I am absolutely ecstatic that this so called bail out vote failed. This mess was directly created by the Federal government in the 1st place and now they're proposing to be the ones who are going to fix it? Again? There are a lot of elected officials that need to be thrown out of office and criminal charges instigated. You know darn well $700 billion is not the real figure that we the people will have to pay. Also, this plan was to be directly managed by the treasury secretary Mr. Paulson. Show me where in the Constitution that the Secretary of the Treasury is delineated such powers? I also really enjoyed the comment over the weekend by Senator Reid where he more or less said that he had heard from his constituents that they were opposed to this plan but that they were going to do what was good for the stock market!!! Excuse me but the people elected him and he's ignoring their wishes. Once again, I am extremely glad that this panicked cobbled together plan failed. Or as Dennis Miller says" it's just my thoughts, I could be wrong".

First question, wtf are you paying taxes in two countries for?

Second question, wtf are you calling $80k meager for?

On your cousin.  He need not be living beyond his means before he lost his job to be living beyond his means after he lost his job.  Life is not static, everything else on earth has to adapt to changes or die, people aren't the exception.  It's a harsh reality, but even if you're behaving in a completely responsible manner and get thrown a curve ball, it's still your fault when you go under while trying to hold onto everything you can no longer afford.

Either we get out and hate the government more, or we all go poor and a 2nd Great depression will occur and we hate the Government even more!

Do what?!

A) They were not complacent in their duties, the bulk of Government regulation over these companies ended with the GLB Act in the late 90s.

If the regulators that were over-watching the company were complacent, then how do you explain this:  (Note, the video is intended as a dig on Democrats, but it also shows how attempts at more regulation to deal with an identified problem was shot down)

http://www.youtube.com/watch?v=_MGT_cSi7Rs&eurl=http://noquarterusa.net/blog/2008/09/27/baracks-fannie-mae-buddies/

First question: Since I am a US Citizen I'm compelled to pay taxes in the US despite the fact I dont live there anymore.

Second question: compared to most of my clients I make a pittance. Then I have to pay unbelievable rent for my office and rabbit hutch called a home. You see since I'm not a "native" and not rich I can't get a mortgage from the local banks in this country and US banks are prohibited from lending to me. My 700+ credit rating means nothing in this county but I digress...

We will have to agree to disagree on the topic related to my cousin and his father as far as I'm concerned. Using your logic it is the same situation with these 100+ year old banks now going under.

Oh, that beautiful Chicago School theory, raising the tax rate lowers tax revenues and vice versa. Wouldn't it be a wonderful thing if there was some beautiful point where lower taxes meant higher revenue!

The problem is that it is historically untrue - by all means, track the capital gains tax versus the revenue from the capital gains tax, and it's pretty much a one to one ratio (accounting for GDP changes).

Presumably if the wealthy all got it together and said "We're not gonna invest till they lower capital gains!", it would work that way. The problem with that is simple - if 99% of the wealthy don't invest, that leaves 1% that do - and they *still* make more money from investing than not investing. So they get richer than the ones that don't invest, and the stubborn ones get poorer in relation.

So no, raising it has never lowered income historically. Sure, they *could* hold out, but they only have two ways of making money - investment, and *gasp* working for a living. They're still going to invest. And historically, they always have done exactly that.

Which places it in the 'another beautiful theory killed by a cold remorseless fact' range.

Jonnan

Incorrect.  What statistics did you see that said such?  Capital gains were cut by more than half from 86 to 87 in anticipation of a move from 20% back to 28%.  That wishful 26% hike in revenue turned into a massive loss as it dropped from over 400 billion to under 200.  People bail fast when they start trying to pass increase.   Revenue as a percentage of GDP is historically about double at 20% as well.

Also, only smart investors make more money investing.  Stupid ones lose their shirts.  When land prices weren't batshit insane, you could make 10% just buying up cattle farms and hiring a decent ranch manager to run them.

Spartan, you do take tax credits right?  Your income taxes in country x should be direct credits against your US taxes.  Also, you could renounce your citizenship.

