How to fix the Economy

[mtnsldr]

I make no claims to be an economist, or even to really know all that much about the credit industry and how it works, but this is something that has been brought up in my office, and I wondered if there was anyone here who could shed some light on the legitimacy of the idea:

If the government were to "bail out" either the people of America carte blanche (IE sending a fixed amount, large sum relief deposit to all Americans filing taxes, say 200,000 dollars or so) or homeowners specifically, instead of sending that money to mortgage companies, wouldn't we see a more widespread economic recovery? For example, people with mortgages would pay down their mortgages by a significant amount, causing a flush of money into these destabilized lenders, and ensuring that these people would be more capable of paying their lower mortgage amounts each month. Also, it would likely allow for people to flood some money back into main street businesses outside the mortgage industry, ensuring a more fruitful recovery across the board. In addition, these funds would likely be available for taxation, ensuring the government gets their piece of the payout...

Just some ideas, wondering what people smarter about this think...

[Machine]

I'm no economist either, but I do have a problem with the idea of government writing a check to everyone who is in dire financial condition. The problem, simply enough, is that I am not in a bad financial situation, and the money they would give away would have to be mine to some extent. I've made horribly wrong financial decisions in my life, and I bailed my own ass out. I have no interest in financing other people's problems, because bailing them out teaches them nothing worthwhile.

[HairyEyeball]

How many of our economic 'problems' are due to government intervention? How would more of the same do anything but compound the felony?

We're balancing on a bubble created by the unintended - and myopically unforeseen - consequences of the heavy hand of government, and further intervention will only spin it and create more smoke and mirrors. It may be a case of the cure being less palatable than the disease, but the only 'fix' is to pull the government out of the market(s) and let the economy right itself. There will be 'casualties' - people who have subsisted on government largesse - the socialist redistribution of income - will have to (gasp!) earn their daily bread or beg aid from private charity; poorly run institutions and businesses propped up by siphoned 'government' funds will collapse under their own weight and mismanagement; government-funded 'researchers' will have to make 'discoveries' that justify their existence, rather than considering their laboratories and paychecks a sinecure for stalling.

Lest we forget, this nation was once a cluster of colonies huddled by the sea - it was individual initiative and 'the courage to dare' that made it - all too briefly, it seems - the envy of the world. Too, our elected 'representatives' are just that - hired help. Unless and until we hold them to their 'contracts of employment', we have the right and the obligation to fire them.

[StarLifter]

Machine has a point there. Plus, assuming that roughly 1/4 of the estimated population of the U.S. (estimated at 300 million, so roughly 75 million) are homeowners who would qualify for an estimated $200,000 let's call it property relief check, it would come out to roughly 15 trillion dollars in payouts by the U.S. government, which is almost 21.5 times the amount that is being discussed (700 billion) as part of the 'bailout' or 'rescue' or whatever they're calling it plan presently on the table. Issuing 15 trillion dollars out of deficit (which if I read correctly, is where the 700 billion would be coming from) would more than double the country's current deficit.

[SlightlyCatholic]

If the government were to "bail out" either the people of America carte blanche (IE sending a fixed amount, large sum relief deposit to all Americans filing taxes, say 200,000 dollars or so) or homeowners specifically, instead of sending that money to mortgage companies, wouldn't we see a more widespread economic recovery?

Of course, you'll always have those brilliant minds who would rather spend their money on pills that allow them to "fly and see purple elephants" or even better, lose all that money on a horse race or a blackjack table. Some people, even when helped, won't help themselves.

[Machine]

Originally Posted by Seminarian_Tim

Of course, you'll always have those brilliant minds who would rather spend their money on pills that allow them to "fly and see purple elephants" or even better, lose all that money on a horse race or a blackjack table. Some people, even when helped, won't help themselves.

Good point, and let's not forget boys and girls, this bailout is not about helping people stay in their homes. No sir, it's about getting the bankers paid for following the idiotic regulations forced upon them by government. The boom/bust cycle created and regulated by the Federal Reserve is the problem, and it's all subject to the golden rule.

[sfcgragg]

Fixing the economy is simple; having the willpower to do so, however, is the difficult thing.

1- Don’t spend more than you have coming in.
2- Start a budget (and stick to it).
3- Place some (preferably 10% or more) of your income into an interest producing savings account.
4- Don’t spend any money on high dollar items, without discussing it with your significant other *.
5- Don’t give large amounts of money to charity without discussing it with your significant other *.


I know there are many other good points to add to this, it isn’t intended to be all inclusive, but is is basic, and will work!!!


If our elected leadership would adhere to the above rules, we wouldn’t be in this situation.


*Note: On the national level, the US tax payer is the significant other!!!