US News
US Senate passes financial bail-out plan
Oct 2, 2008, 3:19 GMT
The US Capitol building in Washington, DC, USA is pictured on 01 October 2008. The US Senate approved a 700-billion-dollar financial rescue package Wednesday night that members said was essential to keep the world\'s largest economy from near-total collapse. EPA/MATTHEW CAVANAUGH
Washington - The US Senate approved a 700-billion-dollar financial rescue package Wednesday night that members said was essential to keep the world's largest economy from near-total collapse.
Senate leaders hoped the 74-25 vote would send a strong signal to the lower House of Representatives, which rejected an earlier version of the bail-out plan on Monday and sent US stocks into a free-fall.
'We have sent a clear message that we will not let this economy fail for any American,' said Majority Leader Harry Reid, the top Democrat in the Senate.
Government officials and congressional leaders had warned that government intervention was critical to keep credit flowing from banks to average Americans and had warned that the US economy might not survive another legislative failure.
The House on Friday will take up the new version, which was hammered out between Democrats and Republicans over the last two days and was hailed as a show of bipartisanship in a time of crisis, despite a general election being only one month away.
President George W Bush praised Senate members for working across the aisle to pass legislation that was 'essential to the financial security of every American.'
It remains unclear whether the new bill, which increased government-backed guarantees on bank savings and added tax provisions to placate skeptical Republicans, is any more certain of passing the House on Friday.
'The American people expect and our economy demands that the House pass this good bill this week and send it to my desk,' Bush said in a statement following the vote.
Democratic presidential nominee Barack Obama, who returned to the Senate for the vote along with his Republican rival John McCain, warned the bail-out was needed 'to prevent a crisis from turning into a catastrophe.'
At its core, the bill involves the government taking on up to 700 billion dollars in mortgage-backed securities that have plummeted in value and decimated the balance sheets of US and European financial institutions.
Financial institutions have sharply curbed lending to consumers and to each other amid fears about their own capital positions. The credit crisis has cost banks some 500 billion dollars in writedowns, led to a series of government takeovers and caused two of the largest bankruptcies in US history - Lehman Brothers Holdings Inc and Washington Mutual Inc.
Automakers Wednesday reported sharp drops in US sales as consumers found it more difficult to get approval for car loans. According to an analysis by CNW Marketing Research, the approval rate for car loans is down to 63 per cent from 83 per cent last year.
Democrats who control the Senate and minority Republicans were forced to work on a new deal after the House's 228-205 vote against the rescue package on Monday. That bill was itself the product of nine days of tough negotiations between Congress and White House officials.
Monday's defeat in the House was followed by one of the largest drops in Wall Street's history and stock markets worldwide. Markets rallied Tuesday and traded only slightly lower Wednesday as investors awaited the outcome of the evening Senate vote.
Supporters on both sides of the aisle urged their colleagues to pass the latest rescue package, insisting it contained enough guarantees to protect taxpayers and should not be viewed as a no- strings bail-out of Wall Street investors.
'If the financial bill fails in Congress yet again, the present crisis will turn into a disaster,' McCain had warned earlier Wednesday.
A Washington Post-ABC News poll Wednesday showed that most Americans believe there is a financial crisis, with about 90 per cent concerned that Monday's failure of the bill could prompt further decline. Still, just 45 per cent supported the House version.
Supporters took pains Wednesday to frame what began on Wall Street as a threat to average Americans, endangering the availability of credit for everything from houses to cars to student loans and small businesses.
Senator Dianne Feinstein, a Democrat from California, acknowledged she had received 95,000 messages from constituents about the bail-out package - 85,000 of them negative - but warned that 'we don't have a choice.'
But it also ran up against opposition from senators who believed taxpayers should have no part of a crisis that was brought on by Wall Street investors - reflecting some of the ideological divisions that torpedoed the legislation in the House just days earlier.
'This bill sends a message to Wall Street that if you play fast and loose for short-term profits, then the government will actually make up for your losses,' said Florida Senator Bill Nelson, a Democrat.
Among the revisions added to the Senate legislation were an increase in government-backed guarantees for bank deposits from 100,000 dollars to 250,000 dollars. The increase will last one year.
Also included are extensions of tax credits for renewable energy and small businesses as well as changes to the Alternative Minimum Tax that hits the incomes of middle-class Americans.
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Older Talkback
page: 1
I bet your fart doesn't stink as bad as this bailout Bill.
wow...you must be rich to afford a tax increase of approximately 5 thousand dollars! no wonder you don't care.
I think he's like most of us, and he doesn't give a rats ass anymore. This country is out of touch with it's people.
More debt for US TaxpayerOct 1st, 2008 - 22:57:47
The national debt was about $0.7 trillion when Bush took office in January 2001. Today, after almost eight years and a couple of wars, the debt has risen to about $10.02 trillion.