Exactly!  Now you just need to realize it, the logical processes are all there inside your brain.  People do stupid shit, stupid shit has consequences.  Regardless of whether an individual bank is culpable in making the bad mortgages, they are still responsible for purchasing and continuing to hold mortgage securities when it is a known fact that better than a quarter of all mortgages are subprime, and the housing market is showing signs of instability.  They are paying the price of being stagnant, holding too many of their assets in single, risky sources, without the capital to back them when they go south.  As with nature, the market kills any business that can't adapt to it.

Umm... So how is it you are for the bailout and seem to be of the opinion that if the average guy gets screwed to damn bad - his fault for not planning properly for the end of the world regardless of likelihood, possibility or probability? I guess by your logic, you already have enough money and resources saved up to survive the next world war and beyond. It must be nice to be so wealthy.

Anyway, I like my citizenship thank you. I did not do nearly 10 years in the military for nothing.  [cheap plug] Rangers Lead the Way! [/cheap plug]

BTW: In fairness to Republicans, all those that voted against the bill earned some respect from me. Now I must go and hide my head knowing that the majority of Democrats voted for this crap. We need another viable damn political party. There seems to be no place for us die hard libertarians any more.

Long and the short of it is you're going to have to provide references on that Psychoak, because I don't see anything in the stats to bear that out, and it would be pretty a pretty big footprint if it were true.

The 1986 Tax reform dropped the top income tax from 50% to 28%, while removing the Capital Gains from being exempt to being taxable, and was designed to be revenue neutral (i.e., balance the two of them out so that the gain in the one would balance out the loss in the other), so, given that the top brackets have 90+percent of the wealth and a slightly lower percentage of taxes, you would expect to see a major drop in tax revenues.

The actual statistic don't show that: (Numbers in Billions)

Year                     GDP       Personal  As %      Income            Capital Gains

                                           Taxes  of GDP     Tax Rate              Tax Rate

1985                   4,180.7       437.7   10.469%   50%                    0% (Exempt)

1986                   4,422.2       459.9   10.399%   28%                    28%

1987                   4,692.3       514.2   10.958%   28%                    28%

1988                   5,049.6       532.2   10.539%   28%                    28%

During the entire period from 1985 to 1988, the entire difference was under 0.5% of GDP, or ~5% of tax revenues.

Now, with numbers that big, 5% of revenue is a pretty big number - but less than the net worth of a Bill Gates or Warren Buffet and *lot* less than you would expect if there was a major drop in capital gains investment. Other stats for the period (Unemployment, the prime rate, CPI et al) are just as consistent.

I don't have a closer breakdown of the tax rate figures to break down into capital Gains and Income tax revenues, so it's feasible a closer look could support your thesis - but a first look just doesn't support it as being a valid statistical model.

Jonnan

I have to disagree - the markets are in a freefall right now, and this isn't going to stay contained on Wall Street. The same liquidity problem that's hitting these big banks no one has sympathy for is cascading through the system.

Car companies need for this to be over fairly fast - because they need to arrange for their major loans to retool for next years models.

Farmers always need to borrow money to invest in seed, fertilizer, et al into the spring.

Companies need to borrow money to start up for the end of year production runs. The Thanksgiving weekend  -largest sales day of the year? Remember that? Hey - we're *there* Jack!

That's three incipient crises off the top of my head, and I'm sure there's more. - Sure, I would prefer a better solution than this, but the long and the short of it is we don't have the time for a perfect plan.

So, no, I don't respect the Republicans on this - they're supposed to be the party of business, and obviously none of them have enough familiarity with the business cycle to realize what the hell is waiting in the wings, they're busy being offended at a speech where Nancy Pelosi suggested that they might bear some responsibility?

No, they set the economy up for this mess, and they need to act like adults and get working on fixing it before the *real* catastrophes start coming.

Jonnan

I'm sure those houses are part of the credit problem as well. I don't think this problem is limited to the midwest.

133 Republicans voted against the bill, 93 Democrats voted against it. 65 Republicans voted for the bill, 140 Democrats voted for the bill. So you should've earned a lot of respect today.

Basically, the Republicans killed the bill. Bush's own party. Truth be known, they're pretty dissatisfied with him constantly making the government bigger and bigger, and now it's finally showing. Not to mention nobody wants to take the blame if the bill doesn't work.

