# Bailout passes Senate 74-25 **URL:** \ **Category:** The BBQ Pit\ **Created:** [October 2, 2008, 6:34am UTC](https://boards.straightdope.com/t/bailout-passes-senate-74-25/466138 "2008-10-02T06:34:30Z")\ **Posts on this page:** 18\ **Page:** 3
**Author:** ![Marley23](https://avatars.discourse-cdn.com/v4/letter/m/45deac/32.png) [@Marley23](https://boards.straightdope.com/u/Marley23)\ **Post date:** [October 2, 2008, 7:10pm UTC](https://boards.straightdope.com/t/bailout-passes-senate-74-25/466138/41 "2008-10-02T19:10:43Z")
> [@Whack-a-Mole](#): > > Pumping money back into the cats at the top of the food chain. The investment banks and their ilk…essentially giving them the money back they lost on this mess. The idea as I understood it was that the cash infusion will keep banks from severely cutting back on loans or being succeptible to runs. There’s nothing trickle-down about that, it’s something with a direct effect on everybody else. ---
**Author:** ![elucidator](https://avatars.discourse-cdn.com/v4/letter/e/8edcca/32.png) [@elucidator](https://boards.straightdope.com/u/elucidator)\ **Post date:** [October 2, 2008, 7:12pm UTC](https://boards.straightdope.com/t/bailout-passes-senate-74-25/466138/42 "2008-10-02T19:12:43Z")
> [@Mollie\_Magill](#): > > …I actually like that one. (Mark the date - I agreed with the house republicans.)… The People’s Republic Party stands in firm solidarity with the working class against the running dog jackals of the Wall Street! ---
**Author:** ![Whack-a-Mole](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/whack-a-mole/32/141_2.png) [@Whack-a-Mole](https://boards.straightdope.com/u/Whack-a-Mole)\ **Post date:** [October 2, 2008, 7:16pm UTC](https://boards.straightdope.com/t/bailout-passes-senate-74-25/466138/43 "2008-10-02T19:16:52Z")
> [@Marley23](#): > > The idea as I understood it was that the cash infusion will keep banks from severely cutting back on loans or being succeptible to runs. There’s nothing trickle-down about that, it’s something with a direct effect on everybody else. Here…try this link: [Commentary: Bankruptcy, not bailout, is the right answer - CNN.com](http://www.cnn.com/2008/POLITICS/09/29/miron.bailout/index.html?iref=newssearch) Said better there than I can do. I would be interested in your comments on it. ---
**Author:** ![Sinaijon](https://avatars.discourse-cdn.com/v4/letter/s/dc4da7/32.png) [@Sinaijon](https://boards.straightdope.com/u/Sinaijon)\ **Post date:** [October 2, 2008, 7:30pm UTC](https://boards.straightdope.com/t/bailout-passes-senate-74-25/466138/44 "2008-10-02T19:30:21Z")
> [@Whack-a-Mole](#): > > Oh sure they did…they paid themselves off to get it done: > > **New Tax earmarks in Bailout bill**. Just a nitpick. There isn’t such a thing as a ‘Tax Earmark’. Those were tax breaks. An earmark is spending, a tax break reduces potential income. ---
**Author:** ![Typo\_Negative](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/typo_negative/32/484_2.png) [@Typo\_Negative](https://boards.straightdope.com/u/Typo_Negative)\ **Post date:** [October 2, 2008, 7:35pm UTC](https://boards.straightdope.com/t/bailout-passes-senate-74-25/466138/45 "2008-10-02T19:35:48Z")
> [@Mollie\_Magill](#): > > Businesses must have credit to pay their workers and to purchase inventory. That’s what the danger is right now. If businesses cannot get credit, then people will not get paid. Forgive my ignorance, but why is credit required to make payroll? Seems like if you’re paying workiers with borrowed money, you’re in a hole. ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [October 2, 2008, 7:51pm UTC](https://boards.straightdope.com/t/bailout-passes-senate-74-25/466138/46 "2008-10-02T19:51:18Z")
> [@spooje](#): > > Forgive my ignorance, but why is credit required to make payroll? Seems like if you’re paying workiers with borrowed money, you’re in a hole. Probably half or more of all the small businesses in the US are leveraged, either for the initial purchase or expansion/equipment/whatever. ---
