Ron Paul on the bailout

[IAMX 3,055]

We all love feeding at the trough until it gets empty.

Exactly! Dont forget who spends the money, and who has been in control of the purse for the past few years.

Exactly! Congress and Bush. Hey, you're starting to think straight now.

[Pinocchio Liberal 268]

We all love feeding at the trough until it gets empty.

Exactly! Dont forget who spends the money, and who has been in control of the purse for the past few years.

Exactly! Congress and Bush. Hey, you're starting to think straight now.

Dont forget Chris and Barney! Oh and Good Ol Billy. Credit needs to be given where CREDIT is earned!

[Nikita2Charles 32]

Ok

One of my colleague house has dropped by 60%, from %570,000 to $230,000. With that dire circumstances lot of

homeowners in the area just abandon their house, so many foreclosed homes. My house has dropped by as much as 40%. Mistake we bought at the wrong time, at the peak of the market.

The bank took the risk, they know what they were getting into, at time falsifying information to increase applicant's income so they can qualify for a higher loan owners

So whose going to bail us out, and all those homeowners?

Edited September 25, 2008 by Nikita2Charles

[luckytxn 2,264]

Ok

One of my colleague house has dropped by 60%, from %570,000 to $230,000. With that dire circumstances lot of

homeowners in the area just abandon their house, so many foreclosed homes. My house has dropped by as much as 40%. Mistake we bought at the wrong time, at the peak of the market.

So whose going to bail us out, and all those homeowners?

No one should bail you out of stupidity but luckily you have a govermental atmosphere that probably will.

[Pinocchio Liberal 268]

Ok

One of my colleague house has dropped by 60%, from %570,000 to $230,000. With that dire circumstances lot of

homeowners in the area just abandon their house, so many foreclosed homes. My house has dropped by as much as 40%. Mistake we bought at the wrong time, at the peak of the market.

So whose going to bail us out, and all those homeowners?

Sorry to hear that! You fukced -up. You were chasin greed and now you want me to help you? Ive been waitin it out for a long time. To cry foul now is falling on deaf ears. Good luck!

Ok

One of my colleague house has dropped by 60%, from %570,000 to $230,000. With that dire circumstances lot of

homeowners in the area just abandon their house, so many foreclosed homes. My house has dropped by as much as 40%. Mistake we bought at the wrong time, at the peak of the market.

So whose going to bail us out, and all those homeowners?

No one should bail you out of stupidity but luckily you have a govermental atmosphere that probably will.

Catching the falling knife!

[Scott & Lai 12]

I say do nothing. Recession is a NATURAL part of the economic cycle. You can't avoid it with bailouts like this. The bailouts have to be paid for eventually, or we will not be dealing with bankrupt companies but a bankrupt government. It will come with policies like these.

Cute that Republican philosophy is for small government and fiscal responsibility. Buying out huge corporations and spending billions of dollars to do it... that ain't either, Mr. Bush and colleagues.

The current administration is a different breed of Republican... the party has lost its way.

[luckytxn 2,264]

Maybe the Reps were never that way anyway and just said they were to make us vote for them.

[IAMX 3,055]

We all love feeding at the trough until it gets empty.

Exactly! Dont forget who spends the money, and who has been in control of the purse for the past few years.

Exactly! Congress and Bush. Hey, you're starting to think straight now.

Dont forget Chris and Barney! Oh and Good Ol Billy. Credit needs to be given where CREDIT is earned!

You also need to go a bit farther back too. Like George Sr. and Ronald.

Maybe the Reps were never that way anyway and just said they were to make us vote for them.

There was decent Republicans around. These people just never got elected because they didn't take advantage of the stupidity of people to cling to buzzwords or how knee-jerk and predictable people are as much as the Republicans who get elected do.

[luckytxn 2,264]

Well I have always liked my Republican Congressman. Strange to find any like him I have to look to the Libertarian party usually.

[Trumplestiltskin 5,791]

We all love feeding at the trough until it gets empty.

Exactly! Dont forget who spends the money, and who has been in control of the purse for the past few years.

Two. Actually.

[luckytxn 2,264]

Received another email from my Congressman again just now. Thought I would add it to this thread but doubt it will generate much excitement except same old that we already had. Anyway I thought I would add it. Also a couple criticized him for not offering a solution and I said his solution was to do nothing.

