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  1. #1
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    Default U.S. Pledges Top $7.7 Trillion to Ease Frozen Credit

    Bloomberg.com: Exclusive

    Nov. 24 (Bloomberg) -- The U.S. government is prepared to provide more than $7.76 trillion on behalf of American taxpayers after guaranteeing $306 billion of Citigroup Inc. debt yesterday. The pledges, amounting to half the value of everything produced in the nation last year, are intended to rescue the financial system after the credit markets seized up 15 months ago.

    The unprecedented pledge of funds includes $3.18 trillion already tapped by financial institutions in the biggest response to an economic emergency since the New Deal of the 1930s, according to data compiled by Bloomberg. The commitment dwarfs the plan approved by lawmakers, the Treasury Departmentĺs $700 billion Troubled Asset Relief Program. Federal Reserve lending last week was 1,900 times the weekly average for the three years before the crisis. .............

    *Read the rest in the link*
    For some perspective, They were reporting this number to be only 5 Trillion just last week. Our national debt was roughly 10 trillion about a couple months ago. That 7.5 trillion is equal to half of everything we produced last year. With this amount, we will have increased our national debt by roughly 75% in just months, compared to the entire formerly $10 trillion of debt that took this nation over a hundred years (or since the founding of the nation I'd guess) to amass.

  2. #2
    Senior Member Darjur's Avatar
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    Fuck I lol'd. I might be a socialist, but even I see that as a bad move.

  3. #3
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    Quote Originally Posted by Darjur View Post
    Fuck I lol'd. I might be a socialist, but even I see that as a bad move.
    THANK YOU for common sense.

  4. #4
    Senior Member Nillerz's Avatar
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    Ugh, this is retarded.

    They should have just laid back and waited for other banks to buy up the bankrupt ones.

  5. #5
    Senior Member ptgatsby's Avatar
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    Quote Originally Posted by Risen View Post
    For some perspective, They were reporting this number to be only 5 Trillion just last week. Our national debt was roughly 10 trillion about a couple months ago. That 7.5 trillion is equal to half of everything we produced last year. With this amount, we will have increased our national debt by roughly 75% in just months, compared to the entire formerly $10 trillion of debt that took this nation over a hundred years (or since the founding of the nation I'd guess) to amass.
    Keep in mind that debt buys things, and so the actual debt increase should be measured against what is being bought.

    But... yah. That's a bit much, even for a two pronged attack on the money supply contraction and the financial crisis. In my eyes, the likelyhood of depression goes way up... both in the length and depth. I don't see any soft landing to this.

  6. #6
    Senior Member Lateralus's Avatar
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    They're never going to learn.
    "We grow up thinking that´╗┐ beliefs are something to be proud of, but they're really nothing but opinions one refuses to reconsider. Beliefs are´╗┐ easy. The stronger your beliefs are, the less open you are to growth and wisdom, because "strength of belief" is only the intensity with which you resist questioning yourself. As soon as you are proud of´╗┐ a belief, as soon as you think it adds something to who you are, then you've made it a part of your ego."

  7. #7
    ^He pronks, too! Magic Poriferan's Avatar
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    Half of the GDP?!
    For the love of God, it's not all a matter of just throwing money at things.
    Go to sleep, iguana.


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  8. #8
    Senior Member creativeRhino's Avatar
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    I just love the way some people insist profit is "privatized" (ie "don't tax me or regulate me!" and losses have to be shared in the community ("help help, if you don't help me we'll all be doomed!").

    Bailouts galore around the world. A very big redistribution of wealth is taking place.

    A kind of reverse socialism and ethically a dubious proposition.

    When I studied the dismal science (Economics 1977!) much of what we know know as mainstream monetary practice was theory. Only the Chicago boys (Milton Friedman's Chicago School of Economics grads) going to Chile for some testing of theories... for the rest of the world it was theoretical. Reagan and Thatcher hadn't come to power yet.

    Even my most rightwing professors were just a bit nervous about the deregulation thing - once unleashed, as one professor put it, you won't be able to easily reverse the practices and it will be expensive to fix the consequences. In the drive to move to monetarist economics self regulation was promoted as if it were magic virtue possessed and practiced by all.

    Since the early 1980s there's been more than enough evidence (as if history didn't have enough already) of people not behaving rationally and in a sustainable manner. That is both on the supply and demand side.

    The credit bubble is the bubble that all the bubbles we've had since the early 1980s have been inside. The stockmarket, dot-com, real estate etc ones all depended on credit being easy and plentiful. Before this credit was restricted - rationed and then doled out based on the lender's preferences and proof you could support the debt. Since then there's been less and less consideration of viability and real risks. Ultimately though it all falls down with foreclosures/failures in a falling asset price and low demand.

    The right regulations have to be in place - simple prudence nothing fancy bureacratic, but based on sound principles.

    I think it is wrong to put the money into protecting banks rather than investors. The investors trusted and the banks had the ultimate control (and knowledge or lack thereof of what they were doing) and screwed up. Let the investors/customers then choose where to put their money next.

  9. #9
    Senior Member Lateralus's Avatar
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    Quote Originally Posted by creativeRhino View Post
    Since the early 1980s there's been more than enough evidence (as if history didn't have enough already) of people not behaving rationally and in a sustainable manner. That is both on the supply and demand side.
    Actually, their behavior was perfectly rational. The problem was that the Fed made credit too cheap. That act made loans that would have normally been unprofitable appear to be profitable. The Fed should have foreseen this, but that's what happens when you have central planning, unintended consequences.
    "We grow up thinking that´╗┐ beliefs are something to be proud of, but they're really nothing but opinions one refuses to reconsider. Beliefs are´╗┐ easy. The stronger your beliefs are, the less open you are to growth and wisdom, because "strength of belief" is only the intensity with which you resist questioning yourself. As soon as you are proud of´╗┐ a belief, as soon as you think it adds something to who you are, then you've made it a part of your ego."

  10. #10
    Arcesso pulli gingerios! Eldanen's Avatar
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    Quote Originally Posted by Magic Poriferan View Post
    Half of the GDP?!
    For the love of God, it's not all a matter of just throwing money at things.
    What the freaking fuck, lol.

    Yep MP, you're right.

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