world

Obama throws $75 billion lifeline to homeowners

88 Comments

The requested article has expired, and is no longer available. Any related articles, and user comments are shown below.

© Copyright 2009 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

©2021 GPlusMedia Inc.

88 Comments
Login to comment

God speed, Mr. Obama.

0 ( +0 / -0 )

why such a relief plan just for home owners who either should not hve bought a house to begin with or ones who didn't bother saving for a rainy day and bought svu's, high end DVD players and furniture....

How about relief for people who have gone broke due to the high cost of a child's operation? Or how about medical professionals who are still paying off their student loans? I can keep on going with a lot of people who deserve being bailed out before irresponsible borrowers.

0 ( +0 / -0 )

skip: "why such a relief plan just for home owners who either should not hve bought a house to begin with or ones who didn't bother saving for a rainy day and bought svu's, high end DVD players and furniture...."

I agree with you on the overall lack of responsibility being similar, but the results of saving someone their home and saving someone their blueray player are not the same; meaning that a homeless person is going to cost the economy more in the end than a person who can't watch the latest DVDs in the best format.

0 ( +0 / -0 )

It must be shocking for some Republicans/conservatives to see for pretty much the first time since 2000 a president who actually gives a damn about Americans and who is actually - write this down if you need to - willing to spend money on Americans rather than on foreigners.

Skip, I hear you. But where do you (the govt.) stop???

If the Govt. sits on its hands (as Sailwind appears to want it to do), then Obama will not, in my humble opinion, be executing leadership.

A true leader does not do nothing.

0 ( +0 / -0 )

Money must be growing on a tree behind the White House.

0 ( +0 / -0 )

Wolfpack - That's been GOP Financial Theory 101 for years. :-)

0 ( +0 / -0 )

a homeless person is going to cost the economy more" How's that?

0 ( +0 / -0 )

So how much is this exactly? Three European and one American news websites are quoting $275 billion, not $75 billion. Has 'Japan Today' made a serious typo here?

0 ( +0 / -0 )

SushiSake:

" "It must be shocking for some Republicans/conservatives to see for pretty much the first time since 2000 a president who actually gives a damn about Americans and who is actually - write this down if you need to - willing to spend money on Americans rather than on foreigners." "

"Willing to spend money" -- sure, but whose money?? The government does not have a pot of gold under the White House lawn. They have two ways of producing all this mountain of cash that the Democratic government is now doling out (and with a special eye to their friends):

1 - taxation (e.g. taking from everyone, including you)

2 - bororrowing it, adding to the huge existing debt (hi, China), and

3 - simply printing it (the Robert Mugabe School of Economics)

No. 2 and 3 come out the the same eventually, because taxpayers will eventually bear the cost of debt and inflation.

So, which do you prefer?

0 ( +0 / -0 )

WilliB. My question is: is there any real money left?

I mean, bankrupt America is borring from bankrupt Japan.

Call me slow but I'm wondering - not to mention seriously doubting - whether the global economy is actually running on real money.

My guess is it is running off IOUs.

Your thoughts?

0 ( +0 / -0 )

skip: "How's that?"

Ever hear of welfare programs?

0 ( +0 / -0 )

skip: I mean social welfare programs, as well as finding housing, etc.

0 ( +0 / -0 )

why such a relief plan just for home owners who either should not hve bought a house to begin with

Falling house prices affect the value of everybody's house. They don't care if the borrower was responsible or irresponsible.

0 ( +0 / -0 )

Turning around housing market like these types of financial tools is much better than leaving action to the banks. Perhaps many world leaders did not have such previous rich experience of ordinary community life and ordinary citizens' issues than Mr.Obama.

0 ( +0 / -0 )

Still smells like people's background feeling is that the price level from which things have fallen is the correct one and should be preserved. Is that really right? Inflated asset prices from a credit bubble are going to get a macro correction from the market. That's inevitable. At the micro level, the correction is going to cause some pain and unfairness, so trying to find a soft landing is nice if it can be done.

But at the same time, don't overlook the great benefit to Main Street's lower- and middle-income people who couldn't afford to buy the home they wanted due to bubble prices, or else, who did the math and judged it too risky to buy? Now that prices are falling to lower levels, these people will soon be able to get out of rentals or cheaper homes, and afford an upgrade. This kind of natural market effect is more powerful and beneficial than govt. programs that throw a few billion of taxpayer money at things amid political posturing to "protect" value. Can you really "lose" what you didn't really have? It's called mere speculation in other fields.

I say, let it burn and reset the system. I used a real estate website to check on a nice house near where I grew up (metro Detroit area). In 2001, a house sold for $375,000. Now the same house is for sale and here is what the seller writes: "Priced at $1.2 million, reduced to $785,000 for quick sale, hurry!"

Give me a break. How did this place move from $375k to $1.2M, or even $785k, in just a few years? Did they bury gold bars in the backyard or paper the walls with money? Not everyone is from Detroit (thank goodness!) but there are legions of people like me who were priced out of their hometowns by this ridiculous credit bubble. I have a decent income and a professional job, but I used to look at the high and climbing prices all over S.E. Michigan and wonder how in the world I could ever afford a house. I actually thought maybe there was something wrong with me. Now I realize, tons of other people must have looked at the same, or even worse, math and risks that I saw, and said "OK, I'LL BUY THAT $800,000 HOME WITH ZERO DOWN!! And then they drove to the closing in their brand-new leased Ford Expedition and headed off to get that 45" plasma TV.

