in 2005 republicans made bankruptcy laws much tighter. Despite it, I still successfully filed chapter 7 protection last year and wiped out 0000 insecure debt. The reason for cracking down on bankruptcy filers in 2005 by repubs were as follows — "people should be financially responsible". As if the government is very financially responsible? How can government tell people to be financially responsible when they themselves are reckless spenders like bailout, iraq war spending, etc etc? That’s being so hypocrite. Also republicans now say, "its not government’s job to tell people how to live". Again they defy their own advice. And most of all, its not person’s fault he goes into bankruptcy. The recession caused millions to become bankrupt, when they lost jobs. And in such situation Bush/Cheney led government tried to choke and hurt these people by making it harder for them to file chapter 7? Then why didn’t they let corporations file chapter 11 instead of being bailed out? Hypocrite republicans. Also shows republicans are only for the rich and not poor. This proves it.
its not copy/paste. its my own thoughts 100%.
comrade: Why do corporations have to be bailed out then? if they can be bailed out, I should be allowed bankruptcy too
both joes: FAIL
no wonder republicans lost house, senate in 2007 and presidency in 2008.
conservative anger: how are you going to pay when you have no money? with a magic wand?
showing the anti-bankruptcy model hurt GOP itself. That was political suicide. From thereon, Bush ratings dropped dramatically and 1 year later they were booted from house and senate
Notice right now Palin and various GOP leaders avoid debate on bankruptcy laws and don’t ever talk of cracking down on bankruptcy. Notice they changed their position now.
Joe: you say, " No Republican forced millions of people to buy homes, cars, and other things outside of their means leading them to the point where they need to file bankruptcy." What about bankruptcy due to job loss or medical emergency? are you trying to say all bankruptcies are due to negligence? you are cruel and heartless, like typical conservative
comrade joe: you can eliminate bankruptcy law but that doesn’t mean creditors will be paid. If there is no money, there is no payment. its that simple

Technorati Tags: anger, bailout, bankruptcy filers, bankruptcy laws, bankruptcy notice, bush cheney, chapter 11, chapter 7, comrade, corporations, gop, gop leaders, hypocrite, iraq war, magic wand, political suicide, presidency, recession, reckless spenders, republicans

While never having to look back at any of it’s obligations on hand at the moment; or get a bailout from the government in order to continue business. All of this is business as usual, and the entire charade is not be frowned upon. Yet, an individual who has to file for bankruptcy has so many hoops to jump; let alone doesn’t have the option to change their name, move to another state, and start over with a new Identity…even when it comes to paying state taxes?

Should Corporations have the same hardcore loops to jump through as the average American taxpayer?
Sohale-

I guess my real point is the fact that companies have closed down, filed bankruptcy, and started a new without having to pay state taxes; not to mention leaving people empty handed (customers) while tax payers foot the bill…A good example would be GM. Even if they go under, the American taxpayer will be stuck with billions they will not be able to pay in taxes. However, in order to stay ‘viable’, the American taxpayer is again stuck for billions, while at the same time individuals still profit…

Technorati Tags: american taxpayer, bailout, bankruptcy, billions, charade, corporations, gm, hoops, new identity, state taxes, tax payers, time individuals

I know you are dying for those great Republican leaders to return to office, but hop on my magical carpet ride and let’s revisit the days of President George Walker Bush:

–Fraudulent, needless invasion of Iraq off cooked intelligence
–hijacking of the surplus Clinton left him
–Medicare reformed that fattened the pockets of Big Pharma (and drained our Treasury of billions)
–Silly idea about reforming Social Security (hilarious how the markets collapsed right after his tour)
–complete collapse of the global economy
–car companies going bankrupt
–insurance companies going bankrupt
–banks going bankrupt
–airlines going bankrupt
–torture
–military procedures ruled unconstitutional by Supreme Court
–unfunded occupation in Afghanistan (because he was too busy looking for those fairy tale nukes in Iraq)
–lied to America about the purpose of TARP (his 700 billion dollar bailout program)

Need I say more?

