The real cost of the bailouts-$12.8 trillion+

fullmetalfan720

fullmetalfan720

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Well, folks the bailouts don't really cost $850 billion, or a couple trillion. No, they really may cost $12.8 trillion plus. If you look at this Bloomberg article, from March 31st, the U.S. government has pledged $12.8 trillion to bail companies out.
http://www.bloomberg.com/apps/news?pid=20601087&sid=armOzfkwtCA4&refer=worldwide
Now, on Feb. 9th, the total was 9.7 trillion.
http://www.bloomberg.com/apps/news?pid=washingtonstory&sid=aGq2B3XeGKok
In under 2 months, we have spent 3.1 trillion to bail out large companies. Those numbers haven't been updated since March 31st. If you add another 6.2 trillion, since its been about 100 days since March 31st, and 3.1 trillion is added about every 50 days, you get $19 trillion dollars. That is more than our GDP. We have pledged over our entire economic activity for one year to bail out companies, while the regular person gets nothing. Also, what will this do to your money? Well, Bloomberg says this about the 12.8 trillion
The money works out to $42,105 for every man, woman and child in the U.S. and 14 times the $899.8 billion of currency in circulation.
Click to expand...
14 times the currency in circulation. That ought to be some great inflation. Plus, you and everyone else in the country has to pay back $42,105, as of March 31st. Just think what that number is right now. Then, what has these bailouts done to help America? Nothing.
 
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I usually stay out of the political realm but it's so silly to see something like this happening. The bailouts were such a bad idea in theory but hopefully there's a miracle and the execution pans out. So much money is being thrown away it's ridiculous. Using the country as collateral for predatory institutions and poorly run businesses is such a bad idea and this should have been exactly what Obama was AGAINST. Every company maximized their profits beyond ethics and practicality during their favorable times with total disregard for how it would affect the future. So what does the government think is the best solution? Give the people who are going to make the same bad decisions money from the people they're fucking.
 
pledged or spent? i don't know if you know, but I know: they're not the same thing. by using the terms interchangeably, you're suggesting the government has pledged $13T over the infinite horizon as well as spent $3.1T above and beyond the federal budget in 2 months' time.

The first is probably a substantial overstatement, and the second, I hope for your own sake, is simply a misstatement when using the term "spent."

By the way, GM emerged from bankruptcy this week. Yeah, fuck those non-working government funds.
 
[quote name='mykevermin']pledged or spent? i don't know if you know, but I know: they're not the same thing. by using the terms interchangeably, you're suggesting the government has pledged $13T over the infinite horizon as well as spent $3.1T above and beyond the federal budget in 2 months' time. [/quote]
As of March 31st they have spent ~4.2 trillion. They have pledged ~13 trillion total to go to certain places. A large portion of this money goes to the Federal Reserve. As you can see in this video:
http://www.youtube.com/watch?v=cJqM2tFOxLQ
their "overseer" has no clue where the money went. Also, the Fed is not tracking the money. You might as well consider the money lost.

The first is probably a substantial overstatement, and the second, I hope for your own sake, is simply a misstatement when using the term "spent."

By the way, GM emerged from bankruptcy this week. Yeah, fuck those non-working government funds.
Click to expand...

My problem with the bailouts is that its socialism for the rich, and capitalism for the poor. If I'm the President of Goldman Sachs, and I run my company into the ground, I get a government handout. If I am a regular person, and run my small business into the ground, I get nothing. Bailouts just reward stupid actions. If you make stupid mistakes, you should have to deal with them. Also, who gets most of the bailouts? The finance giants that gave heavily to certain people's political campaigns.
 
Right. So you *do* believe that this money is *spent* and not *pledged.*

Let me ask you a followup, then, for full clarity on what you understand about the stimulus package: Do you believe that the federal budget deficit for 2009 will be $12.8 Trillion?
 