Dear Friends:

The financial meltdown the economists of the Austrian School predicted has arrived.

We are in this crisis because of an excess of artificially created credit at the hands of the Federal Reserve System. The solution being proposed? More artificial credit by the Federal Reserve. No liquidation of bad debt and malinvestment is to be allowed. By doing more of the same, we will only continue and intensify the distortions in our economy - all the capital misallocation, all the malinvestment - and prevent the market's attempt to re-establish rational pricing of houses and other assets.

Last night the president addressed the nation about the financial crisis. There is no point in going through his remarks line by line, since I'd only be repeating what I've been saying over and over - not just for the past several days, but for years and even decades.

Still, at least a few observations are necessary.

The president assures us that his administration "is working with Congress to address the root cause behind much of the instability in our markets." Care to take a guess at whether the Federal Reserve and its money creation spree were even mentioned?

We are told that "low interest rates" led to excessive borrowing, but we are not told how these low interest rates came about. They were a deliberate policy of the Federal Reserve. As always, artificially low interest rates distort the market. Entrepreneurs engage in malinvestments - investments that do not make sense in light of current resource availability, that occur in more temporally remote stages of the capital structure than the pattern of consumer demand can support, and that would not have been made at all if the interest rate had been permitted to tell the truth instead of being toyed with by the Fed.

Not a word about any of that, of course, because Americans might then discover how the great wise men in Washington caused this great debacle. Better to keep scapegoating the mortgage industry or "wildcat capitalism" (as if we actually have a pure free market!).

Speaking about Fannie Mae and Freddie Mac, the president said: "Because these companies were chartered by Congress, many believed they were guaranteed by the federal government. This allowed them to borrow enormous sums of money, fuel the market for questionable investments, and put our financial system at risk."

Doesn't that prove the foolishness of chartering Fannie and Freddie in the first place? Doesn't that suggest that maybe, just maybe, government may have contributed to this mess? And of course, by bailing out Fannie and Freddie, hasn't the federal government shown that the "many" who "believed they were guaranteed by the federal government" were in fact correct?

Then come the scare tactics. If we don't give dictatorial powers to the Treasury Secretary "the stock market would drop even more, which would reduce the value of your retirement account. The value of your home could plummet." Left unsaid, naturally, is that with the bailout and all the money and credit that must be produced out of thin air to fund it, the value of your retirement account will drop anyway, because the value of the dollar will suffer a precipitous decline. As for home prices, they are obviously much too high, and supply and demand cannot equilibrate if government insists on propping them up.

It's the same destructive strategy that government tried during the Great Depression: prop up prices at all costs. The Depression went on for over a decade. On the other hand, when liquidation was allowed to occur in the equally devastating downturn of 1921, the economy recovered within less than a year.

The president also tells us that Senators McCain and Obama will join him at the White House today in order to figure out how to get the bipartisan bailout passed. The two senators would do their country much more good if they stayed on the campaign trail debating who the bigger celebrity is, or whatever it is that occupies their attention these days.

F.A. Hayek won the Nobel Prize for showing how central banks' manipulation of interest rates creates the boom-bust cycle with which we are sadly familiar. In 1932, in the depths of the Great Depression, he described the foolish policies being pursued in his day - and which are being proposed, just as destructively, in our own:

Instead of furthering the inevitable liquidation of the maladjustments brought about by the boom during the last three years, all conceivable means have been used to prevent that readjustment from taking place; and one of these means, which has been repeatedly tried though without success, from the earliest to the most recent stages of depression, has been this deliberate policy of credit expansion.

To combat the depression by a forced credit expansion is to attempt to cure the evil by the very means which brought it about; because we are suffering from a misdirection of production, we want to create further misdirection - a procedure that can only lead to a much more severe crisis as soon as the credit expansion comes to an end... It is probably to this experiment, together with the attempts to prevent liquidation once the crisis had come, that we owe the exceptional severity and duration of the depression.

The only thing we learn from history, I am afraid, is that we do not learn from history.

The very people who have spent the past several years assuring us that the economy is fundamentally sound, and who themselves foolishly cheered the extension of all these novel kinds of mortgages, are the ones who now claim to be the experts who will restore prosperity! Just how spectacularly wrong, how utterly without a clue, does someone have to be before his expert status is called into question?

