Seems like that is where America is headed now. Today's estimates are that Fannie/Freddie will require $200 billion in bailouts. Detroit automakers want another $50 billion in bailouts. I have previously summarized hundreds of billions in bailouts via the Federal Reserve, Federal Home Loan Banks, etc. And if history is a guide, the estimates are going to be way too low, and the actual bailouts will be much higher. After all, if $50 billion to Detroit doesn't work, the gubmint is in too deep to not give them more if they need it. Same thing with Fannie/Freddie. I guess equally important is the fact that once the gubmint starts bailing, it must keep bailing regardless of the cost, because if it stops, it would be tantamount to an admission that maybe it wasn't a great idea in the first place, and of course, a "waste" of all that money already spent on the bailout.
Those printing presses much be humming 24 hours a day printing new money for all of these "gifts" from Washington.
Paul
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How about the bailouts of your own industry: Aviation.
Whose bread I eat, his song I sing.
Sorry - That's not directed at Paul, but rather Average Buyer.
I should read the tagline closer.
My point remains...
I think BT and I tend to be from opposite sides of the political spectrum, but amazing seem to agree on most fiscal issues. I suspect, but do not know, that BT would agree that the anticipated clamor from the airline industry for bailouts, is no less acceptable than for any other mis-managed industry. If Southwest, with its low priced fare structure, can continue to make profits ($321m profit from operations in the most recent quarter) with +$100 oil, there is no reason for me to believe that the other airlines couldn't do the same. I only left it out of the post because frankly, I can't keep up with all the folks marching off to Washington with their hands out. Maybe this is the true "moral hazard" of the housing bailout? Now, EVERYONE thinks they should be entitled to a handout too.
Maybe this is the true "moral hazard" of the housing bailout? Now, EVERYONE thinks they should be entitled to a handout too.
Well America has a strong heritage of bailouts, but yea, it's a slippery slope. At some point America's credit will run out so bailouts are not the way to go.
Paul is right, I am not a fan of the government picking winners and losers.
Slightly off topic, but up for congresional vote this year is the FAA reauthorization which gets at the FAA & air traffic funding. The commercial airlines do pay way more than their "fair share" of taxes into system compared to the general and business aviation communities (effectively subsidizing these groups use of the system). I liken it to greyhound paying more to use the same roads as the limo service.
Changing this tax/fee structure would alleviate some delay, and reduce the financial pressures on the commerical airlines (but unfortunatly not enough to make up for the recent increase in fuel prices).
The bailouts don't really bother me as long as they come from Congress where they get a fair debate. It's the deficit spending that bothers me.
This is what bothers me: fatcats walking away with multiple millions/billions and those of us without any power or pull in Washington being told that from us down to our grandkids, we're going to pay the bill. Don't the financial geniuses call that "privatize the profits, socialize the losses"?
See, "socialist" isn't a bad word when you apply it to the financiers.
My grandkid informs me she had to listen to her dad and a male friend discussing how we need to invade more oil-rich countries and step-up that drilling offshore, because it's our God-given right as Americans to drive big vehicles. Seriously.
As others have pointed out, if people were still able to get those liar loans and NINJA loans, they'd be doing it. It's their God-given right to have their every selfish whim fulfilled, after all.
This country, I hardly recognize it any longer. We are in dire need of strong medicine.
Privatizing profits and socializing losses is not socialism. It's the conservative nanny state or corporatism, but it's not socialism.
"being told that from us down to our grandkids, we're going to pay the bill."
This is the deficit part that I have a big problem with. As long as we pay as we go it is all just a form of wealth distribution real-time.
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