I wish I had half that income. Perhaps it's time to move back to the USA.

i would just like to point out the etymology of "congress" before the US Constitution...

it was typically meant to have "sex"

"con", or with

"gress", to move (physically or mentally)

that is why we have words such as "regress", "progress", and "aggressive"

my only real hope is that the people who stood up arent "CONGRESSING" with us

But they claim to know us so well...

I have mixed feelings on its failure.

For one: The government could of made a lot of money down the line on the buyouts.  Keyword is buyout.  They where purchasing something with this money, not just giving out money.  That could of meant higher government income 5-10 years from now.  And for two:  It would of cushioned the economys recession.

But on the other hand:  The companys did this to themselves.  They deserve to burn and fail.(It just sucks they're taking down everyone else in the world with them.. it sucks that a few companys can do this.)  And government sucks at spending money, so they don't need to make more money 5-10 years from now, it's not like they'll be nice and lower my taxes, right?

I as a few others mentioned was shocked to see that congress didn't pass the bailout. In my opinion, it was a bailout, the only way they could make money on these is to buy them cheaper than the banks want to sell them (which wasn't going to happen, so the government would have lost money in the end).  I don't think that the bailout would have helped the credit markets anyway.  Hopefully, this thing doesnt get shoved down our throats the next go round.

It amazes me that the media has been pushing the "failure of leadership" and "congress messed up" lines.  I think it's one of the few things congress has done right recently.

Yep the "marketing" on the package - err.. uumm...  bailout is now being done via related perceptions and not on the topic itself. A classic public manipulation move. Present the voting down of the legislation as a failure in the media for a few days when in fact it was a victory for the voters opinion. Where are the "Congress listens to the voters!" headlines?

You're forgetting one of the basic hard questions from your civics class: do you want a representative in the legislature who does what you say regardless of the situation or one who does what his or her experience and knowledge indicates is the right thing to do?

Because our society is so large and complex, we cannot reasonably practice direct democracy. The best known compromise, representative democracy, shows a core weakness in situations like this. Very few people (including probably everyone posting in this thread) really understand what's going on well enough to decide what to do or not do. Our problem as citizens with representatives is not at all about making the best choice for the country. It's about deciding whose expertise to trust. Unfortunately, expertise does not come in tidy packages separate from things like party, class identity, and plain ol' personal ambition.

I'm taking a longish way around to echoing the recent calls for folks to just calm the frak down. We live in a faith-based economy laid down over what amounts to a crisis of over-production. We're not going to run out of food, housing, t-shirts, or cell phones (alas) unless we deliberately screw up production or distribution. We just need to reorganize the shell game to help reduce the chances of future surprises this scary. I suggest an extended series of public spankings for regulators who failed on their watches and executives who failed their customers and stockholders. Then, after we've all had a good laugh at the expense of the "villains," we can belly up to the bar and take our nasty medicine.

Either is better than the situation we have now, where they just do whatever their biggest donors say.

I appreciate the sentiment, but in this particular instance we have an exception proving a rule. That vote on Monday failed because enough members were actually scared of the backlash from their constituents. My own House member, Cliff Stearns, is a solid GOP establishment man. He voted No.

I bet his portfolio is bleeding, and he might well miss a few of his regular donors if not this cycle, then in 2010. But then some of those big-money lobbying types really don't look at much more than did you win strongly last time and are you on committees that can help me.

Sadly in this case it's just because the election is so close. You can't keep getting "donations" if you're not in office any more, after all.

First Spartan I agree with you I am glade that the bill died, And your right there should be more voices in politics than just the Rebs and Dims in fact well I personally am registered as a Republican only so I can vote in there primary. When asked my political persuasion I say Conservative because I hate all of the part line bull    

An example of this is my grandfather his a retired CA, Supremecourt Justas and is vary liberal and tows the party line. But on a personal level is much more moderate in his actions slash life style (I.E. S.U.V. are bad but he has a Doge 2500. Thou I must say he also has a Yarest.