Now we are moving back to where a large mass of people can actually enter the market as responsible buyers and get things moving again. Why delay that? Propping up values artificially is just another distortion and it doesn't work. Look at Japan's "lost decade" after their bubble burst.

0 ( +0 / -0 )

Oh my! A leader who is helping people in the country... imagine! Well, I should qualify that; imagine a leader who helps people BESIDES the top 1% super-rich.

Good job, Obama. Once again, you prove you were the correct choice -- it's just a shame it came so late.

0 ( +0 / -0 )

Skip, health care reform is tops or near the top of the list of what practically American wants. But getting it done in Washington is practically impossible. Obama want to get Kansas Governor Sebelius for Health Sec'y.. she has a good record of working with Republicans, although that skill doesn't seem too important to me since the party of Eric Cantor and rash limbo is refusing to cooperate at any cost.

0 ( +0 / -0 )

Obama 1 US Taxpayers 0

The fleecing of America continues.

0 ( +0 / -0 )

All of us are paying a price for this home mortgage crisis

I'm sure Obama and his friends are not included in the "all"

0 ( +0 / -0 )

badmigraine (is there a good one?)

Good summary of what ordinary people were faced with: either drink the housing bubble koolaid or go elsewhere. And the kick to the ego too ... the expectation was finish school, get a job, buy a house (or a version of that) ... we all grew up with that, everyone was primed since childhood to buy and the markets took advantage.

0 ( +0 / -0 )

Good job, Obama. Once again, you prove you were the correct choice -- it's just a shame it came so late.

Thats so funny..........

0 ( +0 / -0 )

Let's see, gov't doesn't "make" any money. It takes other peoples money and redistributes it in the form of taxes. So NObama is gonna take somebodys trillion dollars and give it to those that got themselves in financial trouble...... wow, that sounds like a plan to me.

Moderator: Please do not use meaningless words like "NObama." They lower the level of discussion and reflect badly on yourself.

0 ( +0 / -0 )

So Obama is gonna take somebodys trillion dollars and give it to those that got themselves in financial trouble.

Um, no he's not. Basically his plan is to provide incentives for banks to modify loans so that the current occupants can remain in them. For that the banks will be rewarded. Yeah, it's gonna offer relief to some people who flipped homes in a speculative frenzy that helped drive prices up as well as those who bought McMansions they couldn't afford. But it will also stabilize the market for those who "played by the rules."

Having looked at real estate and studied the local market in my area, it's clear a lot of homeowners are "underwater," meaning they owe more, perhaps twice as much, as the current market value of the property.

Without corrective action, the floor price of homes could continue to fall and perhaps even go into a free fall. That would wipe out the economy and would not be in anyone's interest. (Full disclosure: As a new homeowner I hope we've hit bottom!)

Both the bank and the owner are cutting their losses in a "short sell." Though the buyer is getting a bargain, without an upswing in the economy, which would stabilize the market, it's not worth much.

0 ( +0 / -0 )

The other thing is, if you are "underwater" and you can't meet your mortgage payments, or even if you can, there's an incentive to just walk away and move in with family or make rental arrangements.

Your credit already ruined so that's not a consideration. In my community homes have been abandoned in this manner. A family of bob cats moved into one while the city government tried to figure out who had the responsibility to remove them (the SPCA only handles domestic animals). Obviously the community would not be able to cope if too many were abandoned in this fashion. And it would drive down the value of everyone else's property.

0 ( +0 / -0 )

modify loans so that the current occupants can remain in them.

Ummm, that is the root cause of the problem, see Clinton and the dems housing acts of the 90's.

0 ( +0 / -0 )

betzee, you summarized the problem well but have left out a critical item. Obama's little scheme is mostly designed to assist people who are already failing to pay their mortgage. It does little to nothing for those homeowners still paying their mortgages dutifully even though the value of the house is fair below the amount of the loan. All Obama is going to do is encourage more people to default on loans in order to qualify for government assistance. This unintended consequence will push the initial billions into the hundreds of billions. At some point market forces are going to be needed to prevail before we borrow ourselves out of existence. If anybody has small kids in the house, you are looking at who is going to get stuck paying for all of this spending.

0 ( +0 / -0 )

This will help many people save their homes alright. But the biggest house savings actions needed is jobs. Sure this will help those who need help right now and gives guides lnes and hows to save homes in the future.

Those people who have lost their jobs already and lost their homes, it's too late.

So this is bill will help many people and I really don't disparage that, but we need jobs.

The only thing that will create jobs currently is the stimulus plan.

Obama has made some bold moves. Good for him. < :-)

0 ( +0 / -0 )

dream:

" The only thing that will create jobs currently is the stimulus plan. "

"Stimulus" plan? You mean using money that you don´t have to fund projects that you don´t need?