Technorati Tags: bailout, bankrupt airlines, billions, car companies, collapse, economy car, fairy tale, george walker bush, global economy, insurance companies, invasion of iraq, magical carpet, medicare, nukes in iraq, pharma, pockets, reforming social security, republican leaders, silly idea, social security

The government will have to borrow nearly 50 cents for every dollar it spends this year, exploding the record federal deficit past .8 trillion under new White House estimates.

Budget office figures released Monday would add billion to the 2009 red ink — increasing it to more than four times last year’s all-time high as the government hands out billions more than expected for people who have lost jobs and takes in less tax revenue from people and companies making less money.

The unprecedented deficit figures flow from the deep recession, the Wall Street bailout and the cost of President Barack Obama’s economic stimulus bill — as well as a seemingly embedded structural imbalance between what the government spends and what it takes in.

http://finance.yahoo.com/news/White-House-Budget-deficit-to-apf-15199183.html?.v=8

Government spending is paid for 1 of 2 ways:

1)monetizing debt ("printing" money) which leads to more inflation (=each dollar bill has less purchasing power)

2)higher taxes & new hidden taxes (carbon taxes, etc)

Well since taxes won’t even begin to cover TRILLIONS in new spending, option one is being used to the max.

Now I want you to watch this 60 minutes interview from 2007. In it, the former comptroller general (nation’s top accountant) says the United States government is bankrupt and that if it were a company if would have failed by now. He also says that at CURRENT spending levels (2007 levels) the U.S. govt. could only afford to pay social security and some medicaid by 2040.

http://www.youtube.com/watch?v=OS2fI2p9iVs&feature=related

Since then we have passed trillion in bailouts, nearly trillion dollars in "stimulus", and Obama has proposed AN ADDITIONAL .5 trillion budget.

Now if the comptroller general thought the U.S. couldn’t afford to pay for Bush’s prescription drug bill (from many years back), HOW is Obama going to pay for all this new spending???

He’ll either have to raise taxes to levels undreamed or hyperinflate the dollar attempting to monetize more debt.
boss h……………probably higher than that.

Technorati Tags: 2 ways, 50 cents, 60 minutes, bailout, barack obama, budget deficit, budget office, comptroller general, dollar bill, economic stimulus bill, federal deficit, finance yahoo, government hands, government spending, option one, prescription drug bill, purchasing power, recession, red ink, trillions

OBAMA truth REVEALED – Received by mail
Posted on July 28th, 2010 by David-Crockett

This is an interesting story, put together from various articles and TV shows, by the British Times paper.OBAMA truth REVEALED

It shows what Obama and his friends are really all about. It’s not hope and change, it is money.

I warn you, the first part is a little boring, but stick with it.

The second part connects all the dots for you (it will open your eyes).

The end explains how Obama and all his cronies will end up as multi-billionaires.

A small bank in Chicago called SHOREBANK almost went bankrupt during the recession.

The bank made a profit on its foreign micro-loans (see below),

but had lost money in sub-prime mortgages in the US.

It was facing likely closure by federal regulators.

However, because the bank’s executives were well connected with members of the Obama Administration,

a private rescue bailout was arranged.

The bank’s employees had donated money to Obama’s Senate campaign.

In other words, ShoreBank was too politically connected to be allowed to go under.

ShoreBank survived and invested in many “green” businesses such as solar panel manufacturing.

In fact, the bank was mentioned in one of Obama’s speeches during his election campaign

because it subjected new business borrowers to eco-litmus tests.

Prior to becoming President, Obama sat on the board of the JOYCE FOUNDATION, a liberal charity.

This foundation was originally established by Joyce Kean’s family,

which had accumulated millions of dollars in the lumber industry. It mostly gave funds to hospitals.

But after her death in 1972, the foundation was taken over by radical environmentalists and social justice extremists.

This JOYCE FOUNDATION, which is rumored to have assets of 8 billion dollars,

has now set up and funded, with a few partners, something called the CHICAGO CLIMATE EXCHANGE, known as CXX.

