RC-Monster Forums - View Single Post - $700,000,000,000 Best case scenario (and it sucks)

Finnster · 09.30.2008, 05:13 PM

IDK what to make of the bailout.

On one hand the credit market is freezing up, and short term lending is the grease that moves the economy. As mad as everyone is, it will be even worse when businesses can't make loans for payroll, day to day operations or expansion. Worse off is when they start to layoff people to cut expenses, and people can't get loans (or have money) to buy cars, houses, consumer products, etc, and the feeding businesses contract. I know GM is on the ropes.

OTOH, $700B is a $hitload of money, going to an admin that has been rarely correct on anything or its cost, and no one really seems to understand these "assets" and their real value (else the banks wouldn't be here in the 1st place.) More worrisome tho is that its in part based on an idea of propping up the overinflated housing market that never should have grown that large. The bailout could spark huge inflation which will also make everything a giant mess.

What I do know is there doesn't seem to be any good options, and there are no clear answers to any of this. No one in power is doing a good job of explaining the real implications of the impending mess for non-financial types (ie most voters) nor the full implications and +/- of the few options presented to date. Hold on to your ass kiddies, we're in for a ride.

	(#1)
Finnster KillaHurtz Offline Posts: 2,958 Join Date: Apr 2006 Location: Bucks Co, PA	09.30.2008, 05:13 PM IDK what to make of the bailout. On one hand the credit market is freezing up, and short term lending is the grease that moves the economy. As mad as everyone is, it will be even worse when businesses can't make loans for payroll, day to day operations or expansion. Worse off is when they start to layoff people to cut expenses, and people can't get loans (or have money) to buy cars, houses, consumer products, etc, and the feeding businesses contract. I know GM is on the ropes. OTOH, $700B is a $hitload of money, going to an admin that has been rarely correct on anything or its cost, and no one really seems to understand these "assets" and their real value (else the banks wouldn't be here in the 1st place.) More worrisome tho is that its in part based on an idea of propping up the overinflated housing market that never should have grown that large. The bailout could spark huge inflation which will also make everything a giant mess. What I do know is there doesn't seem to be any good options, and there are no clear answers to any of this. No one in power is doing a good job of explaining the real implications of the impending mess for non-financial types (ie most voters) nor the full implications and +/- of the few options presented to date. Hold on to your ass kiddies, we're in for a ride.