Trickle Up Theory????! What to do with the 700 Billion instead of handing it to Wall Street???????????

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    Sep 26, 2008 1:54 AM GMT
    WALL STREET TRICKLE UP THEORY is the best solution to the Wall Street economic crisis I can think of..... Divide the 700 Billion in suggested LOANS to Wall Street up for 250 Thousand or so defaulting (or close to defaulting) loans providing about 30K each (to be paid with low interest and a starting pay back in 10 yrs)! Just for people whom reside in their homes with the defaulting loans and those that are about to lose their home .... Individual cases would have to be reviewed.... And, controls over the property until the loans are repaid... I suppose??? Then we don't have more people (including kids) in the streets or in need of other services... Nobody is getting a golden parachute.... etc..... Everybody wins! So, let's help out the little guy and it will help out the big guy.... Sorta Reverse Reganism???? I would be much more comfortable with that!!!!!! Got a better idea????????????
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    Sep 26, 2008 1:56 AM GMT
    Great idea! I'll vote for "trickle up" economics over "trickle down" any day.
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    Sep 26, 2008 2:00 AM GMT
    Sounds good. When can I default on my loan to get a piece of this action?

    I have a loan payment to make tomorrow. Should I hold off?
  • Bunjamon

    Posts: 3161

    Sep 26, 2008 2:15 AM GMT
    http://www.nytimes.com/2008/09/23/business/worldbusiness/23krona.html?ex=1379908800&en=6d4c14207caedd26&ei=5124&partner=permalink&exprod=permalink

    "How Sweden solved its bank crisis"

    A few things to be learned, I think...
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    Sep 26, 2008 2:19 AM GMT
    Is it just me or does it seem a little risky giving $700 billion in small loans to people that are already in default or close to being in default for buying homes that they could not afford in the first place? If they cannot afford them today, what makes anyone think they can afford them tomorrow, or next week, or next month? Does their income somehow go up?

    How much is the agency that oversees this going to cost? I like that you have oversight but oversight costs money. Which means a huge federal agency to see that homeowners are living up to their agreements. Which means another big building in Washington and one in each state and maybe one in each city with managers and admins and admins to admins and janitors. Not to mention that these will all be Federal workers so you have union dues and healthcare and sick leave and parking issues.

    How about just buy, not give, but buy the bad companies, let them run themselves, take a profit as owners without all the headaches.

    Just a thought......

    JW
  • SkyMiles

    Posts: 963

    Sep 26, 2008 2:24 AM GMT
    Hael YEAH!!! I already got mine SPENT! But I got this plan to spin my debt into TRILLIONS OF DOLLARS IN ASSETS!!!

    JOIN ME! icon_biggrin.gif

    Trick-le UP! Trick-le UP! Trick-le UP! Trick-le UP! Trick-le UP! Trick-le UP!
    Trick-le UP! Trick-le UP! Trick-le UP! Trick-le UP! Trick-le UP! Trick-le UP!
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    Sep 26, 2008 2:28 AM GMT
    Wow. I just read that Swedish article. It says pretty much what I said, and I am not an MBA! I did not even go to an Ivy league college.

    Thanks. Very helpful. Truly. People should read it.

    JW
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    Sep 26, 2008 2:31 AM GMT
    The problem is that we do not produce the capital to make the loan worth while. For America we are about 51% produce and 49% inport. If we can not produce for ourselves and export...we are fucked. Money on credit without product has fucked us. We must produce and export.
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    Sep 26, 2008 2:34 AM GMT
    Lou Dobbs, tonight, suggested that they give each American taxpayer $20K, each. Let the people stimulate the economy. Not sure it's a great idea, but I could use the cash. icon_biggrin.gif
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    Sep 26, 2008 2:43 AM GMT
    Trickle down does work. Time and time again.

    If a rich person can't buy a yacht, boo hoo. Tax the hell out of him.

    But ask the guy that builds the yacht, and the guys that work for him, and the subcontractors and the suppliers of fiberglass and everything that goes into building that yacht. The mechanics and the upholsterers and the engineers. The carpenters and the carpet guys.

    Rich guy can't afford a yacht? yahoo. The hundreds of craftsman that would have made a living building that yacht, and their wives/husbands and kids that now have no income? Oh well. Boo hoo.

    Trickle down would not have trickled down to them anyway, or would it have?

