So...

[madscience]

Fannie Mae and Freddie Mac are collapsing, just as I predicted, and Bush wants to prop them up with our tax dollars, also just as I predicted... potentially tens hundreds of billions of our tax dollars

Comments

[biggingerdave]

I seriously can't believe that as capitalists, they're even contemplating the idea of baling out the companies (either side of the Atlantic) with public money.
If they collapse, then someone will buy their debts (at a lower price, of course) and proceed to make money out of them. That's just how the system works. I think the best we can hope for is a very expensive "I told you so" when it eventually goes the way of the pear.

[madscience]

Capitalists only believe in free enterprise when it suits them. Big business never turns down subsidies.

[drbunsen]

Spell this out a little for me if you please: if they collapse, who and what goes down with them? If they are purchased, who benefits and who pays? Is it merely delaying the inevitable and making it worse when it does eventually come, like loosening your brake shoes to get rid of that annoying grinding sound?

$200 billion would buy a heck of a lot of a/ greenhouse gas abatement b/ social housing. But then socialised anything seems to be a dirty word these days.

[madscience]

The short-term effect of a bank collapse would be a huge chill on investments, which would hurt the real (productive) economy, probably resulting in lower wages and higher unemployment in all sectors. The long-term effect would depend on what we do about it. If we let the government bail out the banks with our tax dollars, it'll slow recovery as money is siphoned from the real economy via taxes and pumped into the coffers of economically incompetent and/or malicious bankers. If we let the banks die and make their business model illegal, the economy will bounce back stronger than it ever was.

[drbunsen]

Here's an alternative way to spend $100bn

$100 billion could yield two million 'green' jobs

[madscience]

Or five million of my green job. :D