I Agree with the Tea Party!

[kellyb]

I'm sorry, but you've only shown a single article from Rolling Stone Magazine (which I will admit is a fairly reputable source), but nothing in there substantiates the claim of secret bailouts that the taxpayers are on the hook for.

If you consider rejection of homeopathy and the gold standard (i.e. a recognition of the way the current economy works/what it's based on/how returning to the gold standard would **** the world economy in the long run) a threat to national security, I have no option but to assume your world is not as grounded in reality as you might think.


ETA: You do realize the bailout money is being paid back to the Fed, right?

I said returning to the gold standard is woo. I think/know homeopathy is woo. I was very clear about that.

Nobody knows how the secret trillions in secret bailout money will pan out. That's kind of the problem.

But if at the end of the day, you think US taxpayers AREN'T the final responsible party, you're living on Mars. I envy your blind, ignorant faith in the financial sector.

 

[lomiller]

Get your facts straight -- it's not even the largest item in the budget. The term "lion's share" means "all or nearly all" and Defense is only about 20% of the budget.

Your link is a little outdated.

in 2010 defense spending was $960 billion of the $1300 billion in the discretionary budget. I you want to count veteran affairs and homeland security you could add another $100 billion to that.

Yes, mandatory spending is larger still but that is even less likely to be touched because it would take actively repealing medicare, medicaid etc.

 

[kellyb]

ETETA: Here's the wiki link that discusses the TARP and payback. Quite a few reputable sources, including the CBO, indicating that the actual cost of the bailout is far less than was initially estimated. Those were loans, for the most part, not grants. And for the most part, they're being paid back (to a loss of a mere 25B or so, rather than approx 700T). So, yes, there's some money coming out of the taxpayer's pocket. Is it less than the damage that would have been caused by letting the market crash? Youbetcha. ( http://en.wikipedia.org/wiki/Troubled_Asset_Relief_Program )

Do you not see that the $300 billion TARP is small potatoes compared to the $2+ TRILLION secret bailouts?

 

[BobTheDonkey]

Do you not see that the $300 billion TARP is small potatoes compared to the $2+ TRILLION secret bailouts?

You haven't shown evidence of these trillion dollar secret bailouts, Kelly.

What bailouts are we talking about, specifically? Wait, let me guess, we don't know because they're secret... What part of the budget did they get hidden in?

 

[KoihimeNakamura]

Alert detected:

You do know the Fed is audited yearly, right?

As such, your link fails a basic knowledge check.

 

[kellyb]

You haven't shown evidence of these trillion dollar secret bailouts, Kelly.

What bailouts are we talking about, specifically? Wait, let me guess, we don't know because they're secret... What part of the budget did they get hidden in?

Let me get this straight first.
You don't believe the Fed handed out $2 tril in bailout money unbeknownst to the public and congress, according to the Paul/Sanders audit?

Like, you think that's maybe/probably an urban legend or something?

 

[Corsair 115]

In spite of the fact that a lot of what Paul believes in is woo (gold standard, homeopathy)...

A few years ago he was also espousing belief in the North American Union/NAFTA superhighway conspiracy theories. Though perhaps he has toned down his comments on those particular items more recently...

 

[kellyb]

Alert detected:

You do know the Fed is audited yearly, right?

As such, your link fails a basic knowledge check.

Then why did the two trillion in secret bailouts not come out till the Fed was audited by Sanders/Paul? Those bailouts happened two years before the audit.

 

[BobTheDonkey]

Let me get this straight first.
You don't believe the Fed handed out $2 tril in bailout money unbeknownst to the public and congress, according to the Paul/Sanders audit?

Like, you think that's maybe/probably an urban legend or something?

I already answered this question, Kelly. I'm looking for the results of this audit, and so far, haven't been able to find it on the GAO website, nor even any record of the audit other than that it passed both Houses of Congress early last year.

Do you have a link to the actual audit results?