I admit it is a stroke of PR genius to re-label government pork spending as "stimulus". But renaming it does not change what it is.

0 ( +0 / -0 )

WilliB I guess we'll see in a year how well it does. I'm for the stimulus and mortages packages, both. < :-)

0 ( +0 / -0 )

midnight:

" If you want to know what caused this mess, see ACORN "

ACORN, by the way receives 2 Billion dollars in this "stimulus plan". Borrowing 2 billion Dollars from the Chinese and handing it to a Democrat party political activist group --- that sure will "stimulate" the economy. Brilliant!

0 ( +0 / -0 )

midnightpromise: "Let's see, gov't doesn't "make" any money."

Anyway, you seem to think what I've quoted above is limited to the current government. Clinton was the last president to 'make' the government some money. Your most recent former president blew away that surplus and sent the economy into the freefall Obama is trying to stop.

"So Obama is gonna take somebodys trillion dollars and give it to those that got themselves in financial trouble...... wow, that sounds like a plan to me."

Again, this is much more what your previous president did than what Obama is doing.

I see your obsession with ACORN is back with your new handle, too. 'Tis a shame. It's also a shame you still clearly don't know what 'socialism' means.

WilliB: "You mean using money that you don´t have to fund projects that you don´t need?"

See above comments on previous president, then add 'Iraq' to what you are quoted as saying.

0 ( +0 / -0 )

smith:

" See above comments on previous president, then add 'Iraq' to what you are quoted as saying. "

Obama has blown more money on his current "stimulus" pork plan than the ENTIRE ACCUMULATED IRAQ WAR of the past 8 years cost. And that 1 month into the office.

Get some perspective.

0 ( +0 / -0 )

WilliB - "Obama has blown more money on his current "stimulus" pork plan than the ENTIRE ACCUMULATED IRAQ WAR of the past 8 years cost. And that 1 month into the office."

That's flat wrong, an outright distortion and I challenge you to prove it. However, I do admit you are obviously not very good at mathematics. :-)

0 ( +0 / -0 )

Shame, shame, shame. Here we have a new US president who has hardly got his foot in the door and he is helping common, rank and file Americans. What is the world coming too? Experience and time has shown that if you give the rich people more and more and industry leaders multi millions in bonuses then it trickle downs and everyone gets richer. What is wrong with this man?

0 ( +0 / -0 )

The bailout is more than Iraq in terms of dollars today. If I were a political hack I'd be hammering that point home. But I'm not a political hack so I haven't been hammering that point home.

In the long run there is a chance to recoup a lot of the cost of the packages that went to banks since the government now owns stocks in them. If the value of the stocks rise they could even see a profit on some of the bailout depending on how things play out. The media doesn't really talk about that enough; it's presented as a cost and left at that.

0 ( +0 / -0 )

skip: I mean social welfare programs, as well as finding housing, etc." smitty, so how does a mortgage bailout help homeless people? Most shelters I know of run on donated money.

Look, my opinion doesn't matter here, its going through whether I like it or not. However, there is so many other areas of importance that should be much higher on the totem pole, if "we have a new US president who has hardly got his foot in the door and he is helping common, rank and file Americans."!

0 ( +0 / -0 )

WilliB: "Obama has blown more money on his current "stimulus" pork plan than the ENTIRE ACCUMULATED IRAQ WAR of the past 8 years cost. And that 1 month into the office."

Let's see.... ummmm.... $787 million that's going to be released soon (you did say 'in one month')... and the Iraq War which has gone into more than $2 trillion, with a total of more than $4 trillion defecit under bush....

As Sushi said, you are terrible with math.

0 ( +0 / -0 )

skip: "smitty, so how does a mortgage bailout help homeless people? Most shelters I know of run on donated money."

You asked why people who took out a loan to buy a house should be bailed out as opposed to someone who bought a car or stereo. I said right away that while both spent beyond their means and are perhaps equal in how irresponsible they are, only the former is going to be homeless if what they 'bought' with the loan is taken away.

Personally I would rather see BOTH quite simply told, "Why the heck would you take out a loan you cannot repay??" while their stuff was taken away, but in the end, as I said, the former need to be helped out before the latter because having a bunch more homeless would hurt the economy more than having people without stereos.

That clear things up a bit? Again, neither should really be helped out, but if you have to choose one over the other, as wrong as it may seem, it's got to be the people who will lose their houses otherwise first.

0 ( +0 / -0 )

smithinjapan: Let's see.... ummmm.... $787 million that's going to be released soon (you did say 'in one month')... and the Iraq War which has gone into more than $2 trillion, with a total of more than $4 trillion defecit under bush....

From CBSnews.com:

"All told, CRS says, Congress has approved $864 billion for the overseas wars and other programs related to the battle against terrorism since Sept. 11, 2001. Such funding includes military operations, base security, reconstruction, foreign aid, embassy costs and veterans' health care."

http://www.cbsnews.com/stories/2009/01/07/terror/main4704018.shtml

That includes both Iraq and Afghanistan. Can you provide sources on your $2 trillion dollar number for Iraq?

0 ( +0 / -0 )

SuperLib: "The bailout is more than Iraq in terms of dollars today."