It will be the exchange (like the Chicago Grain Futures Market for agriculture) where Environmental Carbon Credits are traded.

Under Obama’s new bill, businesses in the future will be assessed a tax on how much CO2 they produce,

(their Carbon Footprint) or in other words how much they add to global warming.

If a company produces less CO2 than their allotted measured limit, they earn a Carbon Credit.

This Carbon Credit can be traded on the CXX exchange.

Another company, which has gone over their CO2 limit, can buy the Credit and “reduce” their footprint and tax liability.

It will be like trading shares on Wall Street.

Well, it was the same JOYCE FOUNDATION, along with some other private partners and Wall Street firms,

that funded the bailout of ShoreBank.

The foundation is now one of the major shareholders. The bank has now been designated to be the “banking arm” of the CHICAGO CLIMATE EXCHANGE (CXX).

In addition, Goldman Sachs has been contracted to run the investment trading floor of the exchange.

So far so good; now the INTERESTING parts…

One ShoreBank co-founder, named Jan Piercy, was a Wellesley College roommate of Hillary Clinton.

Hillary and Bill Clinton have long supported the bank and are small investors.

Another co-founder of Shorebank, named Mary Houghton, was a friend of Obama’s late mother.

Obama’s mother worked on foreign MICRO-LOANS for the Ford Foundation.

She worked for the foundation with a guy called Geithner. Yes, you guessed it.

This man was the father of Tim Geithner, our present Treasury Secretary, who failed to pay all his taxes for two years.

Another founder of ShoreBank was Ronald Grzywinski, a cohort and close friend of Jimmy Carter.

The former ShoreBank Vice Chairman was a man called Bob Nash.

He was the deputy campaign manager of Hillary Clinton’s presidential bid.

He also sat on the board of the Chicago Law School with Obama and Bill Ayers, the former terrorist.

Nash was also a member of Obama’s White House transition team.

(To jog your memories, Bill Ayers is a Professor at the University of Illinois at Chicago.

He founded the Weather Underground, a radical revolutionary group that bombed buildings in the 60s and 70s.

He had no remorse for those who were killed, escaped jail on a technicality, and is still an admitted Marxist).

When Obama sat on the board of the JOYCE FOUNDATION,

he “funneled” thousands of charity dollars to a guy named John Ayers, who runs a dubious education fund.

Yes, you guessed it. The brother of Bill Ayers, the terrorist.

Howard Stanback is a board member of Shorebank. He is a former board chairman of the Woods Foundation.

Obama and Bill Ayers, the terrorist, also sat on the board of the Woods Foundation.

Stanback was formerly employed by New Kenwood Inc., a real estate development company, co-owned by Tony Rezko.

(You will remember that Tony Rezko was the guy who gave Obama an amazing sweet deal on his new house.

OBAMA truth REVEALEDYears
OBAMA truth REVEALEDYears prior to this, the law firm of Davis, Miner, Barnhill & Galland had represented Rezko’s company and helped him

get more than 43 million dollars in government funding.

Guess who worked as a lawyer at the firm at the time. Yes, Barack Obama).

Adele Simmons, the Director of ShoreBank, is a close friend of Valerie Jarrett, a White House senior advisor to Obama.

Simmons and Jarrett also sit on the board of a dubious Chicago Civic Organization.

Van Jones sits on the board of ShoreBank and is one the marketing directors for “green” projects.

He also holds a senior advisor position for black studies at Princeton University.

You will remember that Mr. Van Jones was appointed by Obama in 2009 to be a Special Advisor for Green Jobs at the White House.

He was forced to resign over past political activities, including the fact that he is a Marxist.

Al Gore was one of the smaller partners to originally help fund the CHICAGO CLIMATE EXCHANGE.
He also founded a company called Generation Investment Management (GIM) and registered it in London, England.

GIM has close links to the UK-based Climate Exchange PLC, a holding company listed on the London Stock Exchange.

This company trades Carbon Credits in Europe (just like CXX will do here) and its floor is run by Goldman Sachs.