**Author:** ![ivylass](https://avatars.discourse-cdn.com/v4/letter/i/9de053/32.png) [@ivylass](https://boards.straightdope.com/u/ivylass)\ **Post date:** [October 2, 2008, 7:51pm UTC](https://boards.straightdope.com/t/bailout-passes-senate-74-25/466138/47 "2008-10-02T19:51:35Z")
I think it has to do with line of credit…accounts receivable may take up to 60-90 days to come in, but your employees need to be paid every two weeks. Then, when the money comes in, you slam it on the LOC. Of course, if your AR is less than your AP, you’re screwed. It’s a matter of who needs to be paid vs when the money comes in. I think. ---
**Author:** ![Marley23](https://avatars.discourse-cdn.com/v4/letter/m/45deac/32.png) [@Marley23](https://boards.straightdope.com/u/Marley23)\ **Post date:** [October 2, 2008, 7:52pm UTC](https://boards.straightdope.com/t/bailout-passes-senate-74-25/466138/48 "2008-10-02T19:52:28Z")
> [@Whack-a-Mole](#): > > Said better there than I can do. I would be interested in your comments on it. I’ve wondered at times if a sterner response, like letting some lenders fail, might not prevent this kind of thing from happening again. But my comment was more about the analogy than the merits of the bailout itself - you’re not going to find me vigorously defending (or bashing) the bailout either way. ---
**Author:** ![Mollie\_Magill](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mollie_magill/32/20882_2.png) [@Mollie\_Magill](https://boards.straightdope.com/u/Mollie_Magill)\ **Post date:** [October 2, 2008, 8:06pm UTC](https://boards.straightdope.com/t/bailout-passes-senate-74-25/466138/49 "2008-10-02T20:06:26Z")
I knew if I waited, someone would explain it better than I could. I don’t want people to think I like this bailout. I don’t, but I can’t think if anything better right now. I feel like a member of the Planet Express crew when they were at the lost city of Atlanta. [QUOTE=Futurama] Professor Hubert Farnsworth: This is the perfect chance for Fry to try out my new anti-pressure pills. [opens a bottle and a giant pill falls out] Fry: I cant swallow that. Professor Hubert Farnsworth: Well, then good news. It’s a suppository. [/QUOTE] ---
**Author:** ![Whack-a-Mole](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/whack-a-mole/32/141_2.png) [@Whack-a-Mole](https://boards.straightdope.com/u/Whack-a-Mole)\ **Post date:** [October 2, 2008, 8:31pm UTC](https://boards.straightdope.com/t/bailout-passes-senate-74-25/466138/50 "2008-10-02T20:31:05Z")
> [@Marley23](#): > > I’ve wondered at times if a sterner response, like letting some lenders fail, might not prevent this kind of thing from happening again. But my comment was more about the analogy than the merits of the bailout itself - you’re not going to find me vigorously defending (or bashing) the bailout either way. Fair enough but I think the analogy stands. The government wants to pump in money at the top. This presumably will allow the banks to loan more money to people at the bottom…trickle-down. Except there is nothing beneficial about it to the people at the bottom. Sure they can keep going awhile but part of the problem is a massive consumer debt. A consumer debt that is now not backed up nearly as well as was pretended by consumer assets. In short the banks will minimize their losses and remain solvent or even profitable. People at the bottom are strapped with more debt than ever (they have lost a huge amount of equity). So who will the banks be loaning to? People stop buying (as already being witnessed dramatically in the car market), factories close, people buy less…looks like a recession to me. Hence I think the bottom-up approach is better…fix the people’s asset problems. Then they can feel able to continue. No doubt there will be a contraction in the economy but frankly it is needed. Times will be tight awhile but in the end I think we are left with a healthier economy. The placebo of the bailout will only mask the issues temporarily and let the rich get richer and screw everyone else. ---