[quote name='mykevermin']Let me ask you a followup, then, for full clarity on what you understand about the stimulus package: Do you believe that the federal budget deficit for 2009 will be $12.8 Trillion?[/QUOTE]


Give Obama some more time... ;)
 
[quote name='mykevermin']Right. So you *do* believe that this money is *spent* and not *pledged.*

Let me ask you a followup, then, for full clarity on what you understand about the stimulus package: Do you believe that the federal budget deficit for 2009 will be $12.8 Trillion?[/QUOTE]
I didn't say that. The government told the Fed, you can use ~8 trillion, you can use it for x, and y. Now the government owes the Fed money when they use it. According to that video, no one knows what the Fed did with the money. They basically gave away or lost ~8 trillion that we will have to pay back. Of the other 4.7 trillion, about 2.1 trillion has been spent so far, and the rest will be spent, in the near future.
Many of the programs the money has been allocated for have not used the money yet, but they will. Then we will have to pay it back.
................................Allowed Spent (in billions)
Line of Credit for FDIC* $500.00 $0.00
Student Loan Purchases $60.00 $0.00
TARP ..........................$700.00 $599.50
Support for Fannie/Freddie $400.00 $200.00
Public-Private Investment* $500.00 0.00
Citigroup Bailout FDIC $10.00 $0.00
FDIC Liquidity Guarantees $1,400.00 $316.50
Bank of America Bailout FDIC $2.50 $0.00
 
You're telling me the government misspent/misplaced/somehow used - as deficit spending - 12.8 Trillion dollars since Obama took office?
 
[quote name='mykevermin']By the way, GM emerged from bankruptcy this week. Yeah, fuck those non-working government funds.[/QUOTE]

The thing I don't get is, uh, why couldn't GM go through banruptcy under a court, without, you know, a ton of wasted government money like a normal company?
 
[quote name='Liquid 2']The thing I don't get is, uh, why couldn't GM go through banruptcy under a court, without, you know, a ton of wasted government money like a normal company?[/QUOTE]


Because you couldn't make backdoor "deals" with a shit-ton of government cash, screw creditors by disregarding debt hierarchy, and give a payoff to the UAW if you had to play by actual bankruptcy rules.
 
Even if they've only spent $3.1 trillion this year, that's a whole lot of money, even for Government to spend in 6 months.
 
[quote name='bmulligan']Because you couldn't make backdoor "deals" with a shit-ton of government cash, screw creditors by disregarding debt hierarchy, and give a payoff to the UAW if you had to play by actual bankruptcy rules.[/QUOTE]

Beat me to it.
 
[quote name='mykevermin']You're telling me the government misspent/misplaced/somehow used - as deficit spending - 12.8 Trillion dollars since Obama took office?[/QUOTE]

Myke - thanks for bringing clarity here. There is no need to exaggerate, FMF720, in this regard. What has been done is bad enough (it could scarcely be worse) that there's no need to spin it whatsoever. Just state the amount spent (it's trillions, after all) and the amount the government is on the hook for in case everything goes wrong (it won't, but we'll be on the hook for at least some of it, if not most, guaranteed).

People need to step back and look at the scale of what has been done. It's hard to even comprehend how large the amounts we're talking about are. People don't understand how much a trillion dollars is. Let me try to give you some perspective.

Since the downturn started, maybe 6 or 7 million people have lost their jobs. Let's take 7 million. That's a lot of people to lose their jobs, right? Well, let's take a look at what $1 trillion (just 1, not 4 or 19) could do for these people if we were to use it for them instead of rewarding ginormous corporations and their incompetent (and sometimes criminal) CEOs for spectacular failure.

$1 trillion / 7 million people = $142,857.14 per person. So just $1 trillion of that spent and we could give each person who lost their job more than $140,000.

But let's do some more math. The "stimulus" bill passed earlier this year cost us taxpayers $787 billion. The first "stimulus" bill, which was completely ineffective (just like the second one!), was passed by Pelosi/Reid and signed by Bush last year, and that was for $168 billion. So if we total those up, we have two "stimulus" bills, with more or less no results, that cost $955 billion.

There are around 300 million legal residents of the United States. What if we had given all that money back to people, even those who didn't pay taxes such as low-income folks or children? $955 billion / 300 million people = $3,183.33 per person. Remember, this is what's already been either spent or going to be spent, not including bailouts, and not including things like porking up the regular budget.