Along with Gore, the other co-founder of GIM is Hank Paulson,

the former US Treasury Secretary and former CEO of Goldman Sachs.

His wife, Wendy, graduated from and is presently a Trustee of Wellesley College.

Yes, the same college that Hillary Clinton and Jan Piercy, a co-founder of Shorebank attended. (They are all friends.)

Interesting? And now the closing…

Because many studies have been exposed as scientific nonsense,

people are slowly realizing that man-made global warming is nothing more than a money-generating hoax.
As a result, Obama is working feverishly to win the race.

He aims to push a Cap-and-Trade Carbon Tax Bill through Congress and into law.

Obama knows he must get this passed before he loses his majority in Congress in the November elections.

Apart from Climate Change he will “sell” this bill to the public as generating tax revenue to reduce our debt.

But, it will also make it impossible for US companies to compete in world markets and drastically increase unemployment.

In addition, energy prices (home utility rates) will sky rocket.

But, here’s the KICKER (THE MONEY TRAIL).

If the bill passes, it is estimated that over 10 TRILLION dollars each year will be traded on the CXX exchange.

At a commission rate of only 4 percent, the exchange would earn close to 400 billion dollars to split between its owners,

all Obama cronies. At a 2 percent rate, Goldman Sachs would also rake in 200 billion dollars each year.

But don’t forget SHOREBANK. With 10 trillion dollars flowing though its
ccounts,

the bank will earn close to 40 billion dollars in interest each year for its owners (more Obama cronies), without even breaking a sweat.

It is estimated Al Gore will probably rake in 15 billion dollars, just in the first year.

Of course, Obama’s “commissions” will be held in trust for him at the Joyce Foundation.

They are estimated to be over 8 billion dollars by the time he leaves office in 2013, if the bill passes this year.

Of course, these commissions will continue to be paid for the rest of his life.

Some financial experts think this will be the largest “scam” or “legal heist” in world history.

Obama’s cronies make the Mafia look like rank amateurs.

They will make Bernie Madoff’s fraud look like penny ante stuff.

Technorati Tags: bailout, billion dollars, business borrowers, cronies, cxx, david crockett, election campaign, interesting story, joyce foundation, kean, litmus tests, lumber industry, mail, micro loans, panel manufacturing, private rescue, radical environmentalists, senate campaign, solar panel, sub prime mortgages

This is what I think about the automaker bailout:
The big 3 need to throw away old baggage of inefficient operations, high executive pays, and high union powers.

My suggestions are:

- Declare bankruptcy (only option to cut all ties with inefficiency)
- Merge operations and create a new company
- Sell off plants to foreign automakers to create more capital(to Hyundai, Kia, or any company that is looking to have production in US), this way workers can still keep their jobs but just with different bosses

What is your take?
I believe they are trying to go green but they are late compared to Japanese manufactures.
If an restructuring was to happen, I say screw it with the half-ass green-wannabe hybrids and just go green. Set goals to produce electric, bio-fueled cars and phase out existing cars.

And as far as capitalist governments go.. well.. the companies are US companies..
*Meg

The cost of bankruptcy to the economy and the auto workers and the auto industry is astronomical.. which i understand, but without an revolution will things get better?

Any suggestions for the problem?

Technorati Tags: auto industry, auto workers, automakers, bailout, bankruptcy, economy, fueled cars, governments, hybrids, hyundai, inefficiency, inefficient operations, jobs, kia, meg, plants, restructuring, ties

Bailout isn’t going to happen…
and the more I think about it the worse the bailout idea gets

from link:

Reorganization Under the Bankruptcy Code

The chapter of the Bankruptcy Code providing (generally) for reorganization, usually involving a corporation or partnership. (A chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time. People in business or individuals can also seek relief in chapter 11.)

http://www.uscourts.gov/bankruptcycourts/bankruptcybasics/chapter11.html

That is the way it’s done when company can no longer compete…for whatever reasons…isn’t it?

