Borrow. Spend. Panic. Repeat.
The Naked Emperor Hank Paulson is at it again. How to dig ourselves out of our borrow-spend-panic binge?
Why, of course: Encourage more borrowing, spending and panicking!
The U.S. Treasury and Federal Reserve will unveil as soon as today a lending program to shore up the consumer-finance market, using money from the government’s $700 billion rescue, two people familiar with the effort said.
The Treasury and the Fed will help fund new loans packaged into securities for sale to investors, the people said. Treasury Secretary Henry Paulson, who scheduled a press conference for 10 a.m. New York time, said two weeks ago that he wants to spur lending for automobile purchases and college education while also reducing the cost of credit-card debt.
Paulson and Fed Chairman Ben S. Bernanke are widening the scope of their rescue efforts after agreeing two days ago to guarantee $306 billion of Citigroup Inc.’s toxic assets. Paulson has spent most of the first half of the government’s Troubled Asset Relief Program aiding Wall Street banks, and pressure is growing in Congress to help average Americans.
“Paulson needs to be seen taking a leadership position,” said Axel Merk, president of Merk Investments LLC in Palo Alto, California. “The markets are desperately looking for guidance on the way forward.”
Blind leading the blind.
***
Barbara Mikulski approves. Flashback: Dumb idea of the day: Hey, let’s encourage a nation in debt to borrow and buy even more!
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Trackbacks
- Radio Vice Online » Dumb idea of the week
- Is America Headed to Collapse? | BipolarNation.com
- PoliBlog (TM): A Rough Draft of my Thoughts » A Summation of the Bush Admin’s Financial Crisis Policy
- Sowell Puts Economy in Perspective « The Right Knight
- Obama Future Press Conference 25 December 2011 | BigMouthFrog
- The College Politico » Blog Archive » Paulson to Lend Money to Anybody Who Wants it
- WO’s Daily Roundup | Without Objection
- Fausta’s Blog » Blog Archive » Venezuela’s Opposition Scores Key Victories, the bailouts, and friends’ roundup
- Another Day Another Bailout Plan | Surviving Socialism
- Taxpayer Smelling Salts | America Needs Me
- Taxpayer Smelling Salts | America Needs Me
- Mo’ money, mo’ money, mo’ money! | skewred.com
- How did I get in this handbasket? : Pursuing Holiness
- MORNING INTELL: Mumbai Madness, World’s Most Dangerous WomanRosie’s Turkey | DBKP - Death By 1000 Papercuts - DBKP
- Moderate Blogger » Borrow. Spend. Panic. Repeat.
- Borrow. Spend. Panic. Repeat. « Top Daily Digest Reading
- Michelle Malkin » Bailout watch: Who’s grubbing now?
- Michelle Malkin » Hurray! Here come more bad loans!
- Papa Mike’s Blog » Blog Archive » Hurray! Here Come More Bad Loans!
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Categories: Subprime crisis
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Crap. It’s whats for breakfast, lunch and dinner. Get used to it.
This is what happens when there’s no adult in the room and when the person who’s supposed to be the adult doesn’t use bedrock Conservative principles to make decisions.
Its all very predictable, chaos.
Barbara Mikulski approves does she? I have seen debt destroy more people and families than just about any other fault. Sometimes that debt is caused by a calamity such as medical but generally it is caused by sheer giddiness and frittering.
The Smart People of Government, Academia, Wall Street and the banks have all gotten themselves wrapped into a nice self tightening trap-often called a snare. And now they want to take the rest of us down with them.
And now they want to get out of debt by borrowing more. That has destroyed more than a few people. This is looking a whole lot more like 1932 than 1978. With Fedzilla sucking up all the cash and raising the tax rate this crash will deepen. The idea that Federal Spending CREATES wealth has been proved wrong a whole lot of times. Tighten your belts. Our Dollar is about to crash. We the proposed cuts in military spending this in indeed looking like 1932.
Trust in Our God and Pray-we are in for a wild one. Or you could trust the FDIC.
And none too soon. What an absolute disaster.
1. These people wouldn’t last 10 minutes playing Sim City.
2. It certainly shows that Paulson studied the Great Depression in college: not so much on how to prevent or fix it, but the lesson of how to grab power as a result of it most assuredly took.
They have this so ack basswards. The solution is LESS government intervention, NOT MORE!! Let the free market system do its job. I know, I know, preaching to the choir.
Preaching to the choir, indeed.
Do we need any more proof that both major parties need to be defeated now and replaced with something sane?
RWR
http://www.rightwingrocker.com
http://www.federalistpartyblog.blogspot.com
Why should we pay for a company that took a trillion dollar ding when they still are worth 1 trillion. Maybe if they got nothing they would start doing business more wisely instead of biz as usual. Congrees neeeds mandatory drug testing, they must be high.