The real question is, what have we gotten for this massive spending spree that will make our children indentured servants to China for the foreseeable future? Oh dear, a bunch of $3,000 signs extolling the stimulus spending? Oh dear, oh dear:

http://abcnews.go.com/Politics/story?id=8026587&page=1
 
[quote name='bmulligan']Because you couldn't make backdoor "deals" with a shit-ton of government cash, screw creditors by disregarding debt hierarchy, and give a payoff to the UAW if you had to play by actual bankruptcy rules.[/QUOTE]
Exactly what I was looking for. :cool:

I was hoping myke would reply though, since he seems to be all about the bail outs.
 
^ Based on GM's claims, it's not a matter of traditional bankruptcy protection versus 'bailout.' It was 'bailout' or 'cease to exist.'

Now you may prefer the latter over the former, and that's fine. But don't operate under the mistaken assumption that GM would exist if they received no stimulus funding.
 
[quote name='mykevermin']^ Based on GM's claims, it's not a matter of traditional bankruptcy protection versus 'bailout.' It was 'bailout' or 'cease to exist.'

Now you may prefer the latter over the former, and that's fine. But don't operate under the mistaken assumption that GM would exist if they received no stimulus funding.[/QUOTE]

GM may have ceased to exist, but several new startups would have sprung out of its "corpse" that could compete in today's market of lower demand.

Even better, the market for electric cars may have appeared with one of those three dinosaurs dying off.
 
^Uh... Government.

Meh... it's not 13 tril then I don't care...

[quote name='fatherofcaitlyn']GM may have ceased to exist, but several new startups would have sprung out of its "corpse" that could compete in today's market of lower demand.

Even better, the market for electric cars may have appeared with one of those three dinosaurs dying off.[/QUOTE]

Doubtful unless the government finds some way so they have the same amount of control with electric (or whatever alt source we use) like they have with oil...
 
[quote name='mykevermin']^ Based on GM's claims, it's not a matter of traditional bankruptcy protection versus 'bailout.' It was 'bailout' or 'cease to exist.'

Now you may prefer the latter over the former, and that's fine. But don't operate under the mistaken assumption that GM would exist if they received no stimulus funding.[/QUOTE]

Okay, but what is wrong with a failing company no longer existing?

Like foc said, start ups would have sprung from the corpse. Instead, we just have more of the same clodding companies that failed for a reason and are here to drag ass for a little while longer.

GM's continued existence (assuming that it would have completely ceased to exist under normal conditions) is that much of a block on new blood in the system because they've already proven themselves to be failures; if they had been sold off in pieces as a result of their bankruptcy, more agile thinkers would have the opportunity to put those assets to use, instead of GM continuing to use them terribly.
 
Let's stay on topic.

Did the stimulus help GM? Well, they're still around.

As my second sentence in the post you quoted points out, I'm not interested in discussing whether or not you *think* GM should have been given stimulus funding - not here, anyway. I'm pointing out that GM had two options - cease to exist or take government funding. They took the latter route and emerged from bankruptcy protection this week. In so doing, they've shown, contrary to many of your claims, that the stimulus funding did indeed work - at least in this one instance.

That's what I thought we were discussing here - the *effectiveness* of stimulus funds. Not whether or not a company you wanted to see get it got it. Let's focus on what's going on in the world that we can see, not what we can boil down to "philosophy" or "opinion."

I'm still uncertain why you all think a competitor would arise from GM's ashes. Why then and not now? Give me a reason, because that's an argument many of you claim, but don't realize that such as argument is by no means as self-evident as you think it is.
 
Because their assets would have gone to people who could put them to better use and because it would open the market up to more competition by knocking out a massive player in it.
 
[quote name='mykevermin'] They took the latter route and emerged from bankruptcy protection this week. In so doing, they've shown, contrary to many of your claims, that the stimulus funding did indeed work - at least in this one instance.

[/QUOTE]



GM emerging from bankruptcy this week is a promising, but it will take years to realize whether or not the bailout of GM was successful. it remains to be seen whether or not they can turn the ship around and start profitting and becoming a sustainable business or whether or not they will flounder for a few years with their heads above water or continue to post losses quarter after quarter.
 
