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Posted: 1/28/2014 10:33:34 AM EDT
Hypothetical:

Bush sees the credit crisis, makes a hard decision and finally decides to just let the chips fall. No TARP, no bailout.

Where do you think where we would be now?
Link Posted: 1/28/2014 10:34:14 AM EDT
We'd still be fucked, just in a different way.
Link Posted: 1/28/2014 10:38:36 AM EDT
Return to sub-8000 point sustainable DOW, reduction in amount of money for pet projects and social programs, a quick punch to the gut that would have taken some time to recover from, some people would starve, but the ship would be set on the right course again.

A return to an non-inflated economy, reasonable markets and a dollar that's worth a dollar would eventually stabilize.  As it is, the bubble is just being grown to the point where the explosion will be terminal.
Link Posted: 1/28/2014 10:47:42 AM EDT
less welfare programs... I'm down
Link Posted: 1/28/2014 10:55:58 AM EDT
By now we would be on the road to actual recovery.
Link Posted: 1/28/2014 11:12:59 AM EDT
everything would magically return to the imaginary past when people worked hard and a man's word was iron clad. there would be no credit or debt, and faeries would joyfully dance in the forest all day long.

Link Posted: 1/28/2014 11:13:30 AM EDT
Link Posted: 1/28/2014 11:17:52 AM EDT
it would have been a meltdown of epic proportions that no one really can grasp. If you really understood what happened to the money supply when the shtf, you would know it would have been ugly and I mean very ugly.
Link Posted: 1/28/2014 11:22:20 AM EDT
worse off than now, but with a safer future
Link Posted: 1/28/2014 11:24:52 AM EDT
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Originally Posted By DK-Prof:
impossible to say
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That is the most reasonable answer, but I will say that I don't trust people who say they can make water run uphill, either.

No amount of government bailout can make the "Free Lunch" sign truly mean what it says.  IMHO.
Link Posted: 1/28/2014 11:26:02 AM EDT
Good question.  Tag
Link Posted: 1/28/2014 11:40:43 AM EDT
The market will always correct itself when allowed to do so.  We simply aren't allowing it.
Link Posted: 1/28/2014 11:51:00 AM EDT
The people in the government told us that the economy would stop functioning if there wasn't a bailout of the financial services industry.
I'm surprised that people would question the statements of President Bush and Mr. Paulson.

America would have been reduced to the barter "system".
Link Posted: 1/28/2014 11:52:01 AM EDT
[Last Edit: 1/28/2014 11:52:14 AM EDT by TacticalHeater]
Banks would have won no matter what and the taxpayer would have been screwed either way.
Link Posted: 1/28/2014 11:54:58 AM EDT
Banks and car companies would have different names.
Link Posted: 1/28/2014 11:56:43 AM EDT
Should've let it happen and then prosecuted the shit out of those responsible....instead they were rewarded enough to retire on the backs of the American working force. Same could be said for many in our goobermint. Seize their accounts, hunt them down and try them as socialists, hang em for treason and crimes against the people.......but that will never happen, too many getting rich off of it.
Link Posted: 1/28/2014 11:56:52 AM EDT
Link Posted: 1/28/2014 12:00:01 PM EDT
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Originally Posted By midcap:
it would have been a meltdown of epic proportions that no one really can grasp. If you really understood what happened to the money supply when the shtf, you would know it would have been ugly and I mean very ugly.
View Quote



It's Monopoly money.. just numbers in a computers somewhere, not hard assets.

Link Posted: 1/28/2014 12:01:04 PM EDT
one thing for sure is we would not be 17+trillion in debt
Link Posted: 1/28/2014 12:09:49 PM EDT
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Originally Posted By Undefined:
We'd still be fucked, just in a different way.
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Even though you are from the best state in The Union... I disagree.

No bailouts would have caused very rapid and multiple bankruptcies.  First the big 3 automakers, then their suppliers, then their suppliers, and so on until it hit the banks.  The banks that were strong, well diversified, and smart with their lending policies would have survived.  It would have been ugly, but they would have survived.  

While the world would have been ending according to the MSM, the good thing about rapid bankruptcies is the rapid pace the voids are filled by a free market.  The banks that survived would be the big kids on the block, with plenty of capital to lend, eager people to start new businesses to replace the fallen and rehire everyone laid off.  

We would now be rid of most of, if not all, UAW/organized labor in the automaker segment.  

The demand for new cars would drop, drastically, because of lost wages, but so would supply due to the lack of manufacturing taking place.  Funny how the market balances.