I think I’ll go buy a 22 thousand dollar Harley on my credit card then not make the card payment.
What happens when the “rich uncle” (Sam)that they think has never ending pockets goes belly up?
I wish they would use a little of that bail-out money to buy a clue!
US Economy (not responding)
CTRL-ALT-DEL
This “panic/government help” must be heaven for liberals. The worse, the better. It lets them do what they love most - control other people. Just look at what is going on. They are systematically nationalizing industry after industry. (Perhaps not technical nationalization, but do ya think those bailouts might have just a few strings attached?) I am sure Pelosi, Reid, Frank, go to bed each night with big smiles on their faces.
… and most Americans have no clue whatsoever that this is PRECISELY what the Soviets and Nazis did.
RWR
http://www.rightwingrocker.com
http://www.federalistpartyblog.blogspot.com
Our individual share of this government debacle must be nearing $40,000.
A country that allows a blithering idiot like Barney Frank to be in charge of anything - especially financial - is in a world of trouble.
These people are in over their heads - but too stupid to admit it. Just like the people they are trying to bail out.
Fixed it for ya Axel.
In the words of Credence Clear Water Revival “There’s a Bad Moon on the Rise”.
Load more ammo. Stock up on non-perishables and hunker down.
jj has it right. Ronald Reagan knew the answer, less government is the best government.
I can’t keep up with the totals of money they are spending. Where are they getting this money from? Because if they are printing it…..
Well the Wiemar republic comes to mind.
The scary think is, nobody is telling us the totals. I SUSPECT it is already over 10 trillion.
The US (us) has immense entitlement obligations, remember totalization?
Speakup, I get all that but I am talking just about these bailouts.
Why can’t he just shut his mouth? His explanations are weak at best, and it drives the markets down. God help us!
You might borrow your way out of trouble, IF you’re careful, but you can NEVER borrow your way out of debt!
This can NEVER be fixed, which I am afraid is their plan.
Sad to see but it’s time.
In other words, keep your lamps trimmed and burning,
For this old world is almost done
And this morning on Fox, they announced that Citibank is going ahead with it’s plans to spend 400 million on having it’s name on Met’s stadium.
How can this be happening????
After they are are done “distributing” here is what will happen.
http://www.absolutelyrics.com/lyrics/view/the_beatles/taxman/
Click on the youtube screen on the right.
Well, I always thought that it was right to establish good credit, pay your bills, and act responsibly. I still do. A few years ago we refinanced and went from a 30 year loan to a 15 year loan and decreased our interest rate at the same time. Well, apparently, the world has gone mad now and everyone is scrambling like a hungry crab for a handout or a free ride from the government. My next door neighbor plays the game as he charges up all his credit cards and then declares bankruptcy and gets his debts erased. Sometimes it is hard for me to understand why people can live without any pride or self esteem. I am never going to change my values and I hope that others like me won’t either. We will be the winners in the end, when all this free money and these empty promises run out.
Exactly what I am thinking. Apparently Paulson is intent on spending as much as he can before he gets kicked out of office.
I have no doubt these people are literally looting the Treasury.
Why aren’t we marching up there to tar and feather these idiots? Paulson wasn’t elected, and the Constitution clearly says all spending must originate in the House! Everything he is doing is illegal.
This is just awful.
These dangerous clown bureacrats and politicans indeed have it “bass-ackwards”.
Responsible parents know that you don’t get your kid to behave by saying, “If I let you have what you want, do you promise to stop whining (or, promise to go to bed, or whatever)?”
The way you handle whining is, “You’re losing this, that, and the other privilege, until you stop whining, and start behaving, and show me that you’ve learned better and grown up.”
So infuriating….
Real professionals use real terms to describe conditions. Doctors use medical terms, engineers use engineering terms, lawyers use legal terms and economists use economic terms. Hank Paulson demonstrates once again he is no economist by his use of non-economic terms describing and alleged condition. “Frozen credit market” is not an economic term.
He’s demonstrating he has no idea what he’s talking about.
Unfortunately, his audience (congress) also has no idea what he’s talking about but they all know the solution is to throw money at it.
Heh!
Good one!
I posted the “Taxman” lyrics a year or so ago on a thread.
Very apropos.
The sad thing is it will only get worse under the next administration. This can’t last long. We have probably doubled the national debt in 4 months.
The borrow and spend philosophy of the United States’ economy was not what made this country great. In fact, it’s not how this country was founded, and was identified by our founding fathers as means of a country’s collapse.
One thing to note is that our culture of debt is a symptom of a much larger disease. When the Federal Reserve was established, unconstitutionally, during a midnight session in 1913, our country was placed on this path. When Brettonwoods broke down, and our money became backed by nothing, the cancer accelerated. Now, the country cannot think of anything other than the Keynesian model of central economic planning, and borrow, inflate, and spend politics to get us out of a problem caused by borrow, inflate, and spend politics.
