Shiftdnb wrote:What is your opinions on the Bank bailout? What should be done to balance our budget? Cuts, revenue? Something has to be done, decision makers what are your answers?
No one likes the Bank bailouts, but the program was a success. The Government realized that a few major banks, Wells Fargo, Wash U, Citi, and BoA, which collectively controlled more than half of the depositors reserves, where not going to be able to meet their obligations to their clients and debtors. What do you do when you hear that half of your friends have lost their savings in a money market or checking account with a major bank? If you are smart, you go to your bank and request a distribution of all your funds so it doesnt happen to you. In the meantime, confidence in the banking system erodes, banks are low on cash or dont have the cash (because they have lent it out) to cash out your savings and checking, and all hell breaks lose. Now the bank is closing down your credit card, line of credit, and the line of credit that is used by businesses to buy supplies and make payroll. As a result thousands of businesses cant meet their obligations and we are in full panic.
So the US Gov forces all major banks to take loans (under the understanding that if you decline, you will never be able to get assistance of any kind). All major banks where forced to take the bailout so people would not be able to make out which ones are in trouble, and start a run on deposits, making the situation worse. So what is a company like Goldman Sachs, with 80 Billion in cash suppose to do, take the money and try to make a profit so you can pay back the government back with interest. In the end, the US actually made a profit from the original bailouts. The failure was the auto bailout, where the government will never get its money back, but no one seems to worry about that (strange).
The government had an opportunity to cap compensation and re-work contracts as a condition of assistance, but failed to do so. Once the bank pays the government its money back, they should be allowed to run their business how they see fit, with massive stipulations in order to receive further aid.
Expenses should be cut to balance our budget. George mentioned ways to cut the defense budget. If you are going to raise taxes and I think you are going to eventually have to, it should be on everyone. Singling out a small portion of the population that already pays more than 50% of all taxes, while providing credits and refunds to those that pay 0, is not a fair method.
Capital gains tax is there to help drive venture capital. Facebook may not exist today, along with all the jobs it created if not for the capital investments made by a few. You want to entice people to free up money, make it easier for them to make money, by reducing taxes, not raising them.
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