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Post by Carlton the Barbarian on Oct 1, 2008 7:14:02 GMT -8
Btw, thanks for posting the Krugman article. It's becoming harder and harder to find spare NYT's on the train. Anyway, it would be fun to see Krugman and Bill O'Rielly go at it regarding this bail-out (rescue) bill . Interestingly, Krugman, who O'Reilly calls a socialist, doesn't support the bill, and O'Reilly, who is called a conservative, supports the bill.
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Post by Carlton the Barbarian on Oct 1, 2008 7:17:32 GMT -8
Did anyone else see that the bailout bill, as many as a few days ago, had $140 billion of the $700 billion designated to go to ACORN! (and similar groups). I told you that Democrats made revisions to Bush's initial proposal. ;D So, I check out your link, and it takes me to a fast food place. I don't eat lunch, so I don't want to see raining images of fries and hot dogs. I'also haven't heard about the Sonic thing.
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Post by muckle dabuckle on Oct 1, 2008 7:24:42 GMT -8
Okay, I'm no expert on this (obviously) but this is starting to get funny. Now the house republicans are pissed that the senate plans on skipping town immediately after the vote today (if it happens today) so there can't be a conference committee on the bill to iron out differences and the democrats are pissed at the senate because they are fighting over the Constitution:
"Article I, Section 7: All bills for raising revenue shall originate in the House of Representatives."
Now the house and senate will be fighting over the wording of this apparently. The House is the only body allowed to originate bills to raise taxes and they also claim this means they are the only ones that can originate bills that spend this money too. The Senate claims they can originate bills that spend money, but agree they can't actually originate bills that raise taxes (if I understand all this correctly).
To me it seems the house democrats are in the right on this. This bailout bill is obviously raising tax dollars to spend (or where else would the money come from). For an apparent "crisis" I do find it hilarious that both bodies haven't stayed in town the last two weeks (the house took off after the failed vote for a holiday and the senate plans on doing the same thing after their vote).
P.S. How is this post above the one I posted below when I posted this second?
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Post by muckle dabuckle on Oct 1, 2008 9:21:32 GMT -8
I told you that Democrats made revisions to Bush's initial proposal. ;D I don't think anyone thought anything different would happen. That is why I want to know the authors of the bill. Obviously one of them was responsible for the ACORN thingy. You have to go to their newsroom right on that site (it's under the "strictly business" section to the left of store locator on the top of the screen). It's the top news item there. It's a PDF so I didn't want to link to it directly. Of course I can't find it on any newsites (even though Sonic's press release was in direct response to media reports), but of course the press can't bother with facts right now they are too busy having "experts" tell us how many ways we are all going die (I think the press should work with Midway to design the fatality moves in the next Mortal Kombat game!). And I still can't find the authors of the bailout bill (the one that failed). Does anyone know? Also, I don't understand how the congress has something like a 13% approval rating (the president's even lower) but were all of a sudden supposed to trust them on this one. And watch how most of the incumbents win by 60-70% this november even though their approval rating is 13%. Pollster: "Do you approve of the job Congress is doing?" Public: "Hell no!!!!" Pollster: "Do you approve of the job your congressman is doing?" Public: "Hell yes!!! Wonderful job!!!!!!" That's one thing I'll never understand.
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Post by Jockolantern on Oct 1, 2008 15:13:54 GMT -8
...O'Reilly, who calls himself a conservative... O'Reilly has never once referred to himself as a conservative and he certainly isn't one. He's a barely right-leaning moderate. Somewhere between John McCain and Lindsey Graham, with a little Zell Miller thrown in. -Jockolantern
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Post by christopher on Oct 1, 2008 15:44:35 GMT -8
But he's on Fox! And Stephen Colbert calls him Papa Bear!
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MikeP
Orchestrator
Posts: 537
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Post by MikeP on Oct 1, 2008 17:59:55 GMT -8
O'Reilly. Olbermann. Two sides of the same coin.
Senate bill passed... tomorrow will be an interesting day.
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Post by christopher on Oct 2, 2008 7:44:26 GMT -8
Maybe some of you that are in-the-know can tell me where the money for this bailout is coming from? Mike, you talk about money being printed. Certainly the government wouldn't just print all that money? As you said, that would REALLY hurt the dollar. I don't think even the US government acts that irresponsibly. Why do people keep talking about how this relies on the tax payers? Does that mean that this bill will be funded by taxpayers? Will it be funded by government securities like the bailouts for Frannie and Freddie? If this bill is funded by tax payers then why does it now include a provision that will lower taxes??
