Bush wants to spend $700,000,000,000 of our tax dollars

http://news.yahoo.com/s/ap/bush_markets

WASHINGTON - President Bush said Wednesday that lawmakers risk a cascade of wiped-out retirement savings, rising home foreclosures, lost jobs and closed businesses if they fail to act on a massive financial rescue plan. "Our entire economy is in danger," he said.

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"Without immediate action by Congress, American could slip into a financial panic and a distressing scenario would unfold," Bush said in a 12-minute prime-time address delivered from the White House East Room that he hoped would help rescue his tough-sell bailout package. "Ultimately, our country could experience a long and painful recession."

Said Bush: "We must not let this happen."

The unprecedented $700 billion bailout, which the Bush administration asked Congress last weekend to approve before it adjourns, is meeting with deep skepticism, especially from conservatives in Bush's own Republican Party who are revolting at the high price tag and massive private-sector intervention by government. Though there is general agreement that something must be done to address the spiraling economic problems, Bush has been forced to accept changes almost daily, based on demands from the right and left.

Seeking to explain himself to conservatives, Bush stressed he was reluctant to put taxpayer money on the line to help businesses that had made bad decisions and that the rescue is not aimed at saving individual companies. He tried to address some of the major complaints from Democrats by promising that CEOs of failed companies won't be rewarded, while warning he would draw the line at regulations he determined would hamper economic growth.

"With the situation becoming more precarious by the day, I faced a choice: to step in with dramatic government action or to stand back and allow the irresponsible actions by some to undermine the financial security of all," Bush said.

The president turned himself into an economics professor for much of the address, tracing the origins of the problem back a decade.

But while generally acknowledging risky and poorly thought-out financial decisions at many levels of society, Bush never assigned blame to any specific entity, such as his administration, the quasi-independent mortgage giants Fannie Mae and Freddie Mac or the Wall Street firms that built rising profits on increasingly speculative mortgage-backed securities. Instead, he spoke in terms of investment banks that "found themselves saddled with" the toxic assets the government is now proposing to buy and banks that "found themselves" with questionable balance sheets.

Intensive, personal lobbying of lawmakers is not usually Bush's style as president, unlike some predecessors. He does not often make calls or twist arms on behalf of a legislative priority.

But with the nation facing the biggest financial meltdown in decades, Bush took the unusual step of asking Democrat Barack Obama and Republican John McCain, one of whom will inherit the financial mess in four months, and key congressional leaders of both parties to a White House meeting on Thursday to work on a compromise.

Obama spokesman Bill Burton said the senator would attend the meeting scheduled for the afternoon, and senior McCain advisers said he would, too. The plans of the other invitees were unknown. The White House said that the idea for the joint meeting was McCain's and that aides went about setting it up after Bush and McCain spoke Wednesday afternoon.

In another move welcome at the White House, Obama and McCain issued a joint statement using their own dire language to urge lawmakers to act. The two candidates — bitterly fighting each other for the White House but coming together over this issue — said the situation offers a chance for politicians to prove Washington's worth.

"The plan that has been submitted to Congress by the Bush administration is flawed, but the effort to protect the American economy must not fail," they said. "This is a time to rise above politics for the good of the country. We cannot risk an economic catastrophe."

However, the Oval Office rivals were not putting politics aside entirely. McCain asked Obama to agree to delay their first debate, scheduled for Friday, while Obama said it should go ahead.

White House and administration officials have warned repeatedly in recent days of a coming "financial calamity."

But that has not closed the deal, which for many recalls previous warnings of grave threats from Bush — such as before the Iraq war — that did not materialize. So Bush's goal with his speech, his first prime-time address in 377 days, was to frame the debate in layman's terms to show the depths of the crisis, explain how it affects the people's daily lives and inspire the public to demand action from Washington.

He said that more banks could fail, the stock market could plummet and erase retirement accounts, businesses could find it hard to get credit and be forced to close, wiping out jobs for millions of Americans.

He ended on a positive note, predicting lawmakers would "rise to the occasion" and that the nation's economy will overcome "a moment of great challenge."

With so many crises hitting the United States at once, the presidential race has taken a back seat and so has Bush's involvement in politics. Bush canceled a campaign trip to Florida on Wednesday to deal with the problem, the third time in a week that he has scrapped his attendance at out-of-town fundraisers, either because of the market turmoil or Hurricane Ike.

The economic crisis also is almost certain to overshadow the rest of Bush's four months left in office and could hugely impact his legacy. It has been assumed that the long-term view of Bush's presidency was to be shaped largely by Iraq, Hurricane Katrina and the Sept. 11, 2001, attacks. Now, the dire economic problems and the aftermath of the government's attempted solution will certainly be added to that list.



Thoughts?

Onimi 15 years ago
Im scared for our country.. seriously
Darsa 15 years ago
idea

I'm having a hard time with this one, predominantly because I really feel I'm ignorant in the area of big business banking and finances. I guess the thought foremost in my mind is "Holy shit, that's a big number!"

And on top of that, the idea that taxpayers are expected to foot the bill for this scares the bejeepers out of me. I also have sympathy for whichever of the two has the fallout from this land in his lap come January.