    Now we have more families on government assistance because their folks worked in the yacht industry. Extrapolate that. House in Aspen? Private plane? Vacations in Aruba? Gone. Jobs that depend on that? Gone. People that depend on that income? On the dole. Get in line. Fill out a form.
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    Sep 26, 2008 4:01 AM GMT
    ruck_us saidLou Dobbs, tonight, suggested that they give each American taxpayer $20K, each. Let the people stimulate the economy. Not sure it's a great idea, but I could use the cash. icon_biggrin.gif


    That'd be awesome. I would take that money and run to Amesterdam before the nation officially collapses though. icon_smile.gif
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    Sep 26, 2008 4:03 AM GMT
    Triggerman saidTrickle down does work. Time and time again.

    If a rich person can't buy a yacht, boo hoo. Tax the hell out of him.

    But ask the guy that builds the yacht, and the guys that work for him, and the subcontractors and the suppliers of fiberglass and everything that goes into building that yacht. The mechanics and the upholsterers and the engineers. The carpenters and the carpet guys.

    Rich guy can't afford a yacht? yahoo. The hundreds of craftsman that would have made a living building that yacht, and their wives/husbands and kids that now have no income? Oh well. Boo hoo.

    Trickle down would not have trickled down to them anyway, or would it have?

    Now we have more families on government assistance because their folks worked in the yacht industry. Extrapolate that. House in Aspen? Private plane? Vacations in Aruba? Gone. Jobs that depend on that? Gone. People that depend on that income? On the dole. Get in line. Fill out a form.


    Solution? An economy where the majority doesn't depend on a minority, whether it be through a business or the state.
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    Sep 26, 2008 4:12 AM GMT
    Triggerman, you've mentioned this trickle-down theory before. Your characterization is backward.

    Trickle-down theory is the Reagan-era meme referring to supply-side economics, where supplying tax cuts encouraged business to supply more goods and services.

    Your own example demonstrates demand-side economics, although it's a sad (read: narcissistic) example. You bought the yacht and buoyed the local economy. Kudos. But this effort did not provide additional goods and services, it used them.
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    Sep 26, 2008 4:39 AM GMT
    Whew.... I was pretty much throwing out some humor here. :-) But, now that I think about it..... I like the idea even more... It's cool that they've been discussing this (i.e. Lou Dobbs, et al). I will have to get on youtube.

    Anyway, I found a quote that I like: "Mr. David Stockman has said that supply-side economics was merely a cover for the trickle-down approach to economic policy—what an older and less elegant generation called the horse-and-sparrow theory: If you feed the horse enough oats, some will pass through to the road for the sparrows."
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    Sep 26, 2008 4:49 AM GMT
    Trickle-down economics" and "trickle-down theory," is the economic-political argument that the increases in the wealth of the rich are good for the poor because some of such additional wealth will eventually trickle down to the middle class and to the poor.

    Wikipedia, not me, Mickey-

    You, once again, totally misunderstand what I said. You obviously miss the entire concept.

    My analogy fits perfect.

    How, exactly, do we stimulate the demand side if the demand side does not have work?

    Your tired Castro era politics never worked. They did not work for him, they will not work here. Silly, sad and tired.

    JW
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    Sep 26, 2008 4:52 AM GMT
    Hmmmm. Great idea, lets give the bail out money to the populus who created the problem by borrowing to live way beyond their means. Definitely a real bright one, extend more credit to the group that created the mess by living on credit. Its so circularly delicious it just might work!

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    Sep 26, 2008 5:05 AM GMT
    Triggerman saidTrickle-down economics" and "trickle-down theory," is the economic-political argument that the increases in the wealth of the rich are good for the poor because some of such additional wealth will eventually trickle down to the middle class and to the poor.

    Wikipedia, not me, Mickey-

    You, once again, totally misunderstand what I said. You obviously miss the entire concept.

    My analogy fits perfect.

    How, exactly, do we stimulate the demand side if the demand side does not have work?

    Your tired Castro era politics never worked. They did not work for him, they will not work here. Silly, sad and tired.

    JW

    Uh, I read that Wikipedia article. You did not. Your example demonstrated demand-side economics, not supply-side. Your tax cut did not encourage you to create a product or service, thus buoying the economy with your trickle-down benevolence. You PURCHASED a yacht (which, last I checked, was a "demand" not a "supply"), thus boosting the economy. For which I said, "Kudos."

    Once again, you've demonstrated a lack of ability to read, to follow a train of thought, and create a cogent point. And I doubt you know anything about Castro either, but that's just me being a prick.
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    Sep 26, 2008 5:05 AM GMT
    Mickey-Trickle-down theory is the Reagan-era meme referring to supply-side economics, where supplying tax cuts encouraged business to supply more goods and services.