"The tax provisions of the Senate bill - the bulk of which come from the addition of tax breaks from other legislation - may reduce federal tax revenue by $110 billion over 10 years, according to estimates from the Joint Committee on Taxation. More than half of that is due to the 1-year extension of AMT relief." (CNN)
But then this line: "Overall, the CBO said, 'the bill as a whole would increase the budget deficit over the next decade.'" (same CNN article) suggests that this is tax payer based, but that since we're cutting taxes it will just lead to a much greater deficit.
What are the long term impacts of decifit spending? We have a huge decifit now, but what do we suffer for it? Surely, there must be some problem with living on money we don't have...
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Post by muckle dabuckle on Oct 2, 2008 9:25:15 GMT -8
It's essential that the house either guts this bill or doesn't pass it. This is a crisis! If it wasn't passed the day before yesterday I would've died a horrible Mortal Kombat fatality! Look at the government save my job: SEC. 211. TRANSPORTATION FRINGE BENEFIT TO BICYCLE COMMUTERS. Post the BS you find in this "bill" (or novel).
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MikeP
Orchestrator
Posts: 537
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Post by MikeP on Oct 2, 2008 11:22:39 GMT -8
Warning - long post alert! First, realize that the Federal Reserve Bank is a separate entity from the government. That's right... our government's money is not actually controlled by the govt, but rather private bankers. Don't worry if it seems utterly retarded to you... it is. Maybe some of you that are in-the-know can tell me where the money for this bailout is coming from? Mike, you talk about money being printed. Certainly the government wouldn't just print all that money? As you said, that would REALLY hurt the dollar. I don't think even the US government acts that irresponsibly. Why do people keep talking about how this relies on the tax payers? Does that mean that this bill will be funded by taxpayers? Will it be funded by government securities like the bailouts for Frannie and Freddie? Ok. Here is my understanding of it. This bill promises that the government will pay the Fed $250 billion dollars, with an extra $100 billion given with approval of the President (which is a sure thing as Bush, McCain, and Obama are all supporting this bill). After $350 billion is spent, Congress will have to approve the final $350 billion. The Fed, however, will not wait for payment from the govt. Once this bill is approved, the Fed will take action and 'print' another $250 billion dollars. This doesn't mean a literal printing (although I'm sure there will be some of that), but numbers in electronic bank accounts will increase by $250 billion. The govt will pay the money back to the Fed later, almost certainly with compounded interest. In other words, the Fed will loan our government $250 billion dollars, and money from taxpayers will slowly pay the Fed back. Companies and investors love this, as they will be selling their failing and worthless mortgage securities for much more solvent taxpayer backed government dollars. The end result is that $250 billion dollars is going to flood the market very quickly. Do you see why this will cause inflation and the weakening of a single U.S. dollar worldwide? As for the technicalities of how that all works - government issuing bonds and whatnot... that's above my knowledge right now. It's a cynical attempt to win over more Republicans. You know, because Republicans loooooove tax cuts for big corporations. It's a bribe, and I'm hoping it's transparent enough to be ineffective. The bill isn't strong enough to pass on its own merits, so between this, the FDIC increase, and the Senate vote, they are trying to pass it on via devious means. This goes beyond my scope of knowledge by a healthy margin. The biggest risk I'm aware of is that other countries may start doubting our ability to pay our debt, and quit lending us money.
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MikeP
Orchestrator
Posts: 537
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Post by MikeP on Oct 2, 2008 14:28:50 GMT -8
Ha! I just realized this whole thing with the Senate proves that even our government isn't above peer pressure. "C'mon House! Everyone's voting for this Bill! Do it!"
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Post by Hook on Oct 2, 2008 14:41:33 GMT -8
SEC. 211. TRANSPORTATION FRINGE BENEFIT TO BICYCLE COMMUTERS. Post the BS you find in this "bill" (or novel). TITLE III—EXTENSION OF BUSINESS TAX PROVISIONSSec. 317. Seven-year cost recovery period for motorsports racing track facility. edit: upon further study, stuff like this is either not actually part of the bill or makes sense in that way in which a solution to a need that doesn't make sense makes sense. If that makes sense.