Oh, and did you notice that the bailout is now being called a "rescue plan"? I guess "bailout" wasn't sitting too well with the American people.

The very people who with somber faces tell us of their deep concern for the spread of democracy around the world are the ones most insistent on forcing a bill through Congress that the American people overwhelmingly oppose. The very fact that some of you seem to think you're supposed to have a voice in all this actually seems to annoy them.

I continue to urge you to contact your representatives and give them a piece of your mind. I myself am doing everything I can to promote the correct point of view on the crisis. Be sure also to educate yourselves on these subjects - the Campaign for Liberty blog is an excellent place to start. Read the posts, ask questions in the comment section, and learn.

H.G. Wells once said that civilization was in a race between education and catastrophe. Let us learn the truth and spread it as far and wide as our circumstances allow. For the truth is the greatest weapon we have.

In liberty,

Ron Paul

[SpiritAlight 1]

Received another email from my Congressman again just now. Thought I would add it to this thread but doubt it will generate much excitement except same old that we already had. Anyway I thought I would add it. Also a couple criticized him for not offering a solution and I said his solution was to do nothing.

Dear Friends:

The financial meltdown the economists of the Austrian School predicted has arrived.

We are in this crisis because of an excess of artificially created credit at the hands of the Federal Reserve System. The solution being proposed? More artificial credit by the Federal Reserve. No liquidation of bad debt and malinvestment is to be allowed. By doing more of the same, we will only continue and intensify the distortions in our economy - all the capital misallocation, all the malinvestment - and prevent the market's attempt to re-establish rational pricing of houses and other assets.

Last night the president addressed the nation about the financial crisis. There is no point in going through his remarks line by line, since I'd only be repeating what I've been saying over and over - not just for the past several days, but for years and even decades.

Still, at least a few observations are necessary.

The president assures us that his administration "is working with Congress to address the root cause behind much of the instability in our markets." Care to take a guess at whether the Federal Reserve and its money creation spree were even mentioned?

We are told that "low interest rates" led to excessive borrowing, but we are not told how these low interest rates came about. They were a deliberate policy of the Federal Reserve. As always, artificially low interest rates distort the market. Entrepreneurs engage in malinvestments - investments that do not make sense in light of current resource availability, that occur in more temporally remote stages of the capital structure than the pattern of consumer demand can support, and that would not have been made at all if the interest rate had been permitted to tell the truth instead of being toyed with by the Fed.

Not a word about any of that, of course, because Americans might then discover how the great wise men in Washington caused this great debacle. Better to keep scapegoating the mortgage industry or "wildcat capitalism" (as if we actually have a pure free market!).

Speaking about Fannie Mae and Freddie Mac, the president said: "Because these companies were chartered by Congress, many believed they were guaranteed by the federal government. This allowed them to borrow enormous sums of money, fuel the market for questionable investments, and put our financial system at risk."

Doesn't that prove the foolishness of chartering Fannie and Freddie in the first place? Doesn't that suggest that maybe, just maybe, government may have contributed to this mess? And of course, by bailing out Fannie and Freddie, hasn't the federal government shown that the "many" who "believed they were guaranteed by the federal government" were in fact correct?

Then come the scare tactics. If we don't give dictatorial powers to the Treasury Secretary "the stock market would drop even more, which would reduce the value of your retirement account. The value of your home could plummet." Left unsaid, naturally, is that with the bailout and all the money and credit that must be produced out of thin air to fund it, the value of your retirement account will drop anyway, because the value of the dollar will suffer a precipitous decline. As for home prices, they are obviously much too high, and supply and demand cannot equilibrate if government insists on propping them up.

It's the same destructive strategy that government tried during the Great Depression: prop up prices at all costs. The Depression went on for over a decade. On the other hand, when liquidation was allowed to occur in the equally devastating downturn of 1921, the economy recovered within less than a year.

The president also tells us that Senators McCain and Obama will join him at the White House today in order to figure out how to get the bipartisan bailout passed. The two senators would do their country much more good if they stayed on the campaign trail debating who the bigger celebrity is, or whatever it is that occupies their attention these days.