    Yes and no. You miss the point. Again. How does business supply more goods and services? IT HIRES MORE WORKERS AND BUYS MORE SUPPLIES. It does not just create them out of thin air. Cut business taxes and taxes on the wealthy and they invest in businesses. With that money, businesses can grow. Growth is good. With more available capital, businesses grow, when they grow they hire more people, when they hire more people, more people are employed (duh), employeed people have money to spend. They buy things.

    Take a minute and think about it.

    Oh well....you can only do what you can do.
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    Sep 26, 2008 5:07 AM GMT
    OK, I didn't invent trickle-down theory. Don't be angry with me for describing it accurately.

    You want your old example to be the New Trickle Down Theory. Have fun with that, but economists will laugh you out of the room.
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    Sep 26, 2008 5:17 AM GMT
    Triggerman saidSounds good. When can I default on my loan to get a piece of this action? I have a loan payment to make tomorrow. Should I hold off?


    Or.....

    I happen to be a business owner....

    Can I have total disregard for fiscal responsibility and ask the taxpayers to bail me out???

    I wouldn't need 700 Billion!

    But I am sure I could use credit to give myself some major bonuses and other benefits that would run my company into the ground.

    And, well, then I would just use taxpayers dollars to give myself and everyone else a nice golden parachute....

    Yeah.... that's a good idea???

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    Sep 26, 2008 5:22 AM GMT
    No, I did not invent it, either. Nor did I name it. It is a simple dictum that has worked for years and years.

    Anyone that has ever owned a business sees it day in and day out. Maybe not the hourly workers, but a room full of business owners would agree with me, and they do on a regular basis.

    A roomfull of economists? Maybe not. But since economists rarely agree with each other, from Keynesians to supply siders, I guess that is not saying much.
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    Sep 26, 2008 5:22 AM GMT
    Triggerman saidHow does business supply more goods and services? IT HIRES MORE WORKERS AND BUYS MORE SUPPLIES. It does not just create them out of thin air. Cut business taxes and taxes on the wealthy and they invest in businesses.
    How does a business make money without sales? A business relies on its customers, "demand," to pay their bills, to create a profit.

    Supply-side economics, to which you're referring (erroneously), was about the presumption that creating a product pushed the demand, as well as pushing the demand for other like goods or services.

    Demand-side economics deals with improving the buying power of customers (who could be you--think about it for 45 seconds) to increase demand on existing or possibly new products and services.

    In reality, both are used: demand-side to buoy the economy, supply-side to incubate innovation.

    Your own example is demand-side. Stop patting yourself on the back. It's you buying one fucking yacht or 400 immigrants buying 400 cellphones. It's the same fucking thing.
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    Sep 26, 2008 5:24 AM GMT
    Bryan-

    Well said.
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    Sep 26, 2008 5:30 AM GMT
    Ok-

    I will not resort to name calling. I will let that be your arena.

    You-
    Demand-side economics deals with improving the buying power of customers (who could be you--think about it for 45 seconds) to increase demand on existing or possibly new products and services.

    ME- How, exactly, do you do that? How do you improve the buying power of customers? Think about it for 45 seconds or as long as you want.
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    Sep 26, 2008 5:41 AM GMT
    hardcanadian saidHmmmm. Great idea, lets give the bail out money to the populus who created the problem by borrowing to live way beyond their means. Definitely a real bright one, extend more credit to the group that created the mess by living on credit. Its so circularly delicious it just might work!



    Hmmmm....

    Then, Corporate America should get the loan because they deserve it more?

    Because Wall Street was more responsible and didn't overextend themselves fiscally?????

    AIG should get the loan because they purchased the bad loans?

    Is the logic that if you are big, you are better?

    I think I get it?

    Those silly working people!

    They took out loans they couldn't afford by tracking down lenders that keep such a low profile. Those lenders weren't trying to push loans down those working people's throats!

    Those working people only got their loans by wrestling those weak, unsuspecting, honorable lending agents down to their knees and forcing them to give them the cash.

    And, still, the angelic lender made absolutely sure the terrible borrowers met the requirements for the loans and the borrowers understood everything fully, without question, before the lenders offered the borrows the deal of a life time.

    Then the gracious lenders took those loans and sold them to the benevolent corporate giants.

    In their defense, the lenders wouldn't have done that if they weren't licking their wounds from the beating they took from the awful borrowers.

    And the saddest part of the story.

    Again, the burden lands on the poor unsuspecting, hardworking, honorable, philanthropic and generous corporations that make up Wall Street.

    Thank you.... I think I understand....

    PS - Love the way you used the word "delicious"... fun :-)