Proposal to add buying of CC Debt

[treehugger1]

[AngelinaCatHub]

Sounds like a real nice step towards Fascism. 'Hub

[treehugger1]

Hmm, perhaps. It certainly doesn't seem like capitalism and it isn't quite socialism. Some other (perhaps new) "ism."

[AngelinaCatHub]

Like....err....Communism??

[magyar123]

Let's assume this really happens. I think what will happen is that the govt. will pass out these debts to a very few institutions - their sweethearts - and invent ways to make filing bankruptcy even harder.

[AngelinaCatHub]

Let's assume this really happens. I think what will happen is that the govt. will pass out these debts to a very few institutions - their sweethearts - and invent ways to make filing bankruptcy even harder.

And the little man who is the backbone of this Country, get's it in the end, again! 'Hub

[justbroke]

The key is, with the way the 3-page plan is written -- which will surely be fattened up with all sorts of pork... I mean... additional guidelines -- was to buy securitized mortgages. That didn't include straight credit card debt (which isn't securitized or even collateralized).

Just like during Katrina, when there's a lot of money being spent... the sharks smell the blood in the water and start circling.

Why would the government even contemplate buying credit card debt. It has no asset backing it! DUMB DUMB DUMB.

At least the mortgage "purchase" that the government does, could actually make the Government some money. Actually, unless ALL MORTGAGE LOANS go bad, the Government $700B will not really be $700B when it's all said and done. it could be half that (once they sell them back).

You'll have to remember that this debt package that the US is going to buy, is not all bad debt! It's just so securitized, it makes it difficult for things like modifications, forbearances, and the similar techniques for keeping people in their homes.j Plus, there is a huge trickle-down problem with letting the housing market fall in shambles.

Even if they sold them back at a discount... it still won't be $700B, unless the Government (Treasury Dept) thinks it's a revolving line of credit...

I think the Plan has merits. I think if you start adding the pork to it... it will just be the same old Congress up to the same old things. Remember, it's the Congress who created the laws under which these Banks and Institutions operate.

[treehugger1]

The 3-page plan could easily become a 100-page plan. As most of us well know, the issue of unsecured debt is potentially the next ogre to rear an ugly head. I have to believe that the Congressional Committee is keeping unsecured debt on the radar screen. I can almost see them packaging such debt in the same manner financial institutions did; auctioning a porfolio of bad debt. But, instead of the banks having to "eat it," the government would absorb the difference. At some point, the world will have to recognize the inability of folks to pay and/or collect on unsecured debt. I see know reason not to throw unsecured debt into the discussion and approach to stabilizing the financial problem.

[justbroke]

I think I'd prefer two different plans to approach the two different types of debt. I really don't want the government just to buy all the bad, noncollectable, debt.

I'm no economist, so my simple read is that secured and unsecured debt are two different issues. If you added in the unsecured debt, I wouldn't even want to see a $1.7T program... under a single agency. I don't trust Congress with $700B let alone $1.7T.

Suffice it to say, I know that I don't have an answer for unsecured debt. The lack of access to money via unsecured credit (and loans) will cause some problems... but does that mean we (the People) have to bailout the current debt problem to get more cash into the system? beats me.

[JRScott]

No Bail Out of anyone is what they need to do.

The government already has a 9+ trillion dollar debt (private and public)
It has an unfunded 53+ trillion dollars of entitlement benefits.

They can't afford it and the American people can't afford it. If anyone believes us the taxpayers would ever see any money from this they are kidding themselves. The government spends more money than it gets already. It'll be like candy to them.

I say let the financial institutions fail. They chose risky investments, they knew people could not afford them and that they should not have lent them. This proposal is a fine example of what's wrong in our country. Why we have an ever increasing number of high school drop outs. After all why finish school if the government will bail you out? Freedom has to include consequences for bad choices, without them there is no real freedom.

May God help us all if this thing passes in any form. I think it will ultimately be the death of the United States of America as we know it. If we let them fail, then perhaps they'll learn.

