Have you guys been following?

[Ddrak]

No, I wasn't being snarky at all. I was quite serious.

The argument for welfare is very much along the lines that the rich (ie those who can afford to spare some cash) have the moral imperative to ensure those who aren't so well off in society do not starve to death. The best channel for this is some form of distribution system and as multiple distribution systems could be argued to be inefficient then should you subscribe to that point of view then the government is the logical first choice to manage it. Taxes are set indirectly by popular vote, as are welfare levels so you end up with the moral imperative being the foundation for the welfare system.

Note that I made no value judgment on the concept of welfare itself so I don't see how you can read anything into what was quite a logical statement. In fact, it was derived from Obama's claim that it was patriotic for the rich to pay more taxes and help bail America out of deficit-land.

Directly addressing Ari's comments, you can't say "it's no one's responsibility to take care of anyone but their own" but "There's nothing wrong with assisting those people that are falling on hard times". Those are directly contradictory positions as assisting people that aren't "your own" is taking money from "your own" and therefore a bad thing.

Note also that welfare cheats take such a small slice of the budget that it's not even worth talking about. I've yet to figure why people get so pissy about that when there's far more serious rorts pretty much everywhere else.

Dd

[Partha]

Actually, I'd argue that the conservative position would be that government shouldn't be involved in welfare, because it should be an individual's choice whether or not to help people in poverty. The Liberal position is that that's a fine sounding idea, but doesn't work in practice, therefore the hand of the state is needed to get it done.

[Klast Brell]

Some thoughts to put 700 million in perspective

[Embar Angylwrath]

Billion Klast. 700 billion. (And add to that what the Fed has already dropped on other bailouts, we're talking 1 trillion dollars)

[Harlowe]

I'm pretty sure that was a typo.

[Kulaf]

Don't you guys routinely claim that the rich will have a moral imperative to take care of the poor of this nation, and that's why we shouldn't have welfare?

I think it is the local areas respsonsibility. I may hate San Fransisco politics.....but ya know what......they choose to take care of their homeless and they choose to do it locally and I can respect that stance. I also have the choice not to live there.....which I exercise.

[Klast Brell]

Yup. I had a brain fart.

[Embar Angylwrath]

The Bailout (capital B for this monster) looks close. Based on Bush's speech last night, it will include oversight and compensation limitiations for financial executives participating in the Bailout, which are two reversals from the original position.

I'm still incredibly conflicted about this bailout. Do I want to see another Depression and a recession that would probably take half a decade to recover from? No, of course not. But truthfully, I don't think that will happen.

You guys don't see much tinfoil hattery from me, but what I thnk the government is trying to do is prevent other countries from taking over the US financial system. Here's why I think this...

There is a LOT of money in the global markets. Sure, the US is big, and its tied to every other market in the world, but as an aggregate, the collective overall world financial position is larger than ours. If our system collapses, sure, it will put a strain on the world economy, but countries able to bear the strain (China, maybe India, some of the more cash heavy oil producing Arab states, maybe even Russia) would be in an awesome position to pick up undervalued US assets at firesale prices. In short, if they can take the first hit, they can buy America's financial system. And since the US government has already poured in $300 billion into this crisis already, foreign governments could control a good portion of that $300 billion as well.

In America, money has a large influence on politics, so buy purchasing a large segment of the American economy for pennies on the dollar, a foreign government could both 1)enrich itself and 2) have a large pull in American politics.

That's what I think the government is really trying to prevent... a foreign government buying a large portion of the US economy at fire-sale prices.

[Harlowe]

I've been wondering about that to a certain degree myself. That this is more about power than about the ecomony. More importantly, this all feels extremely uncomfortable and familiar, similar to how the Patriot Act was pushed through.

Pressure to make quick decision + that empowers executive branch + costs hundreds of billions of dollars from taxpayers + no oversite + insert statement about apocolyptic "or else" outcome.

[Partha]

I would be convinced of the legitimacy of the original offer if it hadn't been for the fighting to allow all the banks to dump their bad loan packages. With that, it just looks like a typical Bush grab for unlimited power and a chance for his Wall Street buddies to loot the Treasury one more time out the door.