**Author:** ![brazil84](https://avatars.discourse-cdn.com/v4/letter/b/8491ac/32.png) [@brazil84](https://boards.straightdope.com/u/brazil84)\ **Post date:** [October 2, 2008, 8:32pm UTC](https://boards.straightdope.com/t/bailout-passes-senate-74-25/466138/51 "2008-10-02T20:32:02Z")
> [@ivylass](#): > > I think it has to do with line of credit…accounts receivable may take up to 60-90 days to come in, but your employees need to be paid every two weeks. Then, when the money comes in, you slam it on the LOC. Of course, if your AR is less than your AP, you’re screwed. It’s a matter of who needs to be paid vs when the money comes in. > > I think. Yeah. In any business, there will be a mismatch between receipts and expenditures. You need to spend money to produce goods and/or services, but you generally don’t get paid for those goods or services until later. To close this gap, you need either a business line of credit or a decent amount of “working capital” i.e. cash lying around. Either that or suppliers who sell you stuff on credit. ---
**Author:** ![brazil84](https://avatars.discourse-cdn.com/v4/letter/b/8491ac/32.png) [@brazil84](https://boards.straightdope.com/u/brazil84)\ **Post date:** [October 2, 2008, 8:38pm UTC](https://boards.straightdope.com/t/bailout-passes-senate-74-25/466138/52 "2008-10-02T20:38:22Z")
> [@ivylass](#): > > I think it has to do with line of credit…accounts receivable may take up to 60-90 days to come in, but your employees need to be paid every two weeks. Then, when the money comes in, you slam it on the LOC. Of course, if your AR is less than your AP, you’re screwed. It’s a matter of who needs to be paid vs when the money comes in. > > I think. Yeah. In any business, there will be a mismatch between receipts and expenditures. You need to spend money to produce goods and/or services, but you generally don’t get paid for those goods or services until later. To close this gap, you need either a business line of credit or a decent amount of “working capital” i.e. cash lying around. Either that or suppliers who sell you stuff on credit. ---
**Author:** ![ivylass](https://avatars.discourse-cdn.com/v4/letter/i/9de053/32.png) [@ivylass](https://boards.straightdope.com/u/ivylass)\ **Post date:** [October 2, 2008, 11:25pm UTC](https://boards.straightdope.com/t/bailout-passes-senate-74-25/466138/53 "2008-10-02T23:25:15Z")
> [@Whack-a-Mole](#): > > People at the bottom are strapped with more debt than ever (they have lost a huge amount of equity). But if you’re not planning to sell your house, you should be fine. Eventually the market will come back and your equity will go back up again. We recently had our HELOC reduced. We still have more credit than what we owe, but since we’re not planning to use it, it just means we have more incentive to pay it off (which we are working on.) ---
**Author:** ![wmfellows](https://avatars.discourse-cdn.com/v4/letter/w/c2a13f/32.png) [@wmfellows](https://boards.straightdope.com/u/wmfellows)\ **Post date:** [October 2, 2008, 11:49pm UTC](https://boards.straightdope.com/t/bailout-passes-senate-74-25/466138/54 "2008-10-02T23:49:47Z")
> [@Whack-a-Mole](#): > > Fair enough but I think the analogy stands. > > The government wants to pump in money at the top. This presumably will allow the banks to loan more money to people at the bottom…trickle-down. > > Except there is nothing beneficial about it to the people at the bottom. Sure they can keep going awhile but part of the problem is a massive consumer debt. A consumer debt that is now not backed up nearly as well as was pretended by consumer assets. > > In short the banks will minimize their losses and remain solvent or even profitable. People at the bottom are strapped with more debt than ever (they have lost a huge amount of equity). So who will the banks be loaning to? People stop buying (as already being witnessed dramatically in the car market), factories close, people buy less…looks like a recession to me. > > Hence I think the bottom-up approach is better…fix the people’s asset problems. Then they can feel able to continue. > > No doubt there will be a contraction in the economy but frankly it is needed. Times will be tight awhile but in the end I think we are left with a healthier economy. The placebo of the bailout will only mask the issues temporarily and let the rich get richer and screw everyone else. What you’re talking about appears to be “keep the bubble(s)” inflated, and is entirely consumer focused. The immediate bank impact is on things like corporate lines of credit for working capital, not (normally) housing. Fixing housing assets when corporate lending is the core issue (e.g. major industrials are having trouble with short term cash) is frankly idiotic. ---