How so? I mean, even when you look at the ENTIRE stimulus package that Obama will sign over time (and some of you guys pointed out on the first day that it is 'not so much of a stimulus package, since we're only going to see a tenth of it now', etc.) it's still less than the $2 trillion or so...

Anyway, I agree with wanting to see more on the banks. In regular media I've read about the US possibly nationalizing the banks and even that it might be an advantage in a number of ways, but I haven't seen much if any of that here.

0 ( +0 / -0 )

SuperLib: Ah, yes, the Congressional Report... which also states in it's pages that even if things are reduced substantially costs will be up to $1.7 trillion -- or NEARLY $2 trillion? And are you seriously going to say that WilliB was right that if you add what's ALREADY been spent in total with Iraq with what bush spent in total the stimulus package beats it?

C'mon, boys and girls...

Finally, one last question. Tell me how much of that money for Iraq was invested in the US, vs. how much is being put into the US under Obama's stimulus.

0 ( +0 / -0 )

I guess that's not technically a question.

0 ( +0 / -0 )

Interesting. People can get through a whole debate with no facts.

I repeat my question. If this a $75 billion package or a $275 billion package?

0 ( +0 / -0 )

It's 75 Billion directed at the foreclosures. Not 275B.

0 ( +0 / -0 )

Obama has blown more money on his current "stimulus" pork plan than the ENTIRE ACCUMULATED IRAQ WAR of the past 8 years cost.

This is not true. Careful, thorough analysis by Nobel economist Joseph Stiglitz and others but the real cost of the Iraq-Afghanistan adventure at close to $3 trillion and counting. For example, most people do not factor in the ongoing costs of health care for the many wounded veterans.

Besides, you can't go out and fight many wars when your economy is flat on its back.

0 ( +0 / -0 )

While the cost of Iraq-Afghanistan might initially appear to be off-topic, it was brought up as a way to contrast the costs of the lifeline to homeowners and other parts of the total plan to get the US economy off of life support. A link supporting the costs follows:

http://www.timesonline.co.uk/tol/comment/columnists/guest_contributors/article3419840.ece

Arguing costs has been a staple of both ends of the political spectrum in the US for quite some time now. Can we forget the Republican economist (Larry Lindsey) who was essentially fired back in 2002 for saying that he thought the costs of Iraq were going to reach $200 million? And the other Republican predictors who said that, because of oil, the Iraq War would pay for itself? Did we forget that?

Likewise, these same Republican soothsayers have told us that massive tax cuts of 2001 would send the economy into high gear and create prosperity for the vast majority of Americans. They didn't. In a similar vein, whenever something is enacted that goes against Republican ideology, like the 1993 tax increases, they forecast gloom and doom -- which never happened as they predicted.

So, putting this back into the current perspective, when we read of Republican predictions about this bailout package, know that the predictions are based on politics and ideology, and which have come out wrong time after time after time.

0 ( +0 / -0 )

Oh, here is the breakdown:

"It could ultimately cost taxpayers as much as $275 billion — $75 billion in direct spending to keep people in their homes and the rest in additional financial backing for the government-controlled mortgage giants." (From the NY Times)

0 ( +0 / -0 )

"It could ultimately cost taxpayers as much as $275 billion"

$275 billion? Pffft! This is gonna end up costing the taxpayers over a trillion. And get ready for some serious inflation, the likes of which we haven't seen since the Jimmy Carter years, LOL!

0 ( +0 / -0 )

Sarge - "$275 billion? Pffft! This is gonna end up costing the taxpayers over a trillion. And get ready for some serious inflation, the likes of which we haven't seen since the Jimmy Carter years, LOL!"

RMAO!!! Your comment is hilarious because your 2 votes for the previous president along with those of many other misguided countryfolk of yours are the key reasons your country is screwed.

It would be even funnier if it wasn't so damn ironic... :-)

0 ( +0 / -0 )

SushiorSake - You still don't understand the causes of the financial mess.

0 ( +0 / -0 )

Sarge, you're telling me you do?

0 ( +0 / -0 )

Thanks for clarifying your vantage point sushisake3

"Your comment is hilarious because your 2 votes for the previous president along with those of many other misguided countryfolk of yours are the key reasons your country is screwed."

"Your countryfolk" ? "Your country is screwed" ?

You mean to tell me "you" are not an American ? But you rant and carry on like some kind of "expert" on the people of the USA. Umm folks... feel free to ignore this poster... he knows not of what he speaks. Just another tabloid readin boob tube watchin Jerry Springer worship monkey ! Out!

0 ( +0 / -0 )

betzee, you summarized the problem well but have left out a critical item. Obama's little scheme is mostly designed to assist people who are already failing to pay their mortgage. It does little to nothing for those homeowners still paying their mortgages dutifully even though the value of the house is fair below the amount of the loan. All Obama is going to do is encourage more people to default on loans in order to qualify for government assistance. This unintended consequence will push the initial billions into the hundreds of billions. At some point market forces are going to be needed to prevail before we borrow ourselves out of existence. If anybody has small kids in the house, you are looking at who is going to get stuck paying for all of this spending.

