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Posted on 11/21/2008 6:50:50 PM PST by reprobate
November 21, 2008
The Truth About Bailouts
As the Federal bailout bonanza prepares to spread beyond the mortgage and financial sectors to fill Detroit's depleted coffers, few economic or policy analysts have spared a thought for the destitution of the U.S. government itself. Put simply, our government doesn't have enough spare cash to bailout a lemonade stand let alone a bloated and failing industry that is losing tens of billions of dollars per month. Washington can only offer funds that it has borrowed from abroad or printed. Unfortunately, the nation is in the grips of a delusion that money derived from these sources has the power to heal. But history has clearly shown that borrowed or printed money only has the power to destroy.
The argument that energizes the pro-Detroit camp is that the government should extend the same courtesy to the rank and file auto workers that it lavished upon the fat cats of Wall Street. While two wrongs certainly do not make a right, the fact remains that the Wall Street firms are still floundering despite the bailouts. What's worse, the money spent was either printed or borrowed from abroad. Both options are destructive to America.
When it comes to bailouts, the real discussions are not centered in Washington but rather in Beijing, Tokyo, and Riyadh. With no money of our own, our ability to bailout our own citizens is completely dependent on the world's willingness to foot the bill. While I am sure that Bush and Paulson are doing their best to convince the world that open ended financing of the United States is in the global interest, my guess is that, unlike Congress, our foreign creditors will see through the self-serving nature of our plea.
(Excerpt) Read more at europac.net ...
im a hardcore conservative just for the record. its not all the auto industry fault. the gov mandates put on these auto companies have crippled this industry. auto industry is at fault but if all the facts are known its the gov. fault as usual!
Do the Asian car companies have to comply with these government mandates you’re speaking of? If you’re talking about fuel efficiency mandates, it would seem to me that they would have to, wouldn’t they?
They do (have to comply) but perhaps because they are not yet contrained by unionization/huge pensions they have had more capital to do r and d on CAFE than GM etc.??
I was waiting for remaxagnt to say that :)
Peter Schiff (at link) was on FNC many times and predicted this and they all said he was crazy.
More fun than the alternative ...
The reality is, is that if foreign economies wish to continue to manufacture and export to the United States — where a great many consumers have a demand for foreign -made goods — then the foreign economies, through their ForEx banks, have little choice but to send capital our way...in essense, loaning us our dollars back through some type of purchase of U.S. assets. Recall, in Economics, Net Exports (NX) are equal to Net Capital Outflows (NCO) [so if NX is negative, as it is in a so-called trade deficit, NCO is negative, too.: that means it’s an inflow of capital]
Until the PROBLEMS are solved, the SYMPTOMS will continue!
(Of course, the problems are self-inflicted, and primarily arose from liberal ideology. Does this surprise anyone?)
The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money.
Alexis de Tocqueville
[This guy paints a very bleak picture for the US. I’m thinking about buying gold, productive farm-land and digging a bunker! ]
We have a short window of opportunity because we are in a deflationary period caused by the credit collapse (sucking out enoemous sums of cash). However, the next stage is when the printing presses catch up and we hyper inflate. Gotta be get ready to turn cash into physical assets before the hyperinflation takes hold.
It is a sad day for the world...
Perhaps this guy is right: Hal Turner (Google video)
Would appreciate your comments, this does puzzle me.
That is the conclusion I have been coming to. Unfortunatly I have little to convert. What I have is skills. That may be my only saving grace.
There have been mumblings and whispers about an Amerigo for a good while. There was a discussion about this within the last several years.
Interesting timing on this, too. Right before BO is inaugurated.
Any money sent to MI will be sucked into that socialist black hole known as Detroit, never to be seen again.
We are seeing welfare bums from across the nation moving to MI, while productive people are fleeing.
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Our politicians are crazy!
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