I'd like opinions on this email from my Senator - Political Fever

Lumara · #1 (**permalink**) 10-17-2008, 03:13 PM

I wish I were friends with someone like Ron Paul who has a deep understanding of economics. But I'm not, so I'd like to elicit opinions from those of you who have a good understanding of economics about this email I just received from Senator Corker:

Quote:

Dear Ms. L,

Thank you for taking the time to contact my office regarding the Emergency Economic Stabilization Act. Your input is important to me, and I appreciate the time you took to share your thoughts.

Like many Tennesseans, I am frustrated with our economic situation. Wall Street, regulatory agencies, and policy makers in Washington failed America - and let's face it, too many Americans borrowed money for houses they simply could not afford. This behavior has brought our credit and lending markets to their near breaking point, and it is important that we provide responsible action to prevent a dire financial crisis.

I believe the original concept proposed by the Secretary of Treasury in order to bring relief to our financial markets was incomplete. I now believe, after weeks of negotiations, that I supported a bi-partisan package that protects taxpayers, provides accountability and oversight, and limits exorbitant executive pay.

As many Tennesseans will recall, I strongly opposed the $168 billion so-called economic stimulus package last spring and likened it to throwing cash in a mud puddle, but there's a stark difference between that giveaway and this investment plan. Instead of cutting checks that will never be repaid, we will purchase assets that will hopefully produce gains, and one hundred percent of any income made will go toward paying down the national debt. If our resources are invested properly, the federal government will get all of its money back and taxpayers may even see a return on their investment.

It is tempting to think about Wall Street and Main Street separately, but they are actually closer than perceived. Main Street relies on money and credit that banks and financial institutions provide for everyday transactions. If the credit markets continue to deteriorate, and credit provided by our country's banks and lenders is no longer available, businesses will no longer be able to secure short-term loans, forcing them to lay off workers because they can't meet payroll. It will become difficult for individuals to secure car loans, student loans or mortgages - leading to more foreclosures, pressure on housing prices, and a worsening credit crunch. In a worst-case scenario, payment systems we have come to rely on may no longer function and the ability to even cash a paycheck may no longer exist. This is how a financial crisis becomes an economic calamity that will have an effect on every American and Tennessean.

Even though this bill has been signed into law, we are not out of the woods yet. I strongly believe that there will be some tough economic days ahead for our county. It will be the responsibility of the Senate Banking Committee, of which I am a member, to continue examining and reforming regulatory measures to see that we are not put in this type of financial situation again. I believe that with the passage of this bill, we have brought even greater attention to the importance of cleaning up the mess in Washington and on Wall Street.

Thank you again for your letter. I hope you continue to share your thoughts with me as I serve you in the United States Senate.

Sincerely,

Bob Corker
United States Senator

First of all, I find it difficult to believe that every Congressman read every single page of the 476-page bill before voting on it. Second, the darned thing was filled with pork which strikes me as just more business as usual. Third, I'd like to know, were they just responding to fearmongering and throwing money at the problem without truly understanding the economics behind what they were voting on?

Does Bob Corker have good points and a good reason for voting the way he did? Is it true that without the bailout bill life would be even harder for the average person than it will be after the bill? Or is that just the party line to appease taxpayers while we are being screwed?

I'd appreciate intelligent input from those who understand economics and am not looking for puerile slogans from those who don't. Thanks.

golfnut · #2 (**permalink**) 10-17-2008, 11:23 PM

(Instead of cutting checks that will never be repaid, we will purchase assets that will hopefully produce gains, and one hundred percent of any income made will go toward paying down the national debt. If our resources are invested properly, the federal government will get all of its money back and taxpayers may even see a return on their investment.)

The words in bold print highlight a few of my concerns on this bailout bill.

Jojo · #3 (**permalink**) 10-17-2008, 11:52 PM

Quote:

Originally Posted by golfnut

(Instead of cutting checks that will never be repaid, we will purchase assets that will hopefully produce gains, and one hundred percent of any income made will go toward paying down the national debt. If our resources are invested properly, the federal government will get all of its money back and taxpayers may even see a return on their investment.)

The words in bold print highlight a few of my concerns on this bailout bill.

The govt will also be in the position of deciding which banks get bailout money and which don't - with no oversight. Talk about a temptation to corruption!

Affrayer · #4 (**permalink**) 10-18-2008, 06:45 AM

Quote:

Originally Posted by Lumara

But I'm not, so I'd like to elicit opinions from those of you who have a good understanding of economics about this email I just received from Senator Corker:

The E-Mail is crap.

The "toxic" mortgages can be roughly broken down into two groups, borrowers who could never afford them and those borrowers who might afford them but the economic environment changed. We "might" and that's a slim "might" be able to help those who could afford them if they got their job back. But those who were playing fast and loose with the mortgage market, hoping to flip the house when interest rates went up, are losers. Understand that I have no idea what percentage of the "toxic" mortgages can be salvaged and what percentage cannot be. As long as that is an unknown anyone who "thinks" we can break even or make a profit is talking out of their anus.

I don't know if you can understand that so let me put it another way. Some of those "toxic" mortgages can't be salvaged. How much is unknown but it appears to be most of them. So anyone claiming things will be humpty dumpty in the future is faking it.

The bankers shouldn't of made the loans because they were too risky.

The borrowers should not have borrowed the money because they were too risky.

They took the risks and the government should not bail them out.

The 750 billion would have been better spent priming the pump after the market collapsed.

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