[Ddrak]

what I thnk the government is trying to do is prevent other countries from taking over the US financial system.

That's part of it, for sure. I don't know if it will really work though - it just holds it off from being a fire sale to being a decline on the US dollar, which makes everything just as vulnerable in the end.

Noises are already being made about the end of the US as the sole financial superpower: http://www.reuters.com/article/newsOne/ ... L020080925

Dd

[Embar Angylwrath]

http://www.politico.com/news/stories/0908/13918.html

McCain's gambit to inject Presidential politics into the negotiations blew up, big time. The Democrats turned the tables on him and left him a political eunuch at the table.

Heady times!

[Embar Angylwrath]

Oh.. and I'm beginning to think a collapse may just be the best long-term thing for the US, in terms of a new political paradigm. You can bet that if this shit blows up because of posturing and political protectionism, we just may see a voter revolt and a wholesale sweeping out of career politicians, who obviously didn't see this coming, and if they did, were complicit in it happening.

[Harlowe]

I don't have a ton of presidential elections to judge this by, but man, this is some wild theatrics going on.

For the fun of it, Sarah Silverman

http://thepage.time.com/sarah-silverman-video/

[Arkaron]

Directly addressing Ari's comments, you can't say "it's no one's responsibility to take care of anyone but their own" but "There's nothing wrong with assisting those people that are falling on hard times". Those are directly contradictory positions as assisting people that aren't "your own" is taking money from "your own" and therefore a bad thing.

Note also that welfare cheats take such a small slice of the budget that it's not even worth talking about. I've yet to figure why people get so pissy about that when there's far more serious rorts pretty much everywhere else.

Dd

Ari's comments may be contradictory, but they're fairly American views to have. I've had various songs from Music Man stuck in my head whenever I watch the news now, for pretty much anything.

Oh, there's nothing halfway
About the Iowa way to treat you,
When we treat you
Which we may not do at all.
There's an Iowa kind of special
Chip-on-the-shoulder attitude.
We've never been without.
That we recall.
We can be cold
As our falling thermometers in December
If you ask about our weather in July.
And we're so by God stubborn
We could stand touchin' noses
For a week at a time
And never see eye-to-eye.
But what the heck, you're welcome,
Join us at the picnic.
You can eat your fill
Of all the food you bring yourself.
You really ought to give Iowa a try.
[...]
But we'll give you our shirt
And a back to go with it
If your crops should happen to die.
[...]
You really ought to give Iowa a try!

[Embar Angylwrath]

So... the vote is supposed to be today. I imagine the bailout bill will pass. For the sake of argument, let's assume it does. What will the US Fed do if the mechanisms in the bill fail to provide the stability needed to open up lendning again? What's left in their bag of tricks?

I can only think of one thing. Nationalization of the banking industry. If the US can't buy their way out of this, what choice do they have? I suppose they can just stand back and let everything collapse. Most economists agree that even without intervention, the market will correct itself, but it would be incredibly painful and take some time. And its obviouse most Americans are reacting to this emotionally, and don't have a good understanding of the situtation. They still see this as a bailout for fatcats. They can't grasp that Wall Street and Main Street are linked together in such a way that a failure of the banking industry can cause credit markets to evaporate. No loans for cars, homes. Reduction of credit card allowances. Forget about non-governmental school loans. Lines of credit cancelled for businesses, which means businesses unable to make payroll or pay vendors.

Without credit, our economic model fails, and recession/depression will be the result. Will the US allow that?

Personally, I don't think so. I think the US will nationalize the financial industry. I think the US Federal Reserve will become the US Federal Reserve Bank and Trust, and start loaning money on a more wider scale. It will compete for bank business, and start doing commercial paper instead of just limiting itself to loans to banks.

[Embar Angylwrath]

About 7 minutes left on the vote. Its close, but looks like it will pass.

[Embar Angylwrath]

About 2 minutes left and the Republicans are sinking the bill.

[Embar Angylwrath]

Looks like the bill failed!

[Lurker]

Yeah. Nice job liveblogging there Embar.