[quote name='RAMSTORIA']GM emerging from bankruptcy this week is a promising, but it will take years to realize whether or not the bailout of GM was successful. it remains to be seen whether or not they can turn the ship around and start profitting and becoming a sustainable business or whether or not they will flounder for a few years with their heads above water or continue to post losses quarter after quarter.[/QUOTE]

The short term effects of the stimulus have proven successful in this avenue - whether or not it translates to long-term effects (the greater goal, after all) is as of yet unproven.

This is an effort that has helped sustain a company who would not have been assisted by tax cuts alone.

[quote name='Liquid 2']Because their assets would have gone to people who could put them to better use and because it would open the market up to more competition by knocking out a massive player in it.[/QUOTE]

So a company is both on the brink of extinction and yet simultaneously a "major player" in the market? I don't believe that, at least in the sense that it would "open up competition." Competition is not a finite resource, though sales numbers are.
 
It is a lot easier to convince investors to give you start up money if there is some gap to fill. A gap that would have been created with the loss of GM (or insert any failed company). Competition is limited by available cash and rationed using risk.

It is not known whether something fruitful would have come of it or just a spoonful of lost US jobs but it is hard to believe no one would be there to grasp at such an opportunity - especially with GM being sold off in pieces.

The only dangerous thing is if this new competitor does not offer US jobs - which may have been some of the fear driving the bailout?

I dunno this is all speculation on a random video game forum. But it 's fun!
 
[quote name='mykevermin']So a company is both on the brink of extinction and yet simultaneously a "major player" in the market? I don't believe that, at least in the sense that it would "open up competition." Competition is not a finite resource, though sales numbers are.[/QUOTE]

A big company doesn't need to be doing well to be a big company with a significant share of the market that still outperforms smaller rivals with it's name/brand.

And like ToadallyAwesome said, competition is limited by investment (which is increased by available niches) and risk. I could say that I want to start a company to write an operating system to compete with Windows, but I wouldn't get shit in terms of financing because the consumer OS market is completely saturated and because the odds of me succeeding in creating a viable product that people would buy over Windows is nil. No niche and high risk = no financing, which means it's that much harder for a newcomer to compete in that part of the market.
 
[quote name='mykevermin']I'm still uncertain why you all think a competitor would arise from GM's ashes. Why then and not now? Give me a reason, because that's an argument many of you claim, but don't realize that such as argument is by no means as self-evident as you think it is.[/QUOTE]

If GM ceased to exist, the government would have bring in a new partner to be in bed with.

Instead giving the hooker (GM) a shot of adrenaline and keeping her in the orgy of big business and government, kick the bitch and let somebody else in on the fun.

...

Did the stimulus help in short term? Sure, much in the same way that running up credit cards helps maintain a lifestyle instead of dealing with consequences.

Long term? Well, that's my grandchildren's problem.
 
[quote name='mykevermin']"spoonful of lost US jobs"?

right.[/QUOTE]


I was hoping for a comment from this guy. I heard there was a CAG achievement/trophy for this.
 
Oh, I'm sorry - did you have a real question?

Or were you overlooking the substantial growth of Korean import autos in the United States relative to the decline in domestic sales in order to maintain some incorrectly-concluded idea that there's no room for competition in the United States? We can't compete against the great corporate monolith that is GM, unless we're Kia, or Daewoo, or Hyundai - like those are three fuckin' legacy auto companies in the US.
 
It's pretty cool how you're kind of a condescending dick when all I did was ask for a response. If you didn't want to answer, just say so and lose the arguement.

And did you overlook that those companies were already established in their own countries before deciding to try their hand at the American market?
Name one viable American car company that's started up in the past few decades.
 
[quote name='mykevermin']Oh, I'm sorry - did you have a real question?

Or were you overlooking the substantial growth of Korean import autos in the United States relative to the decline in domestic sales in order to maintain some incorrectly-concluded idea that there's no room for competition in the United States? We can't compete against the great corporate monolith that is GM, unless we're Kia, or Daewoo, or Hyundai - like those are three fuckin' legacy auto companies in the US.[/QUOTE]

Damn near everything abhors a vacuum. If GM just disappeared, it would produce a hole for several million cars to fill. With a little creative tariffing, a car powered with alternative energy could have filled that hole.
 
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