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Date Posted: 10:57:36 10/01/08 Wed
Author: Minnie
Subject: I agree with you...but
In reply to: Minnie 's message, "I guess hte best way to answer" on 13:34:32 09/30/08 Tue

The senerios go like this.

No bailout - more banks fail. CEO walk away (they do not have to pay if their bank fails) and no on can affond anything because money is too tight. The one true thing I know is that rich people will always find a way to stay rich (even when they lose thier jobs)

Bailout - We stop the total financial collapse that is coming and hope the economy recovers.

I realize that neither of these help you rightnow. But one will definitely hurt you in the end. Whatever your politics, we have to think about how to stop more from happening. If now is bad, doing nothing will make tomorrow worse!

Also Sorry about you position. None of this is meant directly to you. It must be erally hard to see that much money given away when nothing is coming to you directly.

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Replies:

[> [> [> [> [> But don't you think -- Terry, 16:37:15 10/01/08 Wed [1]

If they split that 700 billion among the population the economy would rebound on its own? Someone at work told me it works out to about 200K a person. Nice!

I know they're going to pass it and I know we'll end up picking up the tab. Just like the S&L bailout.

Rat bastards. Every last one of 'em.


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[> [> [> [> [> [> IA with you Terry, the very top people who got massive ... -- JennyJenkins, 21:07:56 10/01/08 Wed [1]

bonuses because of the sub-prime mortgage fraud schemes, have taken their money long time ago and parked it in some Swiss accounts and I bet they will not be charged with any fraud, and will be walking free and think up some other scheme in about four years or so...

Isn't it something that the biggest bank failures in our memory have happened under Republican presidents? Remember the loan companies under Reagan? That fiasco was bailed out by the Feds too. Just shows that complete de-regulation of the banking system is not good for the common people, but it practically prints money for the schemers.

Anyway, you asked about how it affects a small business, who still employ the largest number of Americans, since major industry has mostly gone to China or Mexico... :-/
Here's one scenario: a small renovator, or a plumber, might have a medium sized contract. All of the workers, and materials have to be paid for before the work is even started, then you have business expenses such as office, and machinery, including cars. So the contractor, has to have a line of credit from the bank to cover these costs. Once the jobs is done, the invoice is sent, the payment comes in 30 or even 60 days later. In the meantime, he has to exist, using the line of credit. If the business is good, and lots of contracts are in the pipeline, he might operate in the black, and doesn't have to use the line of credit, but sometimes there is a slowdown, like right now, then he has to use a line of credit just to run his office and pay his own bills, not to mention the workers that he didn't lay off. Right now, the credit is tight, and he can't get a line of credit, or if he gets one it has doubled in price. If he can't afford the new high interest rate, he is pretty well forced out of business.

Ideally, the bailout will give a governtment guarantee to the bank for those lines of credit, so that this small business man can get his original line of credit, and keep on the workers he has. If the people keep on working, because their places of employment will keep them too, then they will start the renovations, and his business will prosper again.

I'm sorry to read about your situation and that your husband has a hard time finding a new job. Hopefully, once this bail out goes through, this economy will perk up and people will start hiring again.

Anyway, that's how I understand how this bailout is supposed to work. I bet some schemers will figure out how to line their pockets with this money too, but there are supposed to be a lot of checks and balances, to protects the taxpayers this time.


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[> [> [> [> [> [> if only that would help... -- Minnie, 10:08:59 10/02/08 Thu [1]

I think it would be a bandaid and not fix the bigger picture. No credit. Without credit, companies can't buy stuff or hire people (hitting employment and causing small business and larger ones to fold). NPR had stories about this this AM. car dealership with 35% decrease in the month of Sept. Small businesses whos client no longer want to buy because they can get loans. In the end all this will cost average american a lot more than 200K.

As I understand it, the bail out is not to pay people, but to buy up bad debt in companies so that they can stay afloat, with the thought that at a future time the mortgages will be worth more and the gov. recoups the money


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