And, by the way, that figure might rise another $1 trillion or so before Bush steps down on Jan. 20.
The national debt ceiling today is $10.6 trillion. Treasury Secretary Henry Paulson wants Congress to raise that to $11.3 trillion to clear the decks for massive borrowing to deal with the nation’s financial crisis.
A national debt of $11.3 trillion would come to more than $37,000 each for every man, woman and child in the United States.
And all this comes during an era of allegedly conservative, fiscally responsible Republican domination in Washington.
In other words
if the US was a business,
it would now be BANKRUPT.!!!!!!
U.S. NATIONAL DEBT CLOCK
The Outstanding Public Debt as of 02 Oct 2008 at 07:08:00 AM GMT is:
$ 10,028,540,450,563.99
The estimated population of the United States is 304,832,620
so each citizen's share of this debt is $32,898.51.
The National Debt has continued to increase an average of
$2.76 billion per day since September 28, 2007!
Concerned? Then tell Congress and the White House
These figures DO NOT include the $700B Bailout bill which has just been passed and will shortly be added on and will raise each citizens total to $37,000 + ?
is a provision that would raise the statutory ceiling on the national debt to $11.315 trillion. It’ll be the SEVENTH time the debt limit has been raised during Bush's administration, a world record for any President. In fact it was only just two months ago, on July 30, that President Bush signed the Housing and Economic Recovery Act, which contained a provision raising the debt ceiling to $10.615 trillion.
is a provision that would raise the statutory ceiling on the national debt to $11.315 trillion. It’ll be the SEVENTH time the debt limit has been raised during Bush's administration, a world record for any President. In fact it was only just two months ago, on July 30, that President Bush signed the Housing and Economic Recovery Act, which contained a provision raising the debt ceiling to $10.615 trillion.
Considering the enormous debt of the USa this crisis could have been turned into a good opportunity for the White House to clean up the mess and at the same time lay the foundation for an intelligent policy to bail theaverage taxpayer out of this crisis in a foreseeable short term .
THe measures to be taken wouldn't have to be complicated at all to solve this crisis .The government buying share from the troubled banks at their current value ,giving them a 49,9 percent stake in those companies,together with a majority board administration ,control and auditing rights ,a taxation of stock market gains that are made on transactions that are on shorter terms than two years,and a smaller tax on other capital transactions would shift the burden from the average joe to the stock market tycoons .If your governmnt had obtained sheres in those banks they would easily make a huge profit later when the crisis is solved ,worth a few trillions of dollars .So why is this not happening ?
One reason being the aversion of conservative republicans for anything that limits free trade,even at the cost of missing such great opportunity to clearing the state's deficit oin a time lapse of a few years whilst shoring the financial market with state backed guarantees.
One economist predicted this risis in the smallest details in 2005,Nouriel Roubini,I have to gve him credit for that,he was one of the very very few.
His comments on the current solution proposed by Paulson are worth reading .It shows the money asked by Bus will not solve much:
www.guardian.co.uk/commentisfree/2008/sep/18/marketturmoil.creditcrunch
A bit more from Roubini on this crisis:
Roubini began studying these countries and soon identified what he saw as their common weaknesses. On the eve of the crises that befell them, he noticed, most had huge current-account deficits (meaning, basically, that they spent far more than they made), and they typically financed these deficits by borrowing from abroad in ways that exposed them to the national equivalent of bank runs. Most of these countries also had poorly regulated banking systems plagued by excessive borrowing and reckless lending. Corporate governance was often weak, with cronyism in abundance.
unquote.Now tell me if this does not apply to the current Bush administration ?
Your country has been looted for a decade by big corporate business.Investment banks borrowed without any restraint,some of them have debts that total 60 times their own assets .Tis insane situation has been allowed to continue,even now the solution proposed by Bush does not include the remedy needed to solve the crisis,it will only transfer money from the taxpayer to the bankers.
The Richer get Richer while the Taxpayer gets Poorer and Poorer because thats whose paying increasing debts.
i kinda like bush now that his reign is almost over.
then i will like the son-of-bitch more.
then i will love him if i see his obituary on the news.
The official youtube broadcast of the American Republic State of the Union Address and the release of the American Republic policy platform will be announced after the elections of November 4, 2008.
This no doubt will be an historic event, ushering in a new era of government for America. Americans will finally after 200 years be able to make an honest choice based on true and honest promise. Resolve will be the order of business for America of its differences, ignorance, prejudices and fears. Americans will finally be able to live a life of prosperity, but only after sincere commitment.
There is no doubt that you are a raving lunatic. you must be a disgruntled republicant to be of such an unsound mind.
..the dems could have inserted almost anything they wanted, and Bush would have signed about anything offered him, so if it is not there, do not blame the republicans. After all, the dems control congress...supposedly....
Another chestnut in all this:
Enron executives were tried and convicted for the same thing the Fannies and Freddies did and they are still walking free....go ask your dem congress about that.