The way it looks to me, given the limited amount of knowledge I have in regards to this type of thing, is that the government is enabling these large companies in their foolish financial decisions; just the way everything seems to be nowadays; noone takes responsibility for their own actions, there's always someone else to blame and someone else to pick up the mess that's left. I guess I should appreciate that, it gives me job security, with all of these people that call looking for a lawyer to sue the bar that they stumbled out of blind-drunk and tripped and hurt their lil' knee... and such.

Lessa 15 years ago
what theyre trying to do is make it so the problem doesnt get worse.. right now most of the banks cant pay for the loans people have already taken out, much less fund more.. for instance say you want to go out and start a business.. you cant.. I know cause my hubby is doing it now.. he cant get the loan he would need from a bank to purchase the property he wants..( no matter how cheap it is) the banks cant afford it, they dont even have the money to pay what they owe already.

If it goes on and stocks continue to fall, and properties continue to not sell, and businesses continue to fail itll spiral down to where we are out of work, or the stores and restraunts we go to are out of business and things we normally buy are so much more expesive.. the way things are going something has to be done.

However, I hope that whatever they do , they do it in a way that the companies theyre bailing out do have some sort of price to pay, that theyre not just going to be rescued and set back on their feet to go and do it again.. that theyre forced to reimburse their debts or something.. of course, that will transfer back to us too, just hopefully to a lesser extent.
ROzbeans 15 years ago
I'm excited to see what kind of 'Golden Parachutes' the CEOs of these companies get. Because when my 8 month old son is footing that 3k tax hit along with the rest of us, they'll be walking away with multi million dollar retirement packages.
ROzbeans 15 years ago
On the Today show they're saying that this plan will right the housing market by next June. Apparently running at 10k foreclosures A DAY, the house market has not bottomed out yet. This is why Mike and I chose to walk away from buying a house and move on base. Any house we look at will continue to lose value. The rate of foreclosures in this area is horrible and the value of homes drop by almost double digits monthly. Then you have people who aren't in foreclosure (yet) that are trying to sell their homes for more than what they're worth. Which is what happened to us after our first house sale fell through.

Something needs to be done, but the financial community needs to be held accountable, as well as people who were not smart enough to realize that interest only mortgages were not a bright idea. The fault is on both sides - the buyer and the lending institution and it's fucking the rest of us.

/huffs
Mylec 15 years ago
Sorry, I don't believe in socialism. I believe in democracy and free markets. I didn't tell clueless people to get into outrageous real estate deals they couldn't afford (and should have known better). As for the banks, they made the loans. Business is supposed to be a risk, there are not supposed to be guarantees. Let them all go bust. The market would straighten itself out eventually.
Den 15 years ago
Mylec;101042
Sorry, I don't believe in socialism. I believe in democracy and free markets. I didn't tell clueless people to get into outrageous real estate deals they couldn't afford (and should have known better). As for the banks, they made the loans. Business is supposed to be a risk, there are not supposed to be guarantees. Let them all go bust. The market would straighten itself out eventually.


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Verity 15 years ago
I'm not going to say I know a whole lot about this whole situation... but I do gotta say that I totally agree with you guys. 700 BILLION dollars could go a LONG way to do some serious good in this country. Found this article on MSNBC, 7 better uses for 700 billion dollars (or something like that)

Rather than making us taxpayers foot the bill, I honestly think the CEO's of said companies that are going under ought to foot the bill. they can then live like the rest of us humble blokes for a while & see what it's like.
Lessa 15 years ago
buh bye WaMu

they deserve it though just for having such a stupid abbreviation.. and putting it on their buildings..
Darsa 15 years ago
That was a surprise... probably just to me tho, since I don't really watch TV much and only recently started seeing commercials, LOL. I had assumed WaMu (I roll my eyes every time) was doing well, given their commercials. Oh well, everythings going to hell in a handbasket nowadays...
Temprah 15 years ago
If the "bailout" of business is handled similar to the way they structured the mortgage one that recently passed it is not too bad. The government does have a profit for themselves factored into these loans they are taking over to keep people from foreclosure (by marking up a certain % over what they pay the original lien holder, which is only a portion of what is owed.. forcing the lender to take a loss but one that is less than the cost of a foreclosure's processing considering and subsequent resale risk considering the decline of home values)

I think no matter what... to stabilize the country, the dollar's value abroad and to preserve the general quality of life in the USA (and in other countries too since the collapse of our economy would create a domino affect across the globe) the government MUST act. Swiftly. Cost be damned... in retrospect that will seem like a small price tag if we don't snf then we're in a massive Great depression all over again, with millions unemployed and prices of even basic necessities skyrocketing because of our foreign dependance and the weak dollar.
Lessa 15 years ago
This is the thing thats going to vote monday.