They are already on the hook for the five trillion GWB blew through. As someone said, when he asked for that first USD 87 billion for the Iraq War in September 2003 he should have made his announcement before Americans under ten went to bed because it would be coming out of their pockets. Where was your voice of concern then?

It's estimated his tax cuts cost them two trillion yet his stewardship ushered in the worst economic crisis since the Depression. One can apportion blame to a number of different individuals though most, like Phil("Americans never had it so good") Gramm, are denying responsibility. But it's indisputable that GWB's much touted "booming economy" which included 52 months of continuous growth was a bubble.

Many conservatives seem to think in the absence of this legislation housing prices will settle at "what they should be" and those who bought at the peak, whether there are making payments or not, will have to take the loss. We can count on the market to magically supply the appropriate floor price. But what if prices continue to plunge owing to a weak economy? We can get into a downward spiral here and that will take everyone down with it.

0 ( +0 / -0 )

This country has wasted $Billions of dollars starting and fighting a war of choice and not a war of neccessity.

We gave $Billions of dollars away to the richest people in the country to send jobs over seas.

george bush gave away $4Trillion in one swift signature to the richest 1% of the population.

Now we need to put up $75Billion to help middle Americans. We need to help the people who have suffered as a result of the above actions. We need to help sustain American's assets before we go deeper into resession.

I'm glad that Obama has the helm now. I'm glad that somebody is looking after middle America for a change. Yes we can. < :-)

0 ( +0 / -0 )

"I'm glad that Obama has the helm now"

Yeh, he's only spent 700 billion plus in his first month in office, and for what ? According to those that have read the stimulus package... millions for "mice" !!!

Get over yer obsession with Bush folks. No he didn't rank as Americas worst pres in the latest poll by US historians either... not even close, and you watch, as Iraq settles into a full fledged democracy... Bush's ranking will rise. In the meantime.... "millions for mice" !

0 ( +0 / -0 )

Hey stiffdrink... we disagree.

I support Barack Obama and his "millions for mice" as you like to call it. Those mice you disrespect there are my neighbors across the street or across town.

These mice, as you like to charaterize them, had jobs and meaningful employment until their jobs were sent overseas. Until their factories and shops closed their doors because they can't stay open due to the recession. Jobs that, your mice, used to pay the bills and put their children through college. Jobs that they used to have that allowed them to save for the future and retirement.

Millions of jobs. Not just a few here and a few there. Millions of positions that were send overseas and the people that moved these jobs overseas were given $Billion in tax breaks to send these jobs away from Americans.

Pssst...george bush made the tax breaks and credits available to send these jobs overseas. I'm not going to get over george bush until long after the effects of his administration have been cleaned up.

stiff drink, I support helping America first. You can believe anything you like. But right now, my side is in control. Until he's pushed out, I support Obama's efforts. < :-)

0 ( +0 / -0 )

"Millions of jobs. Not just a few here and a few there. Millions of positions that were send overseas and the people that moved these jobs overseas were given $Billion in tax breaks to send these jobs away from Americans."

You've failed to address those nations like Japan, China, Korea, Germany et al that continue to flood US markets with cheap affordable goods while not allowing access to their markets in return... a trend that has been going on well before the Bush administration. You go ahead and support Obama all you want... I would like to get the hell out of depressing "Japain" but I see no opportunity for work anytime soon in the states. Obama is screwing up, increasing the size of government ! That has never worked, and it won't work now. The US did not break the world economy... but it will be our job to save it.

0 ( +0 / -0 )

The audience in Phoenix greeted President Obama's point about requiring financial institutions who received government aid to adhere to government loan modification guidelines with sustained applause.

The mortgage industry "bought" Congressional exemption from Chapter 11 provisions in which a judge can modify "the settlement" any way he likes. Aren't the banks who lent someone making 30 grand a year the money to buy a 700k home also liable?

0 ( +0 / -0 )

stiffdrink: "et over yer obsession with Bush folks. No he didn't rank as Americas worst pres in the latest poll by US historians either... not even close..."

I'd say 7th from the bottom is pretty darn close, especially considering he DID rank the worst in terms of the ECONOMY and international affairs (did you catch that economy part?).

Hey, at least Obama is spending on you and your country. Bush blew far more than Obama will with the stimulus package, and bush blew it on Iraq, which Americans will see nothing from it but increased debt due to supporting the widows of young people sent to die, and by the vets who returned home and end up receiving health care (probably mental) and disability.

But hey... it's nice to see you are really more for a president who throws your money away across the world than putting it into restoring your nation BECAUSE bush threw it away.

0 ( +0 / -0 )

This bailout is really a populist method to send money to the banks for their toxic paper. The people who couldn't afford the mortages in the first place are going to own their houses courtesy of the people who actually can afford to pay. The banking "geniuses" will get their money too. Brilliantly socialist!

BTW, Bush didn't get the ball rolling on this crisis, that goes all the way back to Carter. Clinton and Bush W are also involved, but you can't pin this on solely on W. In fact, what we are about to find out (the hard way) is how little real impact a president has on the economy. In other words, I'm willing to bet that the bailouts are not going to work with respect to fixing the economy. They don't get to the root cause of the problem, which is personal indebtedness of most American households. About the only thing the bailout(s) will do is put the government deep into debt. If they print money to get out the result will be hyperinflation. Better hope the Chinese keep buying US T-bills or things are going to get a LOT worse.