The disease has to be identified - the Federal Reserve system must be held accountable for the damage they’ve done to this country. The fact that a private, opaque, and completely self-interested central bank has the sole authority to print our money should make anyone furious to the point of revolution.
The blind leading the blind is the absolute truth Michelle. The current leadership appears to ignore the history of attempts to spend our way out of recession. Private sector jobs are what is needed, lots of jobs, jobs that will grow the real economy1
Keep spreading the truth Michelle!
The russians are already predicting the breakup of the USA into 6 regions and soon. I am not sure they are so wrong. This will include a civil war. This will get ugly soon. On the bright side for me (dark humor here) At least I will be employed as a soldier.
This can work for small recessions. This will not work for what is coming.
The end game this is leading to is the New World Order that has been the target of certain non-patriots for several decades.
The influence of America is on the wane. The Borrow - Spend - Panic cycle is hastening the descent.
Those at the top are looking out for themselves to ensure they are safe and secure once the transformation is complete — the peons (those of us they are peeing on) be damned.
Country first? They aren’t even considering it.
Is this in our future?
I keep hearing commentators mentioning the various ways that these bailouts violate the Constitution.
So why is nothing being done about it? Is there no one in this land of 300 million to bring this before the high court?
What constitution?
The high court is just as corrupt as the bureaucrats who appoint them.
I have felt from day one that this congress has no idea what in the heck they are doing. Pelosi is an idiot and all they can do is keep throwing money and hope that the printing presses don’t break down. Well, it’s all coming home to roost soon. Just wait. God deliver us from the politicians and send us some leaders.
e.g. Barney Frank - need I say more?
Dear Secretary Paulson,
I know how you feel. Nobody believes in me anymore, too. Either that, or everybody hates me. Oh well. Might as well eat a worm.
Signed,
Creative Destruction
*out*
I’d have to look it up, but I bet they were for tightening up bankruptcy laws…
Sorry, disagree. Roberts, Alito, Scalia corrupt? Hardly.
Snort.
Paulson couldn’t lead a pack of hungry wolves to fresh meat. And given its 35% drop since Paulson got the bailout he wanted when he groveled before Nancy, I’d say the stock market agrees with that assessment.
How many of these approving congressional people were re-elected Nov. 4th, there is the answer to all our governmental problems…Ill informed voters.
As Walter says “dumb a$$es”!
Is there a map? I’d like to move to an area where the political philosophy of the citizens is worth defending. It’s a great shame that I don’t think VA falls in that camp anymore. She has gone the way of the northeast.
those who can’t learn from history are doomed to repeat it….even recent history….
And I moved to NC ten years ago to get away from the Northeast! Now even NC is blue.
Lou Dobbs was the guest this morning on Imus In the Morning. Imus and Lou were discussing Larry Summers…CHANGE? Who is the smartest guys in the room now?
http://imustimes.wordpress.com/2008/11/25/imus-fat-larry-summers/
So we have a Nat’l debt of $11+ trillion and now we are going to add another $7.4 trillion to bail out everyone because they have an ow-ey! This is all happening so that the entire country is complete crap just so we can watch “the Messiah” work miracles.
Me thinks no one can raise this dead country—Paulson has made sure of that.
I wouldn’t go by the last election.
The breakup of the usa.
The federal government uses a truly broken ALICE IN WONDERLAND accounting / taxing / economic scheme. Off budget billions, unchecked borrowing and spending, setting up “Ponzi Schemes” like social security, medicare, medicaid, drug plans, etc. for others. Then they opt out and set up much better plans for themselves.
***
I wish I could do my personal finances like they do–I have to make the correct decisions or I go broke. No one is going to bail me out–why should I have to bail out those who made the bad decisions?–federal government or corporate America.
***
John Bibb
Get rid of the silly Mark to Market rule and problem is solved INSTANTLY.
The problem all started with 16th amendment.
Please join the “Fair Tax” organization.
http://www.fairtax.org/site/PageServer
I think that Russian has been off his meds for some time. He needs to be taken back to the home and given some TLC. A hug and a cookie would help too.
Didn’t Paulson say that they wouldn’t be buying up those bad assets, which was in contradiction to what he said they’d originally do with the bailout?
Nobody knows what they’re doing…
FamilyMan - I’m all for fair taxes…I’m just not sure what fair really is. Is it fair that some should pay a higher percentage? Is it fair that some who use great number of services pay the same as those who use little? Is it fair certain activities are encouraged by tax code and other activities are discouraged? My point isn’t that the tax code needs major overhauling (it does), it’s the details that will either make a winner or a loser. And as far as winners and losers go, more than a new tax code, what we most need is less money in Washington for politicians to spread around. LESS GOVERNMENT.