 

[kellyb]

A few years ago he was also espousing belief in the North American Union/NAFTA superhighway conspiracy theories. Though perhaps he has toned down his comments on those particular items more recently...

Yeah, I didn't know about that, but the dude really is a woo. I'm just desperate enough to accept a woo over corruption at this point.
Which is sad.

 

[KoihimeNakamura]

Then why did the two trillion in secret bailouts not come out till the Fed was audited by Sanders/Paul? Those bailouts happened two years before the audit.

Because, all things being equal, they lied.

 

[Puppycow]

http://www.rollingstone.com/politics/news/wall-streets-war-20100526



What you, Bob, call a "grounding in reality", I and many, many others see as a threat to national security in terms of potential insolvency and a threat to our democracy.

And rational, intelligent, skeptical folks from both the left and the right are more than eager to leave the fools from both political persuasions behind as we band together to fight this disaster in the making.

I don't have much time right now to get too far into this, but I don't think that laypeople understand what the Fed does well enough to effectively tell it what to do. There's a good reason why the Fed was insulated from politics in the first place.

I believe that the emergency loans made by the Fed during the financial crisis were necessary to save the economy from a disaster. I'm sure they are unpopular, but that's because most laypeople don't have the faintest clue what would have happened to the economy if the Fed hadn't taken action.

Are you seriously asking for evidence that US taxpayers have to pay (eventually) for debt the US treasury is responsible for?

You think the US treasury is responsible for the emergency loans made by the Fed? See, with all due respect, this is why I don't believe that you really know what you are talking about.

 

[kellyb]

I already answered this question, Kelly. I'm looking for the results of this audit, and so far, haven't been able to find it on the GAO website, nor even any record of the audit other than that it passed both Houses of Congress early last year.

Do you have a link to the actual audit results?

I don't think they're online.
Is Bloomberg reputable enough for you to accept that it happened?

http://www.bloomberg.com/news/2011-...e-ducks-request-for-details-on-fed-loans.html

Vermont Senator Bernard Sanders, whose legislative provision forced the Federal Reserve to disclose last month the recipients of $3.3 trillion in financial-crisis aid, said Chairman Ben S. Bernanke ducked his request for more details about the loans.

 

[KoihimeNakamura]

Well, that's evidence. Of a sort.

 

[BobTheDonkey]

I don't think they're online.
Is Bloomberg reputable enough for you to accept that it happened?

http://www.bloomberg.com/news/2011-...e-ducks-request-for-details-on-fed-loans.html

I actually just found some info on this...interestingly, here's what I found in a Washington Post article:

Dallas Federal Reserve President Richard Fisher defended the Fed's actions during the financial crisis, saying the central bank "stepped into the breach" in its role as a lender of last resort.


"That's what we are paid to do," he said. "We took an enormous amount of risk with the people's money," he acknowledged. But the crisis lending programs are now all closed, he said, "and we didn't lose a dime, and in fact we made money on every one of them."

( http://www.washingtonpost.com/wp-dy...01/AR2010120106870_2.html?sid=ST2010120106876 ).

So, while I'll agree that there was a large amount of loans done behind closed doors, I can't agree with your assessment that the American Taxpayer is on the hook for those bailouts...

 

[kellyb]

I don't have much time right now to get too far into this, but I don't think that laypeople understand what the Fed does well enough to effectively tell it what to do. There's a good reason why the Fed was insulated from politics in the first place.

The Fed is NOT insulated from politics, tho. Greenspan, a former member of Ayn Rand's cult, was the chairman for years. And he destroyed the US economy under his rule based on his neoliberal woo.

I believe that the emergency loans made by the Fed during the financial crisis were necessary to save the economy from a disaster. I'm sure they are unpopular, but that's because most laypeople don't have the faintest clue what would have happened to the economy if the Fed hadn't taken action.

And economists like Dean Baker said at the time and still say those bailouts weren't necessary, and we could have dealt with it like we dealt with the S&L crisis in the 1980's.

You think the US treasury is responsible for the emergency loans made by the Fed? See, with all due respect, this is why I don't believe that you really know what you are talking about.