[BROKENN]

They chose risky investments, they knew people could not afford them and that they should not have lent them.

We don't get bailed out when we choose to make risky investments....... let those companies file BK and fill out the forms like I did........

[justbroke]

No Bail Out of anyone is what they need to do.

I hear you.

However, do you know why Congress has to bail out the People? Because if they don't do anything, they'll all be blamed and loose their cushy jobs in Washington. The people need to stop just blaming the banks.

This is about an election. Nothing would have occurred in a non-presidential election year. Trust me. This is what defines Politics.

Not one politician is going to stand up and say No. Maybe a few will vote "Present"... but that's a "yes" to me. Any congressman who does vote No, will qualify it by saing that "it didn't address this particular area".

Not one will say flat out... uh uh, no way, no how, never.

In the end, our economy and the reputation of those in Congress, which is terrible anyhow, are on the line. I do understand the Freedom argument should be that we make decisions, we live with them. On the other hand, the Government has a duty to protect the people and to provide the ability for its citizens to pursue "life, liberty and happiness".

So, now this is where the rubber meets the road. Thirty years of policy which created the world's largest economy and greatest economic times, now fails due to the underlying mechanics. Who would have thunk it? Perhaps the theory of a market-driven economy has run its course?

So many questions... no answers.

[JRScott]

We don't get bailed out when we choose to make risky investments....... let those companies file BK and fill out the forms like I did........

I wrote my Senators and Congressman this weekend and pointed out that very thing, they wanted those BK reforms so badly let them now go through the process I think was my words.

[BROKENN]

I wrote my Senators and Congressman this weekend and pointed out that very thing, they wanted those BK reforms so badly let them now go through the process I think was my words.

Exactly! I am completely agreeing with you and getting to rant at the same time!

[JRScott]

I hear you.

However, do you know why Congress has to bail out the People? Because if they don't do anything, they'll all be blamed and loose their cushy jobs in Washington. The people need to stop just blaming the banks.

This is about an election. Nothing would have occurred in a non-presidential election year. Trust me. This is what defines Politics.

Not one politician is going to stand up and say No. Maybe a few will vote "Present"... but that's a "yes" to me. Any congressman who does vote No, will qualify it by saing that "it didn't address this particular area".

Not one will say flat out... uh uh, no way, no how, never.

In the end, our economy and the reputation of those in Congress, which is terrible anyhow, are on the line. I do understand the Freedom argument should be that we make decisions, we live with them. On the other hand, the Government has a duty to protect the people and to provide the ability for its citizens to pursue "life, liberty and happiness".

So, now this is where the rubber meets the road. Thirty years of policy which created the world's largest economy and greatest economic times, now fails due to the underlying mechanics. Who would have thunk it? Perhaps the theory of a market-driven economy has run its course?

So many questions... no answers.

I think you'll be surprised. I do believe some will vote No. I don't know if it will be enough. The final bill will probably be over 500 pages with no one really having a clue what it has in it.

I do agree that probably a majority will pass it, whether it will be a veto proof majority I don't know. Depending what they tack onto the bill Bush could veto it, though lets face it he has vetoed the fewest pieces of legislature of anyone in the last 50 years. (Reagan vetoed the most in that time).

I believe fundamentally they will do it to keep their jobs, to keep the illusion that they are doing something. They are afraid. They are afraid of the United States being downgraded on monetary matters. Because that will mean less credit in the future and higher interest rates. It would mean almost overnight a doubling of the interest payment owed each year. It would mean they'd have to do what they should have done 30 years ago, that is learn to live within the means of the nation, that means cutting programs and services to what they can afford and stop doing the fancy accounting that has led us here. In the last 40 years federal spending has outpaced by a factor of 9 to 1 the rise in median income for the nation. It is not sustainable but they seem to want to keep it going as long as they can so as many of them can retire as possible.

Perhaps as a cost cutting program we could force all Federal Employees to live on minimum wage.....I'm sure the Senators and President would enjoy that.