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Post by natedogg23 on Oct 2, 2008 15:00:41 GMT -8
Mike hit on most of the points and I will just follow up with a few things.
As Mike already stated, it is pretty key to know that the FEDERAL RESERVE deals with the US money and it is NOT a FEDERAL instituition nor does it actually have RESERVEs. Pretty clever name then, eh?
The US uses a fiat currency, thus it is not backed by anything of value (no longer a gold standard) other than the 'full faith and credit of the US government' (basically they tell that the paper money has value even though you couldn't actually exchange it for anything of value like gold). So, since it isn't backed by anything there is nothing limiting the amount of money that can be printed.
Now, the FED prints the money as well as just electronically creates it. The way I understand it (and I am still learning about a lot of this stuff too) is that the government sells T Bills (bonds) to the FED which results in the FED allocating created money to the government. The Federal Reserve is the government's bank plus the banker's bank, thus why it is called the central bank. The government uses the money then to buy up all these illiquid investments (which are not liquid for a reason, but the government wants everyone to feel all warm and fuzzy that they make actually be able to make money on this deal. Ummm, someone is making money on this deal, but somehow I don't think it will be the 'taxpayer' that is going to benefit).
And as Mike said the $250 billion dollars then makes its way out into the banking system as new available funds. But it doesn't end there......this new money that is placed in the banks now can be used to lend out more money thus alleviating the credit crunch. But the money isn't just lent out once and it ends there, portions of it are lent out several more times. Let us introduce fractional reserve banking now......banks are only required to keep a certain amount of cash on hand to deal with transactions (if you go in and withdraw money, clearing checks, etc). So, this is why a 'run on a bank' is very bad, because the bank will not have enough money on hand to fulfill all their obligations. However, this plays a key part in money creation as well because it basically allows banks to 'create' money. For example, if someone deposits $100 in the bank and the reserve requirement was 10% the bank can then lend out $90 to someone which creates $90 that wasn't there before. And this can keep going......So the cumulative effect is much more than just the $250 billion or however much is eventually pumped into the system.
As I stated before and was disregarded by someone who hasn't come back to comment. Taxes are used as a political tool. Doesn't make a whole lot of sense that the taxpayers are on the hook for this if the bill has tax cuts in it; however, the taxpayers are affected by loss of buying power rather than having to pay higher taxes to fund the bailout. It is a ploy to appeal to a broader range of congressman in hopes that it will get the bill passed. Hopefully this political manipulation will be seen for what it really is and those that voted 'no' before in the house stand firm against the bill.
I am in the same boat as Mike in that I don't fully understand all the ramifications of deficit spending in the long run, but as he stated other countries could begin to question the US ability to pay these deficits or the US creates so much money that the money is no longer desirable. Now the US government is in major debt to many countries around the world, which then just creates more issues.......
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Post by muckle dabuckle on Oct 2, 2008 20:34:27 GMT -8
TITLE III—EXTENSION OF BUSINESS TAX PROVISIONSSec. 317. Seven-year cost recovery period for motorsports racing track facility. Ha ha ha. I've heard about that one! How about these: www.nypost.com/seven/10022008/news/nationalnews/piggy_pols_in_hog_heaven_with_pork_packe_131770.htmTax breaks for: * Manufacturers of kids' wooden arrows - $6 million. * Puerto Rican and Virgin Island rum producers - $192 million. * Wool research. LOL! I've also heard there is a thing in the bill about shellfish research! Yes, we do have a "crisis" here but it's not what you think.
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Post by Jens Dietrich on Oct 3, 2008 5:11:17 GMT -8
...and if you really look into the fiat currency system that we use here in the US there really is no need for taxes at all cause the US can basically just create money. Well if you are going to make that statement towards me it would be nice if you expanded upon your comment so I can gain a better understanding of your comments. Jens, still waiting for a follow up comment to your previous comment based on a statement I made...... Just because we're no longer on the gold standard doesn't mean we can just print as much money as we want to. A fiat-money currency only retains its value as long as the government acting as creditor can guarantee its value through taxation. So yes, there really IS a need for taxes and the U.S. government CAN'T basically just create money. This following clip expands upon my comments a little bit more, and should help you gain a better understanding of my comments:
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