To answer Jonnan I got my information from a C.P.A. also I did not mean that they would not invest and you are right there is little drop in investing when C.G. is raised.  But there is good drop in the amount of investments being sold

As to deregulation well there was a great deal of in the late nineties there was still platy to keep the company’s IF enforced. Here are some examples

Liar loans, If the average Joe know about them then the regulators had to know I.E. complacency or incompetents on the regulators part (and most defiantly greed on the lenders part )   

As well as when the lones were bundled to getter and sold as A grade bonds ( this will be the next round of defaults and more problems for the banks)  at this time I can not remember the agency that handled them. but what the did was use a statistical average saying that well this company say given us X amount of good lones so well inspect every 1 in X to make sure that they make the grade. And why did they not check every one like they had in the past? because the did not want to hold up the presses again complacent or incompetent

Finally, Fannie and Freddie lying about there profits to boost market share price   

I could go on but the fact of the mater is this has all happened before had will most likely happen again for some unknown reason  no one seams to care about learning from past lessons. We seam content to repeat them every ten years of so there is a boom bust. And every ten years every one says “What the hell happened”  I get sick and tired of it some commodity running way up and every one jumps on the band wagon trying to get rich quick and every time most of them get burnt because they don’t use common since. Need some examples??? Alright lets use the last thirty years as guide line 

The 80’s housing  bubble {Seam seam familiar ?

Stock market in the 90’s { Once more history repenting its self 

Enron and there “cooked books” { Fannie and Freddie did the same thing

This has only happened in the last THIRTY YEARS! Is there no hope for us learning for are past failures?? 

Sincerely, Stephen 

You are distinguishing, somehow, between investing, which I consider to be people buying investments, and "Amount of investments being sold", or people selling investments.

Typically, people buying is, by definition, equal to people selling. Unless you've been mugging brokers and stealing their mutual funds? - {G}

Jonnan

Spartan, I'm not for the bailout.  How the hell did you come to that conclusion?  I'm of the view that we're royally fucked if we keep repeating the same mistake, this isn't the first time we've done this.  The last time we spent a fraction of this and all it did was create more bad mortgages, which have only held up this long because the perpetual housing bubble meant defaulters still let the banks at least break even.  That is of course until I'm with Stupid got into office and pushed through NINJA loans, which not even a bubble can offset.

Jonnan.

Link!

Also, an explanation for the above.  Buying is equal to selling, which is the problem.  The higher short term capital gains rates mean less capital gains are realized.  Even if there is no effect on the market, you have no capital gain when your stock values double.  Your gain is when you sell them, and there is irrefutable proof that substantial numbers of people drop investments before impending upticks, and wait for downticks before selling.  If you want to see a massive increase in capital gains revenue this year, announce an increase for next years taxes before the fiscal year ends.  This shows it so nicely.

Thanks for the link - I'm going to have to print it off and read it through, but I see several assumptions that feel off to me, so I need to verify or debunk my own intuitions before responding - it may be a next week thing.

But, just looking at the authors, the problem with reports like these is they're written by people that already agree with each other, particularly in congress and especially in the House - Jim Saxton seems to be a pretty moderate Republican, Gwartney is a member of the James Madison Institute (seems to be a low key libertarian think tank, funding by the Cato institute, among others), and Randall Holcombe is another Libertarian scholar.

Now, I doubt any of the three is crazy, but what we have here is a moderate Republican and two libertarian scholars that fundamentally agree on the interpretation of data, and nobody to go "Bob, when I say you're an idiot, please realize I mean that in the best possible way." - not exactly subject to peer review.

Jonnan

Your assesment of the situation is correct.

All the cleverly laid out justifications and threatening people with unemployment aside:

Try this at your bank: Ask them if they can lend you money so you can get interest. And actually you are not going to lend it and have no intention of giving it back. You will get a good laugh, i promise you that.

Is it just me or seems it a bit strange the employees paying for employment?

And exactly that is what is happening. The 700 000 000 000 $ have to be payed by somebody. The government? Sure, they will take it from the national treasury. And who fills that treasury? Taxes. And who is paying the taxes?

A government budged is limited, if there are 700 billion $ missing suddenly this has to be compensated. Can you imagine how this will happen?

"Ey, we discoverd we overlooked a hole in our budged."

"Ey, alright, its a pretty BIG hole actually. We made some miscalculations."

How can you be short by such a mindblowing amount of cash and act surprised?

In France people would go on a general, nationwide strike, simply ignoring goverment demands until the situation blows over. What good does employment if you have to PAY it? You should EARN.

This is no unfortunate accident. This is corruption. Remember it in the elections. Look closely who is taking what side. Thats the only advice i can give you. Technically the only right place for the responsible people and their political puppets is jail.