F.A. Hayek won the Nobel Prize for showing how central banks' manipulation of interest rates creates the boom-bust cycle with which we are sadly familiar. In 1932, in the depths of the Great Depression, he described the foolish policies being pursued in his day - and which are being proposed, just as destructively, in our own:

Instead of furthering the inevitable liquidation of the maladjustments brought about by the boom during the last three years, all conceivable means have been used to prevent that readjustment from taking place; and one of these means, which has been repeatedly tried though without success, from the earliest to the most recent stages of depression, has been this deliberate policy of credit expansion.

To combat the depression by a forced credit expansion is to attempt to cure the evil by the very means which brought it about; because we are suffering from a misdirection of production, we want to create further misdirection - a procedure that can only lead to a much more severe crisis as soon as the credit expansion comes to an end... It is probably to this experiment, together with the attempts to prevent liquidation once the crisis had come, that we owe the exceptional severity and duration of the depression.

The only thing we learn from history, I am afraid, is that we do not learn from history.

The very people who have spent the past several years assuring us that the economy is fundamentally sound, and who themselves foolishly cheered the extension of all these novel kinds of mortgages, are the ones who now claim to be the experts who will restore prosperity! Just how spectacularly wrong, how utterly without a clue, does someone have to be before his expert status is called into question?

Oh, and did you notice that the bailout is now being called a "rescue plan"? I guess "bailout" wasn't sitting too well with the American people.

The very people who with somber faces tell us of their deep concern for the spread of democracy around the world are the ones most insistent on forcing a bill through Congress that the American people overwhelmingly oppose. The very fact that some of you seem to think you're supposed to have a voice in all this actually seems to annoy them.

I continue to urge you to contact your representatives and give them a piece of your mind. I myself am doing everything I can to promote the correct point of view on the crisis. Be sure also to educate yourselves on these subjects - the Campaign for Liberty blog is an excellent place to start. Read the posts, ask questions in the comment section, and learn.

H.G. Wells once said that civilization was in a race between education and catastrophe. Let us learn the truth and spread it as far and wide as our circumstances allow. For the truth is the greatest weapon we have.

In liberty,

Ron Paul

Beautiful.

Language has power (i.e. the power of words):

"rescue plan"...

Ha!

BUGGERS!

Edited September 26, 2008 by SpiritAlight

[luckytxn 2,264]

I hear you Spirit. Unfortunately most people are hearing the major parties and following them to the edge.

[Alan and Noemi 0]

It seems to me that this bail out plan is yet another way of transferring public money into primarily private hands. (Very much like all the contractors rebuilding Iraq) Whats worse, the American people are being asked to make loans to companies that have proven themselves incompetent to the point of collapse. Does this sound like a good idea?

These companies should fail, as all companies do that cannot run their business. But we are told this will cause a recession or maybe even depression on a worldwide scale. That makes preventing this supposed catastrophe really really important, possibly the most important global issue there is. Therefore:

There is a solution no politician is talking about. One that prevents the meltdown and does not expose taxpayers to tremendous risk.

It's called: "Eminent domain"

If there has even been a clearer case of justification for acquisition by eminent domain, I have never seen it.

The government should simply seize and take ownership of the companies and all assets. (They should be bankrupt anyway). Money is spent to fix the problem, but the assets of the companies are used as collateral to limit or eliminate the risk to the taxpayers. When the companies recover and become successful again. Parts are sold off to responsible companies with a history of actual success in their business dealings.

The crisis is avoided.

Huge risk to the taxpayers is avoided

The companies are not rewarded for failure (and others think twice before looking for a handout again)

The companies do not go bankrupt... they get fixed. Since the government now owns them, they can stop foreclosures until people can refinance of sort out their problems.

Win-Win. Low Risk. Help for those in dire circumstances.

In the end, the government is out of the business with a profit.

The only ones who don't win are the greedy capitalist executives who caused this mess in their quest for the almighty dollar.

Does it really matter if it might be construed as unconstitutional? After all, since Bush took the white house, we haven't been using it anyway.

Patriot act... no habeas corpus... need I go on?

Just my $.02

[luckytxn 2,264]

Sounds good Alan. The money you said to fix the problem is gonna be huge and since it is the Government then that means it is our money. The Government is not supposed to be running our financial institutions but they do run the central banks so maybe they can run the banks.