The only thing holding the liberals back is there’s nothing they can do to really hurt the rich. They’d do it if they could. Envy, you know. Instead, govt control of the economy hurts the poor and middle class the most.
I thought that looting was illegal. It’s time to start hanging these bastards from the highest cherry trees!
Breakup of the USA? I might not mind being separated from the Obaminites, Left coasters, Nanny Staters and gun grabbers and trolls. Who needs to be joined at the hip with people terrified of a Nativity Scene and think it is sweet when members of North American Man Boy Love Association adopt young boys?
Break up of the USA?
What is left to love? Memories? The ObamaNation? I do not think so.
—
Yes Mr Lincoln: THEY ALL DIED IN VAIN.
Current TOP Drudge Report Headline:
RUSSIAN ANALYST PREDICTS DECLINE AND BREAKUP OF USA
1) Demoralization
2) Destablization
3) Crisis
4) Normalization
America in Crisis: Are we Preparing for Martial Law and Communist “Normalization”?
Still hoping against hope that Paulson will actually advocate something sensible, like eliminating the mortgage interest deduction.
Who Really Runs Obama’s Campaign, and What is Their Agenda?
In these parts we say “bass akwards”.
When would you do that? Perhaps 1/3 to 1/2 of now stable mortgages would become untenable. There are in fact tens of millions of middle to lower income Americans whose one big expense is their home. These are the people you do not see on vacation, buying new cars or the big screen TV. They plan on doing that later in life-post mortgage as my parents did. These people often work two jobs to hold on–they did not get the Community Reorganization loans.
I would like to see the elimination of the Cash Out deduction. Too many people borrowed against their house to make retail purchases and ended up “Upside Down” - owning more than the value of the house. But I would be cautious: take away their dreams and people quit trying. But maybe the government would make enough to buy those house cheap and become our landlords too.
I would be cautious.
When, exactly, will Congress arrest itself for being the serial felon that it is?
When will Iraq return the favor an invade us in order to install the conservative strongman we need?
Flight 93 should have been allowed to continue.
I am sick and tired of hearing that AIG is too big to fail, OR Citigroup is too big to let fail. Damn it, our nation WILL FAIL if these tyrants keep spending Trillions of dollars that we don’t have!!! The USA is on the brink of failure!!!
we have spent well in excess of 1 trillion dollars SOMEWHERE. where did it go, who got the dough, and what did it buy? typical government spending, they don’t know any of the above question’s answers, yet they want to continue because IT HASN’T WORKED YET!
? I am struggling as to why anyone would advocate that solution. This problem has nothing to do with the problem at hand. In fact, it would worsen the problem by causing homeowners on the brink to be unable to unafford payments, as ArizonaNeanderthal highlights. It is also nothing more than an increase in taxes by taking away a deduction. Additionally, higher income individuals actually lose this exemption due to, among other rules, AMT. So the only peopel hurt by such a repeal would be the true middle class (gov’t always helps the poor and the truly rich are unaffected). I am scrtching my head on this one.
Oklahoma is the reddest state left but I don’t think we can absorb all the disillusioned blue staters.
Rathergate II: Certification of Live Birth a clear forgery
I think the Indonesian citizenship is the biggest issue.
Who came up with this stupid phrase “too big to fail”? It sounds like some crass yuppy-speak meaningless BS. Right up there with “too big to sink” (titanic) or “too big to fly” (spruce goose). Nothing is too big to fail. Check out the Third Reich, the Roman Empire, and if our Congress keeps running amuk, the soon to be late, great United States of America.
Some need to see this:
Why do you think so many homebuyers go for houses they really can’t afford, and make small down payments?
Could it be that something is encouraging them to borrow huge amounts on mortgages?
Eh, could be …
corona your premise is that tax deductions encourage overspending on mortgages, but you must have a high income if you hope to take that large of a deduction. and as said above, amt sets in and takes it away anyway. the real problem is yuppie egos which say i’m a success and i need a big house, 2 new luxury cars, diamonds for my wife and girlfriend, plus trips and rolex’s for me. voila, bankruptcy. i live a few blocks away from someone who built an absolute castle last year on a big expensive lot, my guess 15,000 sq feet of house, and it’s up for sale now. just a little overreaching by some wizard of industry.
IMHO, it is a stretch to beleive that interest deductions encourage people to buy more house than they can afford. I don’t see one equating to the other. Now, an argument could be made for the capital gains treatment on the sale of a house as encouraging speculative buying (live in house 2 years, sell, and no tax on gians if buy new house within 2 years). However, that rule also benefits anyone who is legitmatley trading up or being tranferred for a job (ie simply another tax increase if taken away). The way to stop the nonsense of buying more than one can afford is to simply go back to the tried and true principle of loans based on means. 20% down, credit check, traditional mortgages, and a conservative ratio of income to debt. That halts speculation and prohibits morons from driving up prices to unreasonable levels.