**Author:** ![Knorf](https://avatars.discourse-cdn.com/v4/letter/k/58956e/32.png) [@Knorf](https://boards.straightdope.com/u/Knorf)\ **Post date:** [October 3, 2008, 12:39am UTC](https://boards.straightdope.com/t/bailout-passes-senate-74-25/466138/55 "2008-10-03T00:39:45Z")
[The most recent Horsey cartoon](http://seattlepi.nwsource.com/dayart/20081003/cartoon20081003.jpg) on this subject is pretty hysterical. ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [October 3, 2008, 12:45am UTC](https://boards.straightdope.com/t/bailout-passes-senate-74-25/466138/56 "2008-10-03T00:45:13Z")
> [@Whack-a-Mole](#): > > Oh sure they did…they paid themselves off to get it done: > > **New Tax earmarks in Bailout bill** > > - Film and Television Productions (Sec. 502) > - Wooden Arrows designed for use by children (Sec. 503) > - 6 page package of earmarks for litigants in the 1989 Exxon Valdez incident, Alaska (Sec. 504) > > **Tax earmark “extenders” in the bailout bill.** > > - Virgin Island and Puerto Rican Rum (Section 308) > - American Samoa (Sec. 309) > - Mine Rescue Teams (Sec. 310) > - Mine Safety Equipment (Sec. 311) > - Domestic Production Activities in Puerto Rico (Sec. 312) > - Indian Tribes (Sec. 314, 315) > - Railroads (Sec. 316) > - Auto Racing Tracks (317) > - District of Columbia (Sec. 322) > - Wool Research (Sec. 325) > Just fucking WOW! These fucking pricks are using this disaster to STILL get earmarks for their pet projects. Fucking Rum, Wooden Arrows for kids(???), Race Tracks and WOOL FUCKING REASEARCH??? (Well ok on the Rum I guess…we’re gonna need it to get smashed out of our minds). > > Fuck them all and the horse they rode in on. > > Where is McCain with his Maverick bit about outing bullshit earmarks? He may not be president yet but he certainly is not putting his money where his mouth is. Obama voted for it too and deserves derision as well but he didn’t pound a podium about the earmark thing either. > > I really hate our government sometimes. …and that’s how a _bill_ becomes a _law_. ---
**Author:** ![Jaglavak](https://avatars.discourse-cdn.com/v4/letter/j/85f322/32.png) [@Jaglavak](https://boards.straightdope.com/u/Jaglavak)\ **Post date:** [October 3, 2008, 1:17am UTC](https://boards.straightdope.com/t/bailout-passes-senate-74-25/466138/57 "2008-10-03T01:17:26Z")
I, too, want the morons who made this happen to burn in hades. Or at least end up living under a shelled out Pinto in east St Louis. Unfortunately I have already lost about two year’s worth of 410k contributions with plenty more to come. I could have had a real good time with that money dammit! That kind of hit starts making a $10K tax bill look pretty reasonable - if it works. But why does the solution involve me eating some christless fat cat’s stupid mistakes? How 'bout this; have the Feds set up a commercial bank and make new loans with that $700 bil instead of paying retail for a bunch of worthless paper. If the bankers won’t do their jobs, wha-hey we’ll make loans to and from ourselves. Let the pinstriped Ponzi schemers sit on the sidelines and watch us make money til they can’t stand it anymore. Why wouldn’t that work? ---
**Author:** ![Tuckerfan](https://avatars.discourse-cdn.com/v4/letter/t/eada6e/32.png) [@Tuckerfan](https://boards.straightdope.com/u/Tuckerfan)\ **Post date:** [October 4, 2008, 10:58am UTC](https://boards.straightdope.com/t/bailout-passes-senate-74-25/466138/58 "2008-10-04T10:58:57Z")
> [@Muffin](#): > > Another victory for socialism. A pity we didn’t opt for the Chinese brand of socialism, at least then we’d have the pleasure of seeing a show trial, followed by the execution of the CEOs responsible for this shocking cockup. [Previous page](https://boards.straightdope.com/t/bailout-passes-senate-74-25/466138.md?page=2)