Technorati Tags: bailout, bankruptcy code, bankruptcycourts, chapter 11, chapter11, creditors, debtor, partnership, plan of reorganization, uscourts gov

With subprimes coming to an end (about time), Now it’s time for the Option-arms and Alternative A-papers, which will tack on another trillion or so in write offs for companies which are already tinkering on bankruptcy (even with the bailout)

then in about 2-3 years, we’re going to see the credit crash as those millions of americans who have tens of thousands in credit card debt and other non-mortage loans default, especially if they start to lose jobs / give up as buying power decreases.

Heck, In my ranked MBA program, a vast majority of my fellow students have 10-25k in credit card debts which they just plan on paying off with their "high paying" MBA jobs- which they aren’t getting because everyone has hiring freezes. If these are supposed to be some of the "smart ones" among us, what do you make of the rest?

Although in the financial discussions, there seems to be backlash against the media for saying that the "majority of americans" are in MAJOR debt, as in fact it’s only a "very small percentage" (44%). Now, these articles are literally stating 44% is a small percentage- and that 55% are being very good trying to pay their bills off in time. However, I also read that the majority of bankruptcy’s are people who "do not spend wildly, but are in debt to to other reasons such as loss of jobs or health problems". If the job market turns downwards, buying power decreases, and salaries don’t keep up with inflation would that not suggest that even those who "try" are likely to rack up more debt? and isn’t it likely that this 44% is likely to increase to 50, 55%? In this case we are saying atleast almost 50%, and potentially more than 50% are likely to run into major credit and debt issues?

Then with credit card companies such as American Express already tinkering on bankruptcy, a CC card company going under would only add to the fun.

That in itself could be the next great depression. What do you think?

Now I could be taking this a little far, and I don’t expect anyone to agree with me beyond this, however, I raise yet another question- If over 1/2 of america loses their buying power and credit-worthyness all together, based on what I see in the Government now, I would presume that they would feel the need to step into action, and bailout the individuals- and in this situation, it seems like the only action which they could do is to take control over many aspects of the country, essentially creating an extreme socialist culture overnight.

Although I have my savings spread in Euros, Rupees, and Dollars, the intense globalization occurring as of the last 10 years means that money isn’t safe anywhere. So now I’m thinking maybe I should just rack up 30k in debt since I’ll be in the doghouse with everyone else anyway, and 5-10 years from now we’re all going to be in the same position whether we have 000 in the bank, or -000 in our credit history.

Technorati Tags: 25k, 3 years, american express, backlash against, bailout, credit card debt, credit card debts, debt issues, fellow students, freezes, great depression, health problems, heck, inflation, mba program, mortage loans, option arms, salaries, smart ones, trillion

I have a family, we don’t charge anything anymore. Been paying on these bills for several years. Make good wages, all goes to credit card payments. Have about 120 bucks a week for groceries, gas, entertainment. I’m gonna whine here a bit so bear with me, I have made bad decision with my finances, put money into our house that is now maybe worth what we owe on it….Is that any different than the banks making bad decisions? You know, the whole bailout thing. Where’s mine? Or at least a low interest government loan.
Madoff, i agree with your comments. My house is not the issue.I give 65k for it with some land. My wife and i make that much per year. I don’t think i’m house poor. We all make bad decisions in our life. And i would be glad to pay my debtors back. But i can’t do it with 20% interest.

Technorati Tags: 120 bucks, bad decision, bad decisions, bailout, banks, credit card payments, debtors, government loan, groceries, money, wages, whine

http://www.youtube.com/watch?v=nAGzLfmV4Ks

"The 0 billion bailout for Wall Street, is driven by fear not fact. This is too much money in too a short a time going to too few people while too many questions remain unanswered.

Why aren’t we having hearings on the plan we have just received? Why aren’t we questioning the underlying premise of the need for a bailout with taxpayers’ money? Why have we not considered any alternatives other than to give 0 billion to Wall Street? Why aren’t we asking Wall Street to clean up its own mess? Why aren’t we passing new laws to stop the speculation, which triggered this? Why aren’t we putting up new regulatory structures to protect investors? How do we even value the 0 billion in toxic assets?

