Wall Street Protests

[Tormund Ukrainesbane]

Are you talking loans that were repaid, or grants? It's kind of a big difference. And is this just one loan, or the added up total of all the loans over time? I think it's the latter. In which case, if you take out a new $10B loan each day, repay it, and then take out another one the next day, for a year, the total of those loans is going to be over $2.1T. But really, it's only a $10B loan renewed each day. So the details are incredibly important if we're going to talk numbers.

Why does it matter? This is money that was provided for free to the extremely wealthy. This money belongs to the taxpayers of the United States. It is not available for them to borrow. Their representatives were not consulted on the matter.

Without knowing the terms and other details, we may just be talking the equivalent of one $10B loan for one year. Assume it is interest free, and the actual value of it is less than $400M. We simply don't know. So I don't think you're going to get quite as many schools built as you think, especially in comparison to the $30+B being proposed now in the jobs bill.

I'm not a fan of the new jobs bill either, or public schools. I am just pointing out the MASSIVE difference in scale between what the monied interests get (16 TRILLION DOLLARS, which if we use your going-out-today-coming-back-tomorrow model is $43,835,616,438.00 per day).

And just so you don't think I'm just being a technical dickhead, here's the first article I found on a Citibank "bailout". It talks about repayment at 8%, an agreement to back $300B in debt on Citbank's books (that's not paying the debt, just acting as insurance for the sake of market confidence), etc. The total of $2.1B looks a lot more like guaranteeing loans already on the books at Citibank, not simply giving them more money that could have been used to build schools

That bailout is actual government money from the treasury department. It is in addition to loans from the Fed.

[felice]

As a simplistic example,you take out a loan, secured by your stock in the corporation. You invest the proceeds at a higher rate of return in whatever, using the return on that investment to service the loan. So, for an extreme example, borrow $100 a 1%, secured by the stock. Then invest the $100 at 8%. At the end of year 1, you have $8 of cash, on which you pay $3.2 of tax (using 40% as a proxy for a blended highest rate), leaving you $4.8, $1 of which goes to service your debt, the remaining $3.8 you get to play with.

I don't quite see where the problem is. You're not paying tax on dividends from your business, but you are paying them on dividends from the loan-funded investment instead. How is it different from just taking an $8 dividend out of your business?

I put $100 into a business, why should there be a presumption that I can only ever get $60 of that money back (unless I sell, only for $100 or liquidate)?

Why should you be able to get the money back without selling or liquidating? If you buy a car you can't get the dealer to refund your money while you keep the car. If you put money in a savings account, you can't take it out again and keep earning interest. If you sell for more than $100, you're taxed on the difference at the same rate. It's basically a capital gains tax; dividends are effectively capital gains paid in advance.

[awesome possum]

I don't know -- it's your argument. I'm simply asking you to support it. Out of curiousity, I assume you're including all the auto company bailouts in there?

Yes. And no doubt it saved jobs, but there also really isn't much doubt that it was caused by a combination of incompetence, arrogance, and lack of foresight by the top brass. By people who were careless with large amounts of money. Sound familiar?

Well, in addition to the auto bailouts, we did have an $800B stimulus package that didn't go just to moneymakers on Wall Street. How people spent that money, whether to avoid foreclosure or not, I don't know. And there were a bunch of other programs aimed squarely at entities other than Wall Street. The problem is that they didn't work, not that we didn't spend the money.

The problems were many, but spending money wasn't one of them. Not spending enough money was a likely contributor.

Just because I don't parrot easy rhetoric doesn't make me obtuse. We have some extremely serious economic problems, some of which are due to problems on Wall Street. But the idea that we're in a shit sandwich because we gave all this money to Wall Street and none to the common people is just simplistic, populist bullshit.

It's really not. Both Wall Street and the "common" people were hurting, and both were helped by the government but only one had their problems fixed. The other was given a bandage.

It ducks the three core issues of 1) people living on credit and inflated wealth beyond their means, and that artificial wealth has collapsed; 2) a federal government also living well-beyond its means, with an increasing proportion of tax dollars going simply to service the debt, with prospects for the future looking significantly worse, and 3) a loss of competitiveness at home that has killed our ability to produce and sell goods internationally.

And you don't believe corporate malfeasance has a role in all three of those issues?

But those problems are simply too difficult and controversial to address so we create a boogeyman

I know, bogeyman's are lame. And this one isn't even black.

whose death really wouldn't solve any of them, and in fact might make them worse.

Whats with the talk of death? Asking that the scales be weighed fairly will kill nothing, but nice hyperbole.

This is an easy copout -- a distraction -- to avoid tough choices.

Right. The peasants need to stop creating bogeymen and just tighten up their belts.

But when a few hundred people started dressing up as zombies and marching behind the banners of the Democratic Socialists of America, that's when they figured out how bad it was? Really?

No, you don't parrot easy rhetoric. Never.