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Originally Posted by Blacklight
The whole bailout thing just REALLY pisses me off. These banks should be held accountable. Not given more cash for their CEO's and the upper echelon guys to line their pockets more because we all know that that's exaclty where this bailout is going to go. Into their pockets and overseas.
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Oh ho! I think it is going far worse places than that. It's going into the national debt as well. You might as well just print 700 billion dollars and destroy the currency.
If the banks had to figure a way out of this mess, the loss would not be so great. Some of those high-risk loans could still be bought if the borrowers had good history of payment with their loan. People who did default would have their homes foreclosed and liquidated by the bank, recouping at least some of the loss.
But when the government steps in and assumes liability for all "assets", it directly translates into inflated money supply. Banks limit their inflation of the money supply by balancing assets and liability, and also invest heavily in generally sound venues, thus generating wealth both for the bank and for those they invest in, in the form of company growth and jobs. A little borrowed is offset by a little lent and a wise investment policy. And if they fail, they die. Sucks to be them but whatever.
Government control of these failed companies assets basically transforms all of these near-currency assets into real currency. They might as well print "legal tender for all debt, public and private" on it.
Now we are really fecked because that money makes ours worth less, and there will never be any salvageable loans. Even if they somehow make a profit, they would eat it all up in administration costs or devote it to another program.
One way or another, the execs are going to have golden parachutes, the plutocratic nature of government-heavy business is going to ensure that. But what they steal is a pin***** compared to what the state is about to thrust upon us.
And they'll ultimately be the only ones laughing all the way to the bank.