Why aren’t we helping homeowners directly with their debt burden? Why aren’t we helping American families faced with bankruptcy. Why aren’t we reducing debt for Main Street instead of Wall Street? Isn’t it time for fundamental change in our debt based monetary system, so we can free ourselves from the manipulation of the Federal Reserve and the banks? Is this the United States Congress or the board of directors of Goldman Sachs? Wall Street is a place of bears and bulls. It is not smart to force taxpayers to dance with bears or to follow closely behind the bulls."
jeremy: Yeah, that’s a good speech, too!

Technorati Tags: american families, bailout, bankruptcy, bears, board of directors, bulls, debt burden, federal reserve, fundamental change, goldman sachs, manipulation, monetary system, new laws, premise, reducing debt, regulatory structures, speculation, taxpayers, united states congress, wall street

Can you help with the grammar mistakes in this essay please?

Growing up in the suburbs of the Motor City, I have been embedded with a few simple rules. 1.Always cheer for the Red Wings! 2. Never go to Detroit at night and 3. Drive American. In the past, these rules have been pretty easy to follow. The Wings just won the cup, so how could I not cheer for them. I can’t navigate my to Detroit in the daytime so I’ll never make it at night and I can’t afford a new car so I’ll have to stick with my Ford. In the future, these rules might be a little harder to follow since the big three are in deep trouble. Most of Metro Detroit’s work force are employed by the Big Three so naturally, the numerous layoffs and buyouts have been a huge subject of local concern.
Michigan’s economy rides with the auto industry. Through hills and valleys, Michigan succeeds or suffers along with the Big Three. Since the auto industry, especially the Big Three, hasn’t been doing well, Michigan as taken a direct hit. The economy has taken a turn for the worst causing a shortage in jobs and a meltdown in the housing market. Its not hard for me to see the effect this has on my friends and family. Every time an auto maker announces another round of cuts, grim faces start to pop up all around the place. Its painful to watch the once proud community fade along with the car makers.
Although a government bailout would prevent the automakers from going into bankruptcy now, it would only delay the inevitable. The government should provide more funds and resources to allow for the Big Three to further develop hybrids and alternative fuel vehicles. Some might argue that a government bailout is unfair in a consumer driven market, but this is not the case. Having more auto makers only puts more pressure on the other to effectively research and produce alternative fuel vehicles. The overall result would be a vast amount of non-gasoline dependant vehicles manufactured at a cheaper price that would be more affordable for the average consumer.
Consumers will eventually see more options of lower priced hybrid vehicles if the government enacts assistance for the Big Three. Communities and families that are built and depend on the domestic automakers will also benefit greatly. Although a government bailout is not the most fair of things to do, it would restore a once joyful community in a small town called Canton.

thanks

Technorati Tags: alternative fuel vehicles, auto industry, auto maker, auto makers, automakers, bailout, buyouts, car makers, deep trouble, direct hit, driven market, grammar mistakes, hills and valleys, housing market, hybrids, layoffs, meltdown, metro detroit, proud community, red wings

Growing up in the suburbs of the Motor City, I have been embedded with a few simple rules. 1.Always cheer for the Red Wings! 2. Never go to Detroit at night and 3. Drive American. In the past, these rules have been pretty easy to follow. The Wings just won the cup, so how could I not cheer for them. I can’t navigate my to Detroit in the daytime so I’ll never make it at night and I can’t afford a new car so I’ll have to stick with my Ford. In the future, these rules might be a little harder to follow since the big three are in deep trouble. Most of Metro Detroit’s work force are employed by the Big Three so naturally, the numerous layoffs and buyouts have been a huge subject of local concern.
Michigan’s economy rides with the auto industry. Through hills and valleys, Michigan succeeds or suffers along with the Big Three. Since the auto industry, especially the Big Three, hasn’t been doing well, Michigan as taken a direct hit. The economy has taken a turn for the worst causing a shortage in jobs and a meltdown in the housing market. Its not hard for me to see the effect this has on my friends and family. Every time an auto maker announces another round of cuts, grim faces start to pop up all around the place. Its painful to watch the once proud community fade along with the car makers.
Although a government bailout would prevent the automakers from going into bankruptcy now, it would only delay the inevitable. The government should provide more funds and resources to allow for the Big Three to further develop hybrids and alternative fuel vehicles. Some might argue that a government bailout is unfair in a consumer driven market, but this is not the case. Having more auto makers only puts more pressure on the other to effectively research and produce alternative fuel vehicles. The overall result would be a vast amount of non-gasoline dependant vehicles manufactured at a cheaper price that would be more affordable for the average consumer.
Consumers will eventually see more options of lower priced hybrid vehicles if the government enacts assistance for the Big Three. Communities and families that are built and depend on the domestic automakers will also benefit greatly. Although a government bailout is not the most fair of things to do, it would restore a once joyful community in a small town called Canton.

