MaggieMae
Reality bits
- Apr 3, 2009
- 24,043
- 1,635
Bush decided AIG was too big to fail. Obama decided GM and Chrysler were too big to fail. Apparently it is a POTUS thing? In my humble opinion, let the bastards fail!
I couldn't agree more, and I don't give a fuck what party's doing it, it's bullshit. Yes, it will hurt for some of these , "too big to fail" businesses to fail, (especially political contributions/favors), but in the long run somebody would pick up the slack for the failed business. Who knows, some innovation might even come out of it.
I THINK this goes deeper than pastry.
While I tend to agree that we should have let them fail, because they are the ones that devised the entire crisis by taking huge risks from not following basic business protocol for sound banking.
HOWEVER, I have really been thinking about this and the question of WHY did President Bush and the congress and senate, believe that the bailout of these mega corporations was a 'life or death' of our country, situation?
And in my opinion, what was going on behind the scenes, was that our national debt had already risen to $11 trillion from the $5.6 trillion National Debt accumulated so far in our History as a country, which Clinton and his congress left them...was already requiring $400 billion in tax revenues to pay (back in 2005) for just the interest payment on that debt...AND this payment was at a fairly low interest rate, BECAUSE of our "A" credit rating....
sooooooooo, they were probably thinking that ALL HELL would break loose, IF the banks and AIG and Goldman Sachs, Fannie and Freddie etc failed, then our own Credit rating would be lowered, MAKING our yearly INTEREST payment on the National Debt rise to $800 BILLION a year of the Budget, leaving ONLY $400 billion left of our income tax revenues to RUN the rest of the country...like paying for Defense, paying for Medicare, and all else that they spend on...including the willy nilly crapola.
They wanted to be able to keep on keeping on, with their spending, without having to raise taxes in any quantities, which definitely would damper what they seem to do best, spend our money.
In addition to this, the higher interest rate, thus the doubling of our debt interest payment, could have cut us off from the borrowing needed, in any kind of national defense mission that could be put upon us.
I realize this is just speculation but I would bet I am right on this being a behind the scenes, factor, in all of this....
I think you're already forgetting that the failure of Lehman Brothers (and earlier Bear-Stearns) created worldwide panic in the investment communities. If something was not done immediately to shore up their losses and prevent their bankruptcy, there would have been a 1929-like run on all banks, and the entire global financial system would have collapsed. And this country is intrinsically tied to the global financial arena.