Like a lawn mower who’s engine has stopped when pushed too fast into tall grass, the economy is completely bogging down. Putting more gas in the tank (cash to banks), changing the oil (allowing overextended banks to fail) or replacing the spark plug (electing a new president) does not get the engine going and keep it going to cut the grass. While gas, oil and spark are necessary for operation, if you want to cut the grass it is time to pull the mower out of the tall stuff (lower interest rates), yank the rope (cut payroll taxes) and wait for the mower to rev up. Then push more gently forward into the grass (while slowly increasing the taxes and interest) to make sure the motor does not stop again. After the tall grass is cut, one can start to speed up the pace and as long as the engine is kept fueled and maintained.

This is the Laffer idea in a slightly different form, lower taxes to get the economy revved up. We will not see the end of trouble for all sectors of the economy until the engine is spinning a full speed.

If the dot com companies had real profits and a viable business model, they would still be here. GM and the other Dow components are mostly still here but they have been whacked by other’s greed and stupidity. They did not force rating agencies to fabricate AAA ratings, they did not force the SEC to wave leverage limits for the big five investment banks and they did not force Fannie and Freddie into unsustainable lending practices in over heated real estate markets.

If we don’t save the core of the economy, we will only have a burned out hulk of the system left. JMUO. If you burn up the motor or run it until the piston flies through the cylinder wall, no grass will get cut until a new mower is bought. The US economic mower was not built in a day. Do you really want to let that happen. Talk about too big to fail. Look out below.

“Point of the background story. The pension is still owed to me. I’m to young to collect. Seems we live in a popular view that “promises can be broken”. For the sake of who? Imo Paper Pushers. That is our #1 problem. HEAVY in the Admin … LITE in the Field.”

do I owe you for your pension? I don’t remember agreeing to pay your pension. Quit letting your emotions get the best of you. Take your hit like a man and get back up. Life does not end with the loss of your net worth.

@BR – good info on the 80s bailout, ty.

“They may not have been perfect but their faults are highly overstated to justify leaving them on the field to die”

Should we use taxpayer dollars to resurrect all of the failed “dot-coms”…?

Neither the auto makers nor their stock holders bid the price of oil to $140 per barrel, they did not issue credit default swaps and CDOs by the billion without adequate reserves, they did not decide to pump billions into banks that don’t want to lend, they did not default on their promises to build a good product at a reasonable price under the economic conditions of the day and pay their workers a reasonable wage/benefit package so they could buy cars like all the government’s employees and farmers and teachers and firemen etc.

They may not have been perfect but their faults are highly overstated to justify leaving them on the field to die. Before we put all thumbs down in the coliseum of life, do you really think that is what they deserve? Give me a break … are/were you so much more a contributor to our system?

Are you completely nuts?

It depends on whether or not you believe that the Federal debt and deficit matter.

I am not an economist nor a hegde fund manager nor anything like that (I am an aerospace manager and dabble in the market on the side) but has anyone done the math on the $70B and what can be done with that?

What if instead of bailing out the banks or the auto industry the government just took that money and gave it to all the adults in the U.S.? There are roughly 200,000,000 people over 18 in the U.S. according to 2000 census. This comes out to $350,000 per adult.

Wouldn’t that boost the economy and preculde the need for much of the credit market anyway? Wouldn’t that be a better way to deal with this? Houses would be bought, autos would be bought, and if firms failed, let them fail and let new ones take their place.

In Barry’s words “what say ye”? Am I completley nuts? Why wouldn’t this work? Yes, I ‘ll stick to my day job.