$1.2 Trillion Lost in Market Value Over $700 Billion Bill

September 29, 2008 at 4:55 pm | Posted in American politics | 16 Comments

This article makes a great point. When arguing over a bill worth $700 billion, it should be noted that because of failure to pass that bill, $1.2 TRILLION was lost in market value. That means that the United States of America’s economy lost $500 billion MORE just because of this vote than they would have if Congress had voted for the bill.

Silly, stupid Republicans.


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  1. Nevermind the myriad Democrats that wouldn’t vote for this blatant hand-out to Wall St.? I’m glad it failed. Let’s take our lumps now instead of making our grandkids pay for our fiscal irresponsibility. Insulating investors from risk is NOT MY PROBLEM. Doing so only encourages them to do it again.

    I say dry up the credit. We need to learn to live within our means instead of being self-absorbed, selfish brats who think we should buy whatever we want with someone else’s money. Punish those who made poor financial decisions and let those of us who wisely paid off our debt go about our business as usual.

  2. 40% of Democrats voted against the bill.

  3. Jesse,

    My only problem with this is that the Bush administration waited until the last minute to throw this on the American people. It’s his style. It is horrendous governing. He’s tried to put a nice light on his legacy in his second term (still terrible) but this should snuff that light right out. He will be known as the president that let America’s economy collapse. He will be far worse spoken of than any other president in our history.

    That said, I prefer to keep our economy going, frankly. If we allow our economy to collapse, we will no longer be at the top of the world, and countries like China (who is currently owning a lot of our debt) will be in control and will dominate our lives.

    There are other, more important priorities than getting our country to live within its means. Those priorities should not be sacrificed for that principle.

    Remember, a strong economy means a strong nation that cannot be attacked easily. If we weaken our economy, we also will inevitably, inexorably, weaken our military capability.

  4. truther,

    They did indeed. But where was McCain and the Republican leadership getting the Republican votes they promised. Failed leadership. At least Democrats were able to get a majority to vote for a Republican bill. Where were the Republicans? Or was this a matter of Lucy pulling the football out from underneath Charlie’s foot again?

    Failed Republican leadership. Par for the course.

  5. Not necessarily. A third of the daily losses had already taken place before news of the bill’s failure. And the decline in the markets from May to July was three times as big as today’s drop.

    Just to say that things are a bit more complicated than just comparing the two numbers. Not trying in any way, of course, to excuse the monumental stupidity of the great majority of people in the financial industry and in politics, as well as recent homebuyers who put themselves on the hook for way more than they could afford.

    The sad part about the bailout failure is that most of the money would eventually have been recouped anyway. Now, unless something happens fast, people are going to experience a very unpleasant freezing of the credit markets, and anyone who thinks that they won’t be affected simply because they have paid off their debts will be surprised.

  6. Bill,

    True, a large part of the loss happened before the vote. We’ll see more fallout in the next couple of days. I don’t think there is any good news that might lift stocks tomorrow or Wednesday. Thursday, they’ll be back at creating another bill.

    Frankly, Democrats should create a bill of their own that is progressive in nature and protects taxpayers.

    Furthermore, they need to get in this bill a provision to protect homeowners by allowing bankruptcy judges the ability to restructure home loans.

    I never understood why banks would not find it in their best interest to help homeowners pay off their mortgage rather than lose that amount in foreclosure.

  7. I’m glad the bill failed. The trillions lost can be gained again. This bill is saying to the American people, “Just put 700 billion in the bag and noone gets hurt.” Let the bill fail and we will keep plugging along. There are a lot of smart people out there who have thought of much better alternatives to keeping our economy afloat through this crisis. This bill is opposed by hundreds of academic economists (you can see their letter over at my website if you’re interested). I will be thrilled if this bill never passes. The rich love their riches too much to watch them go down the drain. They will keep the economy afloat by their greed… the same greed that brought us to this crisis will keep us afloat. If not, then Revelation chapter 18 is upon us. Who then can hold back the hand of the Lord?

  8. Dan: This bill has to have the debt financed from somewhere. And the Chinese have shown a willingness to loan us more and more money. I consider that to be more of a direct threat to our nation than a temporary economic slump. Don’t forget that the Great Depression was caused by Congress choosing to overact, something we’re seeing in spades right now.

    The crash of ’87, however, was a relatively short period of pain; the market was up for the year and reached its previous high within 2 years. The moral of the story is that we’ll be fine when we do nothing.

  9. As proof that we shouldn’t overact, the DJIA gained back almost 500 points so far today. I’m not betting that we’ll see headlines about the market gaining a few hundred billion today.

  10. Congress overacted during the Great Depression? If I am not mistaken, most economists and politicians at the time were all for “hands off!” the market. I believe that Congress UNDERacted, resulting in the Great Depression.

    This isn’t a temporary economic slump we’re talking about here, Jesse. We’re talking about something far far worse. And I believe I heard a report that Chinese banks were told not to deal with American banks for a while.

    By the way, what’s with the market crashing when Republicans are in power…


  11. As for the DJIA’s gains today, don’t worry, it’s not a sign of things improving. Merely bargain hunters thinking they can get a good bet right now. They will be sadly mistaken unless Congress acts.

  12. This article describes the situation very well. At least as I understand it. Now maybe someone can describe it better.

  13. The U.S. Treasury stands to profit around 100 bil on AIG alone and would profit multiples of that on the 700 plan by securing U.S. citizens’ failing credit.

    The “bailout” isn’t that at all. It’s basically a grace period for banks and borrowers (banks are huge borrowers- your checking/savings) to get their assets and liabilities worled out so that they can produce the value (foot the bills) that they are supposed to have (in mortgages and investments).

    Wall street big wigs are not being rescued as much as average Americans.

  14. It’s time for a year of jubilee. All debts get cancelled, everybody gets to start over.

    Or, we can all be a bunch of selfish people and watch everything crumble to the ground around us. There is, as the scriptures say, enough and plenty for everybody. Why we insist on this silly scorekeeping game to try and put everyone else under our thumb is beyond me.

    None of the other life forms on this planet need money to survive. I don’t see the ants passing around little green pieces of paper with pictures of their founding fathers on them in order to keep anthood alive and well.

    What makes human beings so stupid that we can’t find a way to do without it as well? Is there going to be money in heaven? Does God have to keep some kind of an economy going in order to make the angels happy and fulfilled? Is that what heavenly society is going to be like?

    As I recall, the prophets have continuously tried to get us to focus on everything but money, to be of one heart and one mind. Money and all the attendant nonsense that goes with it isn’t going to bring about Zion. Before the second coming, there are going to be some necessary changes made. Our overriding faith in the economy, to my understanding, is a big one.

  15. Shoot, Mark N., I’m gonna get naked right now and chase down some hapless cat for dinner…

  16. I am delighted that Tiger Woods is back playing. It makes the game exciting once more.

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