The Fed buys Treasury debt. This is sold on the bond market. Should the bond market deem the the debt insolvent, it will ultimately fall back upon the Treasury, and probably manifest in terms of austerity for "the people", no?

I appreciate the respect you give and admit to an incomplete understanding of how it all works.
If you want to school me and teach me about how it all actually works...if my present understanding is in error... then I'm sorry for being incorrect and I'm more than willing to learn something new.

 

[kellyb]

I actually just found some info on this...interestingly, here's what I found in a Washington Post article:

( http://www.washingtonpost.com/wp-dy...01/AR2010120106870_2.html?sid=ST2010120106876 ).

So, while I'll agree that there was a large amount of loans done behind closed doors, I can't agree with your assessment that the American Taxpayer is on the hook for those bailouts...

Who would be on the hook if not the American taxpayers?
I'm glad the Texas situation seems to have panned out ok, though.

 

[Puppycow]

Here's a couple articles on the emergency loans made by the Fed:

Fed made $9 trillion in emergency overnight loans

December 1, 2010: 6:05 PM ET


NEW YORK (CNNMoney.com) -- The Federal Reserve made $9 trillion in overnight loans to major banks and Wall Street firms during the financial crisis, according to newly revealed data released Wednesday.

The loans were made through a special loan program set up by the Fed in the wake of the Bear Stearns collapse in March 2008 to keep the nation's bond markets trading normally.

The amount of cash being pumped out to the financial giants was not previously disclosed. All the loans were backed by collateral and all were paid back with a very low interest rate to the Fed -- an annual rate of between 0.5% to 3.5%.

Fed Emergency Borrowers Ranged From GE to McDonald’s

Warren Buffett explains why it was necessary for the government to take action:
Pretty Good for Government Work

Look, I hate Wall Street as much as the next guy, but as greedy and corrupt as they may be, their failure would have serious negative consequences for all of us.

 

[Puppycow]

The Fed is NOT insulated from politics, tho. Greenspan, a former member of Ayn Rand's cult, was the chairman for years. And he destroyed the US economy under his rule based on his neoliberal woo.

"Destroyed" is a bit of an overstatement. The economy took a major hit, but it is starting to recover. It's always much easier to see what went wrong in hindsight. There's no guarantee that somebody else's policies would have worked much better. Some policies may have been worse. Greenspan has admitted that he made mistakes.

And economists like Dean Baker said at the time and still say those bailouts weren't necessary, and we could have dealt with it like we dealt with the S&L crisis in the 1980's.

I respect Dean Baker, but I think he's in the minority of economists on this. I'd be interested to read his argument though.

The Fed buys Treasury debt. This is sold on the bond market. Should the bond market deem the the debt insolvent, it will ultimately fall back upon the Treasury, and probably manifest in terms of austerity for "the people", no?

I appreciate the respect you give and admit to an incomplete understanding of how it all works.
If you want to school me and teach me about how it all actually works...if my present understanding is in error... then I'm sorry for being incorrect and I'm more than willing to learn something new.

It's good that you know you have an incomplete understanding of how it all works. So do I, and even the top economists have an incomplete understanding. I don't presume to be able to "school you" but I'll explain my own understanding of how it works in general.

The Fed can basically create money out of thin air. They don't have to get it from the taxpayers, so the taxpayers aren't "on the hook" for it or anything. The Fed does buy treasury debt sometimes, but this doesn't really affect taxpayers either. If anything, this helps taxpayers because the Fed just returns any profits it makes from doing this to the treasury. Money that the treasury gets from the Fed is money that it doesn't have to get from taxpayers.

There's more, but I'll have to leave it at that for the moment, as real life is calling me.

 

[Emperor_Gestahl]

Each side of the political spectrum tends to fail the most at the things it's actually right about. For instance the left is correct that we need universal, socialized health care and has completely failed to bring it about. Same with the tea party and their small government fantasies, put them in power and they will fail at it like Bush did.