Didn't say the gov't doesn't get involved with loans. Said the gov't doesn't make the loan,,,, I was making a point that regardless we pay because loans fail and I would not chalk that up to living a civilized life.
Yes, we pay for the failed loans. However, we benefit greatly from the loans that succeed. The loans that succeed (83% of them for SBA) generate jobs and employees that pay taxes and buy stuff, and don't collect unemployment checks.
Things are not adding up here my friend. You say you would back moose for his loan and as long as he pays you don't, that's totally incorrect. You may not pay the loan back but you have invested time and resources that's going to come from some budget, right?. On a national scale it will be in the millions for the gov to secure loans after wages, processing and energy.
You are assuming that there are only the downside of the failed loans, you are not acknowledging the benefits of the successful loans. Don't feel bad about the government and the cost of the loans. Every month 12.5% of my payment goes to the SBA for servicing cost.
You say in is not the govs place to compete for bank loans but you are okay with them taking the risk of owning assets in AIG or GM, Chrysler and who else?
I'm not sure I am OK with it, but in hindsight saving the jobs and making a $24B profit is significantly better than flushing a few hundred thousand jobs and their tax payments and disposable income from the income side of the economy into the unemployment system, which is a drain on the nation's wealth and a massive increase in debt. AIG et.al. is paying it back with a profit, unemployment and lost purchasing power is never paid back
What if the assets loose value.
Then you have to decide if the loss was worth saving the jobs. Remember, there is a direct and indirect cost to lost jobs. Would you rather pay to keep the companies going and the people working, or pay to have them collect unemployment, food stamps, and lose their homes? Me, I'll pick employment. Lenny, you will pay either way!
Do you really want the gov operating on this scale.
No, not at all. I am a capitalist, I would much prefer to have a vibrant economy that creates jobs and shareholder value. I would also like to see a resurgent middle class from these jobs.
We often see projections not adding up. I sometimes buy something I don't need and later need to sell it. Most often I take a loss because I needed to sell and didn't have the luxury to wait it out for a better market. How many times these days do we see foreclosed homes selling way under market and making a deal with the bank just to get ride of the home. A bank is not in business to own homes now is it?
You are correct
Is it the function of the Gov to own assets or take the risk on the scale we see today.
[I]No, it is the function of the economy to do that. Unfortunately, our economy is DOA and not responding. The question you need to ask is to what extent is it the government's responsibility to spur economic growth vs. allowing the free market to figure it out? The asset purchases were part of a much bigger strategy to save jobs.[/I]
I understand it is a result but I maintain it is a high risk move and unnecessary. Do you see foreclosed homes as a positive thing for a bank, the homeowner or the gov?
No, it is not positive, but it is a reality, like it or not
We have had good debate here and I will allow you to buy the beer, paying me back for the cash I loaned you,,,,just kidding,,,,,lol,,,'ll buy!
I've had a blast with you on this one.....! OK, I accept, you buy the beer!
I often think about the fundamental difference between people with opinions and ideas. What I see is that many people buy into the already existing and add to it. Often they are restricted within parameters because new ideas are to far off base. With our current Pres, he continues to further the liberal agenda to great lengths. I honestly do not use "liberal" as a negative word but rather it's actual meaning. The other way of thinking conserves what has been and is less apt to make bold moves. I personally see these days as a time to not experiment, even tho the experiment may be proven, as you state, it's the scale of size that is disturbing.
People were fed up with GW for war reasons and became desperate for change. We could have had a more conservative leader from either party without this monstrous climbing debt.
Agreed. And the problem is not the debt per se, we were all happy creating it over the last 30 years while we used the low tax rates to buy houses, boats, cars, and sleds. The problem with the debt is that the jobs it created are gone, now it's the morning after and we've sobered up and it ain't pretty
What I did say was that if the gov is going to get involved at least charge some interest.
They do, see 12.5% discussion above
A slim option for a loan from the gov, otherwise unavailable to a borrower in a emergency (and regulated responsibly) may be helpful.
Why an emergency? My buddy was just here complaining that he can't get money to grow his business, like your in-laws. He would have created jobs, bought equipment, bought trucks. Nope. No money. Ain't there. Can't get it.
It may be a poor idea but sometimes a soft heart can get people into trouble, like Rick Perry paying for college to aliens instead of them hanging around possibly gang bangin.
Hang on there, bubba! The issue on the college students in Texas and CA is not "paying for gang bangers to go to school". These students are illegal because their parents brought them in illegally at a young age (read as "not their decision"), they have grown up in the US (illegally) and gone to school here. They have done well enough to be admitted to college, but because they are illegal they pay out of state tuition. Perry's plan was to allow them to pay in-state tuition. Not a free ride, and not gang bangers.
The bigger point here is, and it is directly related to my issue and drives my opinions when we get into these topics, is that the gov needs to step back into it's place and allow the markets to do what they will.
So right now, banks won't loan money, businesses can't grow, employment is high, economy is flat-lined, and the government is supposed to do nothing but watch? No change in interest rates, no change in monetary policy, just sit there and stare at it? Just go to lunch with their favorite lobbyist and worry about the next election?
If that means fail than so be it. Don't reward poor operation of a business with more money. Enabling someone to fail is a way to squander, especially when you squander something that isn't even yours, so to speak
[I]Again, you are focusing on the failure. Focus on the success. If you make money available to a well performing business it will spur growth. And money is not available right now to well performing small business...no growth, no job creation![/I]