thanks

Technorati Tags: alternative fuel vehicles, auto industry, auto maker, auto makers, automakers, bailout, buyouts, car makers, deep trouble, direct hit, driven market, gasoline, hills and valleys, housing market, hybrids, layoffs, meltdown, metro detroit, proud community, red wings

I believe they should.Years of poor management has gotten them here.What is your opinion
I ask this in election due to the fact of Obama could stop this with more bailout,Even though I think by now he should know bailouts don’t work
WE have a toyota and a Honda so far have been great cars.I have had a saturn,olds,and a gmc that were crap
i have a cr-v and I love it

Technorati Tags: bailout, cr, gmc, great cars, honda, poor management, saturn, toyota

The UAW union has stopped the bailout of the autoworkers and now theres a chance the automakers will go bankrupt…Hmm guess the UAW will love their UNEMPLOYED workers then huh. The Unions are the reason US Autoworkers arent competitive Forcing companies to pay their workers 2 to 3x More than the Forgien Makers .. How Are Us makers supposed to compete with that?

Technorati Tags: automakers, autoworkers, bailout, uaw union, unemployed workers, unions

Excerpts:

This bailout was a terrible idea. Here’s why.

The current mess would never have occurred in the absence of ill-conceived federal policies. The federal government chartered Fannie Mae in 1938 and Freddie Mac in 1970; these two mortgage lending institutions are at the center of the crisis. The government implicitly promised these institutions that it would make good on their debts, so Fannie and Freddie took on huge amounts of excessive risk.

Worse, beginning in 1977 and even more in the 1990s and the early part of this century, Congress pushed mortgage lenders and Fannie/Freddie to expand subprime lending. The industry was happy to oblige, given the implicit promise of federal backing, and subprime lending soared.

This subprime lending was more than a minor relaxation of existing credit guidelines. This lending was a wholesale abandonment of reasonable lending practices in which borrowers with poor credit characteristics got mortgages they were ill-equipped to handle.

The obvious alternative to a bailout is letting troubled financial institutions declare bankruptcy. Bankruptcy means that shareholders typically get wiped out and the creditors own the company.

Bankruptcy does not mean the company disappears; it is just owned by someone new (as has occurred with several airlines). Bankruptcy punishes those who took excessive risks while preserving those aspects of businesses that remain profitable.

In contrast, a bailout transfers enormous wealth from taxpayers to those who knowingly engaged in risky subprime lending. Thus, the bailout encourages companies to take large, imprudent risks and count on getting bailed out by government. This "moral hazard" generates enormous distortions in an economy’s allocation of its financial resources.

http://www.cnn.com/2008/POLITICS/09/29/miron.bailout/index.html?iref=mpstoryview

Why is this not considered as being an option? Why must the taxpayers foot the bill for bad decision making?

Technorati Tags: abandonment, bad decision, bailout, bankruptcy bankruptcy, cnn, distortions, enormous wealth, excessive risk, excessive risks, fannie freddie, fannie mae, federal policies, financial institutions, freddie mac, lending institutions, miron, moral hazard, mortgage lenders, mortgage lending, poor credit