Both parties are just as guilty and if you hadn't noticed, it was mostly Democrats who supported this bill and mostly Republicans who opposed it.
Although as I always say, both parties are criminal.
Vote third party - it is the only sane option. We have to break out of this 2 party strangle hold that the corporations have.
No other civilized country on earth has only 2 parties.
But to vote either Democrat or Republican is just wrong at this point.
the average income is $60,000 where I live and yet the average home even with all the declines is still over $500,000.
A house is supposed to be 3 times your income so that would be $180,000.
Something is still massively out of balance and it is still a huge bubble.
And then there is the underlying problem that capitalism is dead and growth is unsustainable
And with the passage of this bill the United States of America will come to an end, and along with it nearly 250 years of freedom, democracy and culture to bestow upon the world. The U.S. is nearly bankrupt and this proposed bill now proves it, as it essentially borrows from one credit card to pay for another. Any financial expert worth their salt will tell you once you get in such a death spiral there's no way out, and with Trillions of dollars in debt the surviving superpower is teetering on the verge of collapse.
The irony of it all is the very capitalist doctrine the system helped to construct, one of concentrating wealth in the hands of the elite and few, is the very system that has been its ultimate demise. The fall of the corporation and its 'wall street' is just the beginning; Marx was correct in that given time such concentrated systems become too unwieldly and thus eventually implode upon themselves from their own weight.
Rebirth of a nation however can be a good thing, although it might likely take the form of 'People's Republic of the U.S.', since China is the primary creditor of the U.S. and will likely be paid back in the form of land grants, the only real asset the U.S. has remaining. I wouldn't count anything out at this point.
Helloooo SP4,I 've told you before:the GOP held the majority in Conress in 2003,so how can you possibly blame the democrats ?You never even answered to that,just continue to post your nonsense .Only one moth ago you told everybodu on this forum that the economy of the US was going through the roof and all rumours were just libnazi propaganda aiming to smear the fantastic achievements of your icon Bush.Since when do you agree there is a crisis ?How come the responsibility for the economy shifted from the GOP to the democrats ?You have a problem with understanding your own literature ?
The following at least 5 times. It is high time that M&C blocked this spammer. Speaking of high times, how many times have you hit the bong today, EssPee drug addict?
This was preventable. ... Ad nauseum to the end...
...” Mr. Watt said.
in my life time i never hoped that i would see a guy like BUSH COME OUT IN THE OPEN AND BLATANTLY TELL THE PEOPLE, ILL GET YOUR MONEY AND GIVE IT TO THE RICH BIG BOSSES AND FRIENDS OF MINE, NO MATTER WHAT YOU SAY, OTHERWISE YOU WILL LOOSE EVERYTHING!
this was beyond my wildest imagination, who would think a month ago that he would get soooo desperate, its just so cool............:)
its just so honest, and all the little rats dems and reps would gather together, pretending at first that they would not agree only to actually pass it for all the people around the globe to watch!!!!!!!
its amazing, THINGS MUST TRULLY BE FAR WORSE THAN THEY LET OUT THE PEOPLE TO THINK FOR THEM TO BE SOOOO HONEST AND DESPERATE.............THINGS MUST BE FAR WORSE THAN ANY OUTSIDER CAN EVEN IMAGINE, COULD IT BE THAT SOMETHING REALLY!!!!!!!! REALLY!!!!!!!! HUGE IS FOLLOWING????????????
WOW, IM SOOOOOOO CURIOUS TO SEE!!!!!!!!!!!!
SP4 has repeated this same post over and over and over and over and over and over and over and over and over and over and over. (11 times).He's still stuck in the same old groove.
Moderater PLEASE put a sock on SP4 .
PLEASE.
Thank You.
Is the fact that his icon, G.W.Bush, is the most unpopular man in the US and the WORST President in history.
The sooner he is gone the better.
God help the next President, who will unfortunately have to inherit Bush's legacy of collosal debt and war.
I wish him well.
''The reality is we're in an urgent situation and the consequences will get bigger each day we do not act'' he exclaimed. He went on to say, ''Oh and by the way, there's nothing wrong with the economy because this is America and I'm the president of everybody. Say, does anybody have an extra 700 billion dollars they could loan me interest free forever?''
i will say one thing about sp4.
he is without a doubt the most stupidist person i have ever seen.
3 cheers for stupid
Roubini,
never heard of him until now. Checked up on Search. Interesting guy with a clever no-nonsense view. Thanks Tonny, i'll keep an eye on him.
That was SP4 going down the pan....
again
lol.
Why all the hate for SP4??? This proves SP4's posting all the more valuable. If one person can upset soooooo many that they can't talk to the issue but only against SP4. Liberal moodiness I guess...
page: 1
The senate...Oct 2nd, 2008 - 03:28:41
just passed the bill.
I just passed gas.
Guess which one is more important to me.
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