0 ( +0 / -0 )

ca1ic0cat - Your 3:08 AM post hit the nail on the head.

0 ( +0 / -0 )

The stock market continues to react negatively to President Obama's bailout, taking yet another tumble...

0 ( +0 / -0 )

Sage: Listen son. All this crash started on Bush's watch. Nothink to do with Obama, mark my words. Obama are trying his best to help the average person , not them rich elite and make America fairer for everyone.

0 ( +0 / -0 )

Better hope the Chinese keep buying US T-bills or things are going to get a LOT worse.

That's literally what is meant by "Buy American". No wonder Hilary made her first overseas trip to Asia (Japan/China)

Most banks, in principal, would rather modify the payment rather than go through with foreclosure and even more so when the loan amount exceeds the appraisal value. So I don't know why government has get involved in this. I say let the real estate market correct itself.

0 ( +0 / -0 )

Sorry smith but Obama has spent more in his first month than Bush did for all of Iraq to date. It's just the way it is.

0 ( +0 / -0 )

I'm curious to see what the government is going to do about credit card interest rates. The rate on my card just went from 7.99% to 19.99% even tho I've never been late, never missed a payment, and have zero blemishes on my credit rating. If I miss a payment my rate jumps to 29.99%. From what I've been reading others have had similar increases.

The banks, after throwing billions down the toilet in real estate, are looking to recover their losses not only from taxpayers through the bailout but taxpayers through outrageous interest rates.

0 ( +0 / -0 )

SuperLib here's the new credit card rules. These were done on bush's watch. < :-)

http://blogs.consumerreports.org/money/2008/12/credit-card-rul.html.

0 ( +0 / -0 )

The people who couldn't afford the mortages in the first place are going to own their houses courtesy of the people who actually can afford to pay.

I completely agree. Those losers whose mortgages are underwater should have their sorry butts kicked around the block! Didn't their parents teach 'em you gotta earn it before you spend it? Well, they only had to look at Uncle Sam for an example of financial rectitude. What???? You scrimped and saved and bought even though everything was wildly overpriced thanks to our booming economy which meant the price could only go higher? Who was to have known it was a house of cards? I don't want to hear it, glug, glug, glug pal....

But why stop there? I'm tired of wasting emergency rescue funds to send paramedic crews out to save those who've have car accidents because they were yammering on a cell phone when they shouda been payin' attention to the road. They've been told and they should have known. And I think the fire department needn't bother racing off to douse the flames of any home where someone left a cigarette burning or forgot to blow out a candle. I mean how dumb can ya get?

This would all be a great savings to taxpayers like me who've never made a mistake, an error in judgment or rolled the dice at all. Nope, never, ever, ever and I'm getting tired of bailing out those who have cuz I know I will never need any of these services and so I sure don't wanna underwrite 'em for anybody else!

0 ( +0 / -0 )

It seems some are unaware that the money for this "lifeline to homeowners" is coming out of the USD 700 billion financial industry bailout passed by Congress last fall at the urging of GWB.

So, if you didn't criticize that bail-out, and you know who you are, how would you prefer these funds be spent?

It seems there's an awful of mindless crabbing from the Right. Obama was criticized for not attacking the mortgage crisis first and then when he unveils a plan, wonders never cease, you don't like it. Since you don't want any homeowner bail-out at all, you should have expressed approval for his initial lack of action.

0 ( +0 / -0 )

It seems there's an awful of mindless crabbing from the Right.

About the most accurate description of the situation I have heard yet. Its not about facts or details, its about whining for the sake of being heard. Mindless. Childish. Useless to all but the self.

0 ( +0 / -0 )

SuperLib: "Sorry smith but Obama has spent more in his first month than Bush did for all of Iraq to date. It's just the way it is."

You're wrong. As Yabits rightly pointed out, the costs in the Congressional Report do not include the costs of treatment to vets., etc. I doubt they include even the money spent to ensure that photos of the caskets coming home are not put into the media. So, I'm sorry, son, but it appears you are mistaken. What's more, you never answered my question: what's the difference between spending all that money (more than Obama so far) on Iraq and nothing into the US (save for the vets that were screwed up over there, or for the widows), and Obama putting it into the US? DOH! I just gave it away... sorry..

You also never answered my question if you agree with WilliB that Obama has spent more in a month than bush in his entire years INCLUDING Iraq? Those were his claims, and he was rather adamant about it. Care to clarify? or are you just going to ignore the questions again and simply deny them with 'that's the way it is'?

0 ( +0 / -0 )

daydream: SuperLib here's the new credit card rules. These were done on bush's watch.

Hey I lost 20 lbs. on Bush's watch. It wasn't all bad.

0 ( +0 / -0 )

Smith: As Yabits rightly pointed out, the costs in the Congressional Report do not include the costs of treatment to vets., etc.

