Economic Stimulus plan: a disaster?

2/8/2009:

Economy “expert” Peter Schiff explains why he believes the recently approved Economic Stimulus plan will be an “unmitigated disaster.”

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268 Comments on "Economic Stimulus plan: a disaster?"

matt_72
Member
[quote comment=”137342″]Well I wasn’t really talking about the politicians. They don’t really know much about a lot of these issues. They care the politics. I am referring to the people who study the issues. The economists, the guys at the CFR, or the guys at Brookings or even Cato. As for the mortgages themselves, I’m not much concerned with moral valuations of right and wrong. Mass foreclosures would be very bad for the country. That’s what I worry about. I find it odd that you can support a government bailout of the banking system because of the negative impact a banking collapse would have on our economy but when it comes to home owners you want the government to stay out of it and let whatever happens, happen. You hold an absolutist position that is simply not realistic.[/quote] I don’t support the bailout of the banks if the primary purpose is to give bankers bonus checks – and this idea is the equivalent of that one when it comes to irresponsible home buyers. I supported the bailout only to the extent that it provided capital for keeping the banks solvent, nothing more. It wasn’t done to protect the bankers, it was done to protect their trading counterparties and the system as a whole. And my position is very realistic – it is being implemented daily. Banks are in the process of modifying tons of mortgages as we speak. The problem is – those people still end up defaulting even after… Read more »
brian_g
Member
brian_g

Well I wasn’t really talking about the politicians. They don’t really know much about a lot of these issues. They care the politics.

I am referring to the people who study the issues. The economists, the guys at the CFR, or the guys at Brookings or even Cato.

As for the mortgages themselves, I’m not much concerned with moral valuations of right and wrong. Mass foreclosures would be very bad for the country. That’s what I worry about.

I find it odd that you can support a government bailout of the banking system because of the negative impact a banking collapse would have on our economy but when it comes to home owners you want the government to stay out of it and let whatever happens, happen.

You hold an absolutist position that is simply not realistic.

matt_72
Member
[quote comment=”137310″]You’re missing my point, Matt. I am not suggesting that there is a more efficient way of dealing with mortgage insolvency. What I am saying is that you cannot simply state that if negotiating bankruptcies was beneficial to the lender they would do so. There could be institutional obstacles preventing them from doing so. You are of the belief that whatever systemic shock shocks may occur from having 10 million homes default are not a big enough concern to have the government intercede. There are others, generally not involved in finance, who believed the exact same thing about bailing out AIG and the banks. They believed whatever economic shocks occurred were a necessary part of the process. I believe that both you and the guys against the banking bailouts are adhering to an outdated philosophy and that the role of modern governments is to normalize shocks and that I would prefer 10 years of slow or no growth to 5 years of massive deflation of the economy. Perhaps you are right but there are few people involved in public policy who agree with you.[/quote] The people you cite in public policy are the same tools that thought it was a good idea to promote “affordable mortgages” and no regulations on the GSEs. You should keep that in mind whenever they open their flytraps. They took campaign contributions from the chief culprits behind this crisis and completely enabled their poor decision making. And you trust their judgement now? That makes… Read more »
Easy-E
Member
Isn’t the whole problem here that this is basically a house of cards? Based on bad loans given to people who had no business getting THAT much money in the first place? Then the banks bought up all of these mortgage backed securities that were artificially inflated with a higher rating that they should have gotten? So score one for the dumbfucks who bought more than they could afford, thinking that “(un)real estate never goes down!” “They’re not makin’ anymore land!!”, (like the stupid asshole unreal estate douchebags here on 411 3 years ago) thinking they could make a killing selling it before the ARM resets their rate. Score one more for the people who sold the homes and mortgages and ran with the commissions. Score one for the greedy retards at the banks – Lehman etc, who apparently have no fucking clue what they had or what they were doing. *applause* A perfect storm of stupidity and greed. Everyone take a bow. So, the banks have a tangible asset, the house, but that doesn’t mean they can sell it for anything close to what the mortgage is worth. MOST of these other markets are not anything like Hoboken or NYC. There is no one to sell to, and it’s a bitch to get a mortgage anymore, let alone the jumbos people would need for the asking prices of some of these places – Miami for example. So let’s say you tell people to fuck off and deal with it,… Read more »
brian_g
Member
brian_g

You’re missing my point, Matt.

I am not suggesting that there is a more efficient way of dealing with mortgage insolvency.

What I am saying is that you cannot simply state that if negotiating bankruptcies was beneficial to the lender they would do so. There could be institutional obstacles preventing them from doing so.

You are of the belief that whatever systemic shock shocks may occur from having 10 million homes default are not a big enough concern to have the government intercede.

There are others, generally not involved in finance, who believed the exact same thing about bailing out AIG and the banks. They believed whatever economic shocks occurred were a necessary part of the process.

I believe that both you and the guys against the banking bailouts are adhering to an outdated philosophy and that the role of modern governments is to normalize shocks and that I would prefer 10 years of slow or no growth to 5 years of massive deflation of the economy.

Perhaps you are right but there are few people involved in public policy who agree with you.

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