banks sold bad loans in the past. What will a tax credit do for a home buyer who cannot get a mortgage? How will a decrease in mortgage rates or write down of principle solve this problem?
Are we heading for more of the same?
It may see a bit less than capitolist. I have an answer to what will stimulate the economy.
In my house we have been pinching every last penny for many months. Still our bank shrinks, our Christmas Goose is going hungry.
When we recieved our stimulus check months ago, it went out just as fast as it came. Where did it go? Bills. It was spent long before it arived.
Our President Elect is talking about sending us more money. I don't know how much he wants to give each of us...I don't care. It will be spent on catching up on bills. None of it will be saved. Even if it came before Christmas it would not be found under the tree.
Without doing the math, my guess si that I would have to recieve about $20k in order to stimulate me.
Why?
Because the prices of everything have been jacked up so high that anything less is a crumb to a starving man.
If you want to see a real bail out, bring the prices of the everyday merchandise we need back to the prices they were when my Dad was a kid.
We pay $40 for a cheap pair of boots that will last 3 or 4 months while we go out and almost kill ourselves. We pay well over a hundred for a pair of boots that will last a year.
Blue jeans, work pants... socks... everything.
I recall when I first married 8 years ago, eggs were 59cents a dozen. Gas was about a buck and a quarter. Milk was $2.50 a gallon. My pay was $11/hr. Today, if I work for an employer, I get about $13/hr. How much is food?
I don't want minimum wage boosted up another cent. I want the prices of the things we need to go down.
Someone out there sets the prices. Either the petrolium people or the chemical people... Big bussiness people set the prices.
If they were really a family (oriented) company, don't you think going green would let me get more stuff for my green?
I am open to suggestions. How can we make the prices go down? That would stimulate the economy... Even poor folks could spend a little more.
Five days before Paulson struck his deal with the banks, British Prime Minister Gordon Brown negotiated a similar bailout — only he extracted meaningful guarantees for taxpayers: voting rights at the banks, seats on their boards, 12 percent in annual dividend payments to the government, a suspension of dividend payments to shareholders, restrictions on executive bonuses, and a legal requirement that the banks lend money to homeowners and small businesses.
In sharp contrast, this is what U.S. taxpayers received: no controlling interest, no voting rights, no seats on the bank boards and just five percent in dividend payouts to the government, while shareholders continue to collect billions in dividends every quarter. What's more, golden parachutes and bonuses already promised by the banks will still be paid out to executives — all before taxpayers are paid back. (And no legal requirement that the banks lend money to homeowners and small businesses.)
No wonder it took just one hour for Paulson to convince all nine CEOs to accept his offer — less than seven minutes per bank. Not even the firms' own lawyers could have drafted a sweeter deal.
from:
"The New Trough" by Naomi Klien
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