""All told, CRS says, Congress has approved $864 billion for the overseas wars and other programs related to the battle against terrorism since Sept. 11, 2001. Such funding includes military operations, base security, reconstruction, foreign aid, embassy costs and veterans' health care."

Again, that's for all programs/wars, not just Iraq.

smithinjapan: What's more, you never answered my question: what's the difference between spending all that money

Why would I want to get caught up in that debate? I'm just here to compare the cost of both which is the point I was answering. Like I said, it is what it is. Do you hear me criticizing Obama at all on the spending?

0 ( +0 / -0 )

Such funding includes military operations, base security, reconstruction, foreign aid, embassy costs and veterans' health care."

Veterans' health care is, like, an ongoing expense which can be projected. Some of those with injuries which would have killed them in previous wars are living, thanks to the miracles of modern medicine, but it may be a life which requires round the clock care since there's only so much medicine can do for the severely injured.

By contrast, the financial bail-out is not envisioned as a permanent item in the budget.

0 ( +0 / -0 )

He was comparing money spent so far, not future costs.

0 ( +0 / -0 )

Yeah, let's just allow the people who bought homes and had been supporting their families for 15/20 years, and george bush signs bills that paid corporations to send their jobs over to China and India, to fail and watch their homes go into foreclosure.

Let's just allow those homes to sit on the market and watch the housing market to sink even deeper.

The rich have the right to have their 2nd, 3rd and.... home loans reworked by the courts, but if you're poor and have only one home, the courts can't help single home owners.

If we can't help middle America, then why should we help the rich and infamous? < :-)

0 ( +0 / -0 )

SuperLib: "He was comparing money spent so far, not future costs."

Actually, if you read the comment I made last night about the report you cited, you'll see that included projected costs to be up to $1.7 trillion. Anyway, glad you're not criticizing Obama.

0 ( +0 / -0 )

Why would I include projected costs when we're talking about money that has already been spent?

0 ( +0 / -0 )

"Lifeline", bah! He is asking the Chinese to lend him money for more government pork, which future generations will have to pay back.

Rick Santelli nails it here: http://www.youtube.com/watch?v=THZeE15gWZQ

0 ( +0 / -0 )

Yeah, another nail in America's coffin. Let's punish the successful and reward the failed ones. Why should anyone bother with their mortgages now? Obama is gonna pay for all!

0 ( +0 / -0 )

another futile effort..to save a sinking titanic, no matter how many trillions u pump in, its like throwing them in the sea..the bubble economy had been burst. Wild, lavish and uncontrolled spending by most of the middle and higher income Americans had landed them in hot soup, i think the best way is change the mind set of U.S consumer, anyhow this is useless, considering U.S citizen still live in their dream. ..i eager to see U.S economy went down the drain, when the time comes U.S might will become a war monger (where there is war , there is profit from blood money) and just start another round of world war which is predicted by Nostradamus...that will halves the world populations..before the brink of Armageddon..(World war 3, or known as religion war of ignorance). U don't need to believe in what i wrote, u just need to wait and see....hahaha

0 ( +0 / -0 )

Snap polls strongly suggest Americans overwhelmingly support Obama's plans. Talk about the using the Bully pulpit.

Right Wing Blow Hard Rich Lowry describes:

Obama is "trying to redefine extensive government activism as simple pragmatism, and if he succeeds, might well shift the center of American politics for a generation."

Obama told the rich point blank their taxes are going up, told the people of America that government and only government can solve their problems, and the American people approve of him and his plan more today than yesterday.

Well that's the lay of the land, Rich, after eight years of failed Bush policies, and thirty-eight after failed Reagan economics. I'm calling it:

We have now entered into a new domestic order, a Center/Left grand coalition that will last another generation.

Looks like you, Rich, and all you Republican buddies are, now what was that word....

Oh yeah,

inconsequential.

0 ( +0 / -0 )

Right on, Mr. President. I am going to have to pay for others mistakes. I did not tell those who are in trouble to buy houses they knew they could not afford. I am not responsible for the banks poor decisions to lend said buyers the money. Some parts of the stimulus I am ok with but other parts are outrageous. I don't mind the senior citizens getting a little of the money, they deserve it.

0 ( +0 / -0 )

OhioDonna said:

Right on, Mr. President. I am going to have to pay for others mistakes. I did not tell those who are in trouble to buy houses they knew they could not afford. I am not responsible for the banks poor decisions to lend said buyers the money.

Right on OhioDonna we should let the whole economy tank so you can bask in your moral outrage. I am paying for my home just fine. But I understand there are others lest fortunate than myself. Many, many, many people are not able to meet there mortgage for one reason and one reason only - they lost their job. They had no problem paying their mortgage for years but now there are no jobs to be found.

It's a good time to be holier than thou, isn't it? Never mind that the true cause of the crisis was speculation in general, unregulated derivatives, specifically Credit Default Swaps, and the bundling of those sub-prime mortgages. If the sub-prime mortgages would not have been bundled and sold but rather held by each bank that wrote the loan then individual banks would have felt the pain much earlier and been forced to pull back on such practices. However banks wrote these toxic loans and then shipped them out in a bundle with good, solid loans. Thus allowing them to write new ones and bundle them with good loans and in turn ship them out also.