http://www.msnbc.msn.com/id/26884523


Under the plan, the government would purchase mortgage-backed securities and other bad debts held by banks and other investors. The money should help troubled lenders make new loans and keep credit lines open. The government would later try to sell the discounted loan packages at the best possible price.
At the insistence of House Republicans, some money would be devoted to a program that would encourage holders of distressed mortgage-backed securities to keep them and buy government insurance to cover defaults.
The legislation would place “reasonable” limits on severance packages for executives of companies that benefit from the rescue plan, said a senior administration official who was authorized to speak only on background.
It also calls for the financial sector to help make up the difference if the government does not recoup its investment in five years, the official said, but details remained unclear. The government would receive stock warrants in return for the bailout relief, giving taxpayers a chance to share in financial companies’ future profits.
To help struggling homeowners, the plan would require the government to try renegotiating the bad mortgages it acquires with the aim of lowering borrowers’ monthly payments so they can keep their homes.
Verity 15 years ago
Hrm.. Looks like they're at least *trying* to look out for the little guy.....

I do want to know what *reasonable* is in regards to severance packages for executives from the bailed out companies?
Call me a bitch, but I wanna see them suffer a bit.
Den 15 years ago
Looks like the bill was defeated in the House. Not sure if I'm relieved, or worried.
I think my whole issue is trust...and the lack of it
Darsa 15 years ago
You're echoing my thoughts, Den. Talk about an epic fail! I'll be watching closely to see what happens next.
Verileah 15 years ago
I'm frustrated by the all or nothing attitude I'm seeing in Congress. All these fearmongers talking about 'omg we must do something because something is better than nothing so yes let's spend 2734820572340557032$!!!one111!!'. Give me a break. Your constituents are telling you that this plan is unacceptable - that != do nothing. Renegotiate the plan, figure out something that -is- acceptable, and vote on it with as little partisan bullshit as you can manage NANCY. -God-, do your fucking job.
Darsa 15 years ago
This article interested me, and I even agreed with it somewhat, once I was able to wade through all of the use of technical terms that I'm too dumb to be able to understand:

http://www.time.com/time/business/article/0,8599,1845209,00.html?cnn=yes

Verity 15 years ago
Verileah, I agree with you completely!


The title basically echoes my feelings on this entire thing
Darsa;101096
This article interested me, and I even agreed with it somewhat, once I was able to wade through all of the use of technical terms that I'm too dumb to be able to understand:

http://www.time.com/time/business/article/0,8599,1845209,00.html?cnn=yes




EDIT: Wow... this quote... just wow.... as though those banks/ financial institutions (and ultimately their CEO's) need MORE of our money. (bold emphasis mine)
Follow the money. Average Joes and Janes are not the holders of the other side of complicated, over-the-counter derivatives contracts. Rather, hedge funds are the main holders. The bailout will involve a transfer of wealth — from the American people to financial institutions engaging in reckless speculation — that will be the greatest in history.
Temprah 15 years ago
Problem is Verity if we do that.. our nation's economy is going to crumble. getting a loan even with stellar credit will be extremely difficult if not impossible simply because these banks won't have any money to do it with! Housing and spending is what was responsible for the huge surge the last few years. If no one can sell a home because of the fact that no one can get a mortgage, that is bad. If people (like myself) stuck in very high interest rate ARMs can't refinance or sell (as I had planned to do before the arm kicked in but the market tanked) there is going to be a massive flood of foreclosures. Hell, there already IS. It's going to be only getting worse.. not better. Congress has to act and it has to be BIG. It has to shore up these businesses, provide capital to the banks and get the money moving again. Right now none of the large banks are wanting to loan each other money because they don't know who will fold next and don't want to risk it. That means NO ONE has capital to fund loans and it's going to get ugly..

Let me say I don't think it is the large corporations and the greedy executives who have run them to this point who will suffer. It will be the working class citizens who are hurt by rapidly rising costs (including everything from food, imported goods, utilities etc etc) as well as all the medium & small businesses who fold because they can not get loans for things like expansion, repairs, loans against their receivables to make payroll or pay their own bills. Everyone seems to have this oh let the big companies fail and suffer the consequences. What about every person's retirement accounts and investments that are losing value rapidly? Someone close to retiring could have seen a HUGE chunk of their funds wiped away in 1 day with yesterday's massive decline. The overseas markets are in chaos in response to all this mess, with Britain and several other countries being hit hard as a result.

The United States is in trouble. Not simply just these companies.
ROzbeans 15 years ago
Going to crumble? It already has crumbled. Although I'm still on the fence with what to do, however I am in agreement with the screaming guy on MSNBC who said they should lower the interest rate to 4% for everyone - looking to buy or buying home owners. But I still think everyone is to blame for the whole thing. Lenders giving everyone a fucking loan. Everyone TAKING said fucking loan. And both sides, who should have known better, fucking themselves into a credit hole.

Makes couples like Mike and I look at our finances and forgo buying a house. We paid off our Jeep and are in the process of paying off our debt to just 4k total in about a month. We'll be debt free by taxes next year. So thank you to the rest of the nation for fucking themselves retarded, it made those of us reevaluate our lifestyles and live on cash only. We haven't used credit in over a year.

/lights a candle
/kisses the ground
/watches the capitalist pigs die! Ooh, wait a minute...