I'm no expert, just my $0.02.
Link Posted: 1/28/2014 12:13:17 PM EDT
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Originally Posted By d_rob1031:


Even though you are from the best state in The Union... I disagree.

No bailouts would have caused very rapid and multiple bankruptcies.  First the big 3 automakers, then their suppliers, then their suppliers, and so on until it hit the banks.  The banks that were strong, well diversified, and smart with their lending policies would have survived.  It would have been ugly, but they would have survived.  

While the world would have been ending according to the MSM, the good thing about rapid bankruptcies is the rapid pace the voids are filled by a free market.  The banks that survived would be the big kids on the block, with plenty of capital to lend, eager people to start new businesses to replace the fallen and rehire everyone laid off.  

We would now be rid of most of, if not all, UAW/organized labor in the automaker segment.  

The demand for new cars would drop, drastically, because of lost wages, but so would supply due to the lack of manufacturing taking place.  Funny how the market balances.

I'm no expert, just my $0.02.
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Originally Posted By d_rob1031:
Originally Posted By Undefined:
We'd still be fucked, just in a different way.


Even though you are from the best state in The Union... I disagree.

No bailouts would have caused very rapid and multiple bankruptcies.  First the big 3 automakers, then their suppliers, then their suppliers, and so on until it hit the banks.  The banks that were strong, well diversified, and smart with their lending policies would have survived.  It would have been ugly, but they would have survived.  

While the world would have been ending according to the MSM, the good thing about rapid bankruptcies is the rapid pace the voids are filled by a free market.  The banks that survived would be the big kids on the block, with plenty of capital to lend, eager people to start new businesses to replace the fallen and rehire everyone laid off.  

We would now be rid of most of, if not all, UAW/organized labor in the automaker segment.  

The demand for new cars would drop, drastically, because of lost wages, but so would supply due to the lack of manufacturing taking place.  Funny how the market balances.

I'm no expert, just my $0.02.


super regional banks would rise to fill the void in supply.
Link Posted: 1/28/2014 12:14:39 PM EDT

Discussion ForumsJump to Quoted PostQuote History
Originally Posted By 2minkey:


everything would magically return to the imaginary past when people worked hard and a man's word was iron clad. there would be no credit or debt, and faeries would joyfully dance in the forest all day long.



View Quote
this made me chuckle.

 





Link Posted: 1/28/2014 12:15:17 PM EDT
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Originally Posted By YukonBoy03:


super regional banks would rise to fill the void in supply.
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Discussion ForumsJump to Quoted PostQuote History
Originally Posted By YukonBoy03:
Originally Posted By d_rob1031:
Originally Posted By Undefined:
We'd still be fucked, just in a different way.


Even though you are from the best state in The Union... I disagree.

No bailouts would have caused very rapid and multiple bankruptcies.  First the big 3 automakers, then their suppliers, then their suppliers, and so on until it hit the banks.  The banks that were strong, well diversified, and smart with their lending policies would have survived.  It would have been ugly, but they would have survived.  

While the world would have been ending according to the MSM, the good thing about rapid bankruptcies is the rapid pace the voids are filled by a free market.  The banks that survived would be the big kids on the block, with plenty of capital to lend, eager people to start new businesses to replace the fallen and rehire everyone laid off.  

We would now be rid of most of, if not all, UAW/organized labor in the automaker segment.  

The demand for new cars would drop, drastically, because of lost wages, but so would supply due to the lack of manufacturing taking place.  Funny how the market balances.

I'm no expert, just my $0.02.


super regional banks would rise to fill the void in supply.


Very true.  There are several local banks in my hometown of about 50,000 population that never even felt the crunch.  
Link Posted: 1/28/2014 12:27:57 PM EDT
[Last Edit: 1/28/2014 12:28:47 PM EDT by TexasSmooth]
I haven't really yet seen a basic macroecon explanation so i thought I might offer one, and no, contrary to most arfcommers and a lot of the 'internet-at-large's beliefs, the Federal Reserve doesn't outright own the country nor are they some mysterious boogeyman ready to enslave every man woman and child.  The Federal Reserve, as a national bank, is a tool, just like any firearm except the Fed operates on a much larger scale.  In the right hands, it can be a tool used to help supercharge this nation into an era of prosperity, but in the wrong hands....well, it should be easy to figure that one out.

