I make no claim of economic expertise, but knowing how the stock market appears to be looking at the prospect I’d say not authorizing the bailout would get very ugly very fast as confidence fell even in sound institutions.
The market isn’t necessarily rational. It’s a mistake to assume it is (not that anyone in this thread is making that mistake).
In which case, you’d have to make a decision on which is more easily and quickly correctable: market confidence or the damage that could result from implementing an ill-advised plan.
Having seen the market do handstands these past few days, I’m tempted to say that the former seems ahead in my mind by a country mile. And as you said, it can be irrational, in both directions. Then again, like you, I’m economics-ignorant.
My mortgage lender has made an ass load of money from me. Where is all of this money going? I don’t get the bailout at all. I’m maybe not all that bright but why do these companies need a 700 billion bailout?
The “invisible hand” of the free market will fix everything, no worries.
[absolutely has to go:
This prick, Paulson, wants us to hand him a check for $700B, and then wants us to agree that nothing he does with it can be subject to any kind of review or oversight at all? Are they out of their rabbit ass minds? This is a classic Bush administration powerplay tactic. Use a crisis to extract even more Executive autonomy. The next step is to accuse the Democrats of being unpatriotic terrorist lovers if they don’t capitulate. Well, not this time, Brojangles.
Incidentally, Paulson’s trustworthiness and credibility is not helped by the fact that he [url=http://thinkprogress.org/2008/09/23/paulson-oversight/]lied to Congress](]This part[/url) about the oversight clause this morning.
Hands up, how many people trust these cocksuckers (really, just one, unelected cocksucker) with $700B and total immunity from oversight or judicial review?
Nothing against cocksuckers as such, some of my best friends…
My trouble would be more like worrying that the same people who are wrong about the cause are likely to be wrong about the cure. The current regime is dominated by acolytes of the Holy Free Market. If anything goes right, it is because the HFM is operating normally, and expanding wealth for all of us lucky duckies. If something goes wrong, it is because the HFM has been interfered with. Or worse, regulated.
I do not share their faith. How, then, can I have any confidence that this massively expensive exercise in fiscal faith healing will be effective? How can we have any remotely intelligent opinion when we have no idea, none! about the underlying value of our purchases?
I am also very suspicious of the emergency pants-on-fire urgency. I’ve been reading about his problem brewing for years now, how the hell do you manage to get run over by a car traveling two miles per hour? So they must have known this was coming, and this must be a plan, not an improvised dash for the fire brigade buckets, but an actual plan, with an ultimate intent. I suspect they have thought this through, and this plan offers the maximum possible comfort to the investing class and their minions, and they are giving us the fire alarm treatment hoping to get it past us before we catch on.
And if I’m wrong and this is all an improvisation, then they are too stupid to make their own oatmeal, much less devise a solution to a monstrously complex problem on the spur of the moment. They should be planted in vermiculite, placed in a semi-shaded location and watered twice a week. I have some suggestions on that part.
Funny you should say that; from today’s press conference (near the bottom):
Minor hijack: Anyone find it a little funny that the most objectionable part of this is section eight?
You seem to be saying that the olny reason they are doing this is normal political BS. Do you think they should just sign off on it as written?
Does that not make you think that maybe they have a point?
I’m not saying that some are not trying to milk this but there are very real issues here.
I say we finance this bailout with a special excise tax: we, all of us, pay two months of our mortgage payments directly to Uncle Sam, getting full credit for those payments from our respective lenders.
Certainly…how much damage are you willing to put up with while it works itself out? If we leave things alone I’m fairly certain that eventually things will stabilize. Would most likely take years of course, and a lot of really bad things would happen, but yeah…it would right itself.
I’m guessing that, despite my OP and my request to try and stay on track that this, like all the other threads on this situation, is simply a platform for folks to rant about the situation in an uninformed way and make snide remarks about how it was all the evil capitalists fault and why should we bail them out, blah blah blah. The fact that I’m not asking for responses along those lines seems to be beside the point. For all of you who are saying that we should not bail out anyone, what will the EFFECT be, do you suppose? THAT is the question I’m actually asking here. No bailout…what happens next?
I realize this is going to take a stretch both in setting aside the partisan rantage AND in working the old crystal ball to speculate on what MIGHT happen…or what the individual posters in this thread, assuming they can tear themselves away from the various hijacks THINK might happen. But I ask again…could we focus on the question I’m actually asking here? Please?
Thanks in advance for all your support.
-XT
Honestly, my assumption is that both will cause the same amount of bad stuff, just one will be a sudden bad followed by a period of recovery and the other will be a gradual bad and a more gradual recovery.
Are you a band-aid puller-offer or a band-aid teaser-offer? 
Last week Paulson said the fundamentals of the economy were sound. How did he get so smart in a week. He and Bernake have constantly assured us all is well. Now with a couple months left in the Bush admin they instantly require a billion dollar going away present. They will save the economy for us. I an skeptical. He and his cohorts made billions. If the country is in peril ,they should be glad to get a few of his looter friends to pony up to pay the first few months of the grand scheme.
The plan sucks. they want to give the money to financial institutions. How does that help. The money should go into re-mortgaging homes to get payments coming in. He wants to beyond the reach of courts,or government agencies and his deeds are non-reviewable. Why does he need that if he is trying to do good work? Something stinks.
I think he is lying. He wants incredible power granted to an unelected official. Paulson plan does not help the home owners. It is designed to save financial institutions that already looted us out of billions. He even wants the authority to bail out foreign financial companies.
Did the S&L bailout bring us any closer to socialism?
It turned me pink.
It could have been the sun, but I prefer to think it was the socialism.
Dereg is part of what caused the problem. Now they want a trillion dollars with ZERO regulation. It sucks.
Didn’t you just answer your own question:
(BTW, there is no guarantee that it will “right itself”. It may stabilize, but the equilibrium point may be something far worse than what we are used to)
Good grief. I ASKED the question in the first place…if all I was interested was in my own answer to it I would have spared myself the trouble. 
Besides, even if I’m right (and I think that, in general I am), it leaves out all the stuff that happens in the middle that I’m interested in. Ok…so, folks decide to let the evil corporations deal with things themselves and sink or swim. Years later we stagger out of (what? Another Great Depression?) and start to rebuild. What happens in the mean time?
-XT
I am prepared to head down this slippery slope. It’s time to separate the chaff from the wheat.
I think the main consequence of no bailout would be much tighter lending until a certain level of profitability resumed, but I honestly think this country could use a little break from borrowing money. Our approach to finance is unhealthy.
If this would only reduce consumer borrowing, I’d be with you. However it is also reducing business borrowing for expansion, which is not healthy. I haven’t heard of any problems with either excessive debt or bad debt in this area.