The conservatives were in power and it was their job to regulate practices that would bring down our economy. It is a fact there was less enforcement of regulations during the last administration let alone new regulations that were needed on instruments like Credit Default Swaps, in which there is absolutely no regulation and every bank that went down had exposure to these financial liabilities.

I am for as little regulation as possible and allow the market to operate free and without restraint from the government in general. But anyone with half a brain can see that a monopoly will cheat the public if given the chance. We have regulations on monopolies for that very reason. There is a good reason we said an accounting firm must not be a corporation's auditor and advisor due to somewhat recent events with companies like Enron. There are excellent reasons why, after the crash of 1929, U.S. regulations forbade banks using borrowed money to purchase stocks well beyond any reasonable capitalization. Also there was put into place a limit on margins investors could maintain. There had been investors without even one real dime invested on a stock they owned.

The past administration did not enforce current regulations properly and did not modernize regulations to meet the explosion of the market's dabbling in derivatives.

I am not saying people do not need to take responsibility. However, we need to inject money into the economy, stabilize home prices and rid the market of a large proportion of its toxic assets. How could anyone choose punishing those, who may rightly deserve it, over the survival of our economy, I'll never understand. If you don't know that we almost had a complete meltdown of our financial markets and we would have had a depression if that happened then you do not understand what happened last autumn when the large brokerage firms, investment insurance firms and banks took a dive to the level of insolvency.

Obama is doing a good job in restoring our economy. I would ask that the group responsible for the chatter of economic morality just shut the hell up. That ship has sailed when the last administration failed to properly regulate the financial markets.

0 ( +0 / -0 )

To the group that believes that stock market reaction should dictate our country's economic policy or even a determinant factor in gauging the success of such policies on a day to day or even week to week basis should learn that investors are very rarely economists or have a graduate level of finance education. First off, I am not saying the opposite, that economists and highly educated finance persons are rarely investors; they are frequently investors. But as far as investors go, the ones with any advanced knowledge of finance beyond reading and analyzing cash flow statements, balance sheets, income statements and statements of shareholders’ equity are extremely rare. But we are actually talking about economics which is quite different then high finance. Anyone who thinks the daily stock market trading is an accurate measurement of the work Obama's economists to successfully revive our economy is completely clueless. Very long term market response has some value in one small area of economics but the opinions of the investors may still have no real relationship to the health of America's corporations or economy during the long term period which the investor's reactions were measured.

I am not saying confidence is not a major factor. However if Obama is able to repair some of the systemic problems and inject capital into the economy the market can't help but respond favorably over time. In other words fix it and they will follow.

Some people may say that I think I know what I am talking about. I do. I got top grades in my advanced level of study. The one think I learned that is most important is that I don't know squat. I don't know how to fix the economy. I don't know any of the answers that are truly important to our economy and our financial markets stability. However, I am smart enough to know these people claiming Obama is wasting money don't know what the hell they are talking about. Most of them rely on the information that during the Reagan years they saw taxes cut and the economy improved. They have not got a clue how, during the Clinton years taxes went up on the upper middle class and the rich and everyone because of the gas taxes, but the economy soared like it never had before. Ever! Not in that short amount of time! So they continue to spout off about how Reagan was a genius and that he understood economics or some tripe like that. I also know that most of the time it is impossible for individuals to get economics right. It is usually the nexus of collaboration that can best discover how the dynamics of economics are effecting the current economic environment. It generally takes huge consortia to achieve any level of reliability and rarely is any person or group of persons able to predict much concerning the future.

Obama has pledged that he will adjust policy to follow any path that is successful and abandon any path that does not appear to be productive in reviving our economy. That is the absolute best economic position to take right now. We must be willing to try a variety of things to stimulate our economy. We must change.

0 ( +0 / -0 )

Good Donkey

Thanks for your posts.

As for Wall Street, well, we know what they really want. Bailout with no strings and a return to the good ole days of the bubble. Nothing more. Nothing less.

And I want a toilet made of solid gold, baby.

0 ( +0 / -0 )

Yeah. Why take responsibility for your financial decisions when Democrats are so eager to help and even reward those who don't?

Lately I've been thinking: why try to improve any dimension of your life?

You'll only put some young 'community organizer' - with 40 or 50 grand in student loans - out of work.

0 ( +0 / -0 )

What the hell are you talking about rollonarte? I take responsibility for my financial decisions; can you name a Democrat on this thread that doesn't?

We are talking about the nation's economic survivability and you are trying to tie your party's failure into our party's repair of a decimated financial system just because we are willing to not use people who screwed up as pawns.

I noticed you failed to answer the question of whether you would rather punish those who took those toxic loans or would you rather see the economy restored? Those who took the loans were in a bilateral contract; where is your moral outrage for the banks who entered into these contracts?

0 ( +0 / -0 )

Login to leave a comment

Facebook users

Use your Facebook account to login or register with JapanToday. By doing so, you will also receive an email inviting you to receive our news alerts.

Facebook Connect

Login with your JapanToday account

User registration

Articles, Offers & Useful Resources

A mix of what's trending on our other sites