Anyway, part of the whole bailout involved the Fed drastically inflating the money supply in this nation in order to buy a lot of .gov debt.  They do this by, yes, simply pressing some buttons and creating more money.  That IS part of their job believe it or not.  Had the whole bailout not happened, monetary supply would continued on as it was however given the rapid realization that there was trillions worth of bad assets, credit would have tightened more than Xena, Seven of Nine and Starbuck's virgin cunts all put together.  Like a couple others have said bankruptcies of some large companies likely would have happened, GM for example.  

From a free market point of view with minimal .gov interference (which I personally subscribe to), this would have been good because it is necessary to flush the crap of bad business down the toilet so that some stronger company can come in with a better business plan and take its place.  I'm all for that, but the problem at the time was that there was the potential for a LOT of businesses to go down that road in a very short period of time.  With that much burden placed on our economy as a whole, could it have withheld the sheer numbers of newly unemployed, the drain on public assistance and keep going long enough for a new or existing business to come and help stabilize stuff?  That process alone can take a couple years, minimum.  I really don't know the answer to that one.  

I don't really like Keynesian economic theories for the sole reason that it's practice is to advocate for .gov spending in times of economic downturn.  The problem is I have yet to see any decent explanation of when the .gov stimulus stops, according to what indicators and under whose authority.  If someone tried to answer that, undoubtedly they'd point to either the President, Congress, the Fed Reserve Chairman or someone on the NYSE, and therefore you will continue to have these problems.
Link Posted: 1/28/2014 12:30:07 PM EDT
[Last Edit: 1/28/2014 12:37:21 PM EDT by RogueSpear2023]
Everyone would have learned their lesson the hard way. But instead they have learned nothing which is going to make the pain that is coming much worse.

I don't think they big three auto makers would have failed. GM and Chrysler definitely, but Ford who was in much better shape financially would have rapidly filled the void. Remember Ford asked for free money from .gov since everyone else was getting it but the Fed refused. So like it or not everyone of you if wanted new it would be Ford or Foreign.
Link Posted: 1/28/2014 12:32:40 PM EDT
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Originally Posted By RogueSpear2023:
Everyone would have learned their lesson the hard way. But instead they have learned nothing which is going to make the pain that is coming much worse.
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indeed
Link Posted: 1/28/2014 12:33:04 PM EDT
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Originally Posted By DK-Prof:
impossible to say
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Why not? Obama told us what unemployment would be without the bail outs. It would have been lower.
Link Posted: 1/28/2014 12:42:15 PM EDT
Originally Posted By MaChu:
Hypothetical:

Bush sees the credit crisis, makes a hard decision and finally decides to just let the chips fall. No TARP, no bailout.

Where do you think where we would be now?
View Quote

If we had let the markets correct themselves we would have seen big banks fail we would have lost one or maybe two of the big three auto makers fail. The banks and auto makers that remained would be stronger.
Another big if is if we had a President Calvin Coolidge who would not try to fix the problem we would be in much better shape today financially.
Link Posted: 1/28/2014 12:43:41 PM EDT
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Originally Posted By midcap:
it would have been a meltdown of epic proportions that no one really can grasp. If you really understood what happened to the money supply when the shtf, you would know it would have been ugly and I mean very ugly.
View Quote

Same reason we invaded Iraq.  

Without condemning or condoning, I understand.
Link Posted: 1/28/2014 12:48:12 PM EDT
[Last Edit: 1/28/2014 12:52:04 PM EDT by bigairt]
The choice was peel the bandaid off quickly or slowly. No bailout was the quick option. We chosen the slow option.  What people don't understand about the bailout (especially those not in debt)  is that they rely of businesses that use ultra-short term financing to get their goods to sell. Credit liquidity would have gone to zero. Produce and gasoline being two good examples. No bailout and grocery stores wouldn't have been able to buy things to sell. Gas stations can't get gas, etc. We would have been majorly screwed. Debt valuations would have spiraled down in value creating more margin calls (business use high quality debt for collateral on loans). Everything goes to zero. Martial law, curfew, soup lines, etc.

Instead were destined for inflation. Not hyper, but higher. At a 4% level of inflation the dollar will lose half it's value in only 18 years. That means the real value of the debt gets cut in half. Not bad, huh? What is the FED telling us? INFLATION IS TOO LOW! They're selling the people on creating more inflation. The FED was created one hundred years ago. It's mission statement was to maintain the value of the dollar. In the 70s the dual mandate of Full employment was added. Since the FED was created, the dollar has lost 95% of its value.

Edit:  inflation makes future time worth less. However, it makes it easier to pay off previous debt. Time is money. They're trying to convince us that isn't true.
Link Posted: 1/28/2014 12:48:44 PM EDT
I think an awful lot of jobs would have been gone and would never return.
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