Do You Suport the Bailout?

[AVG-JOE]

The Constitution does not empower our government to control our money supply. ...

Brian

US Constitution, Section 8 - Powers of Congress

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

To borrow money on the credit of the United States;

To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States;

To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures

(Emphasis mine)

The United States Constitution - The U.S. Constitution Online - USConstitution.net

The responsibility for the money supply belongs to congress.

-Joe

 

[oreo]

Just watched a special on Fox News, October 5, 2008.

Unbelievable!

As we know, on Sept. 30, 1999 the Clinton adminstration pressured Fannie & Freddie to lower standards (credit & income) to persuade banks to loan out mortgage money to lower income people & minorities. They went as far as not even requiring down payments. (Easy money raced through our economy--thru new mortgages to refinancing). Not only were lower income & minorities getting homes they could not afford, but others jumped on the band wagon--using this money to buy vacation beach homes.

At this time--government lead by pressuring democrats wanted Freddie & Fannie (government) to back 50% of these new loans in their portfolios to be what we know can honestly say (risky borrowers.)

Wall Street bought up these mortgages in packages to hedge their capital. When housing prices fell--these risky borrowers walked out of the homes they purchased, primarily because they had nothing to lose. No down payment = no investment to lose.

In 2001 the Bush adminstration warned that Freddie & Fannie may be getting out of control. Then again in 2003 the Bush administration brought new legislation in to reign these agencies under control. Then again Allan Greenspan warned. Then in 2005 John McCain sponsored a bill to get tighter regulations on these agencies.

So who blocked these several new pieces of legislation that would have saved us from this 700 BILLION DOLLAR bail-out.

Every time a new piece of legislation was brought up to the banking/finance committee. Every democrat on the board would vote against new regulation, every republican on the board would vote for it. This happened at least 3 different times during the Bush adminstration.

NAMES MENTIONED: Democrat Criss Dodd--democrat Barney Frank--democrat--Charles Schumer whom were adamant that Fannie & Freddie needed no stricter regulations. Criss Dodd being the # 1 donor receipiant of Fannie/Freddie--Barack Obama being the # 2 donor receipiant of Fannie/Freddie.

ACORN--whose sole purpose was to go into banks & scream discrimination--was also a player in this. BTW--Barack Obama is connected to ACORN--& was actually this agencies attorney in his Chicago community organizing days--whom also promoted loans given to people who could not pay them back. (Note that the first bail-out bill that house republicans defeated had $20 BILLION dollars going to ACORN). This outraged them. ACORN is also currently under criminal investigation in several states for voter registration fraud.

There is absolutely no doubt in my mind--who is to blame for this financial crisis. The party who started it, the party who ignored it, & the party who voted several times against any new regulation to reign these agencies in. Democrats

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[Kevin_Kennedy]

Of course Fox news is going to blame the Democrats. It's the fault of the Federal Reserve.

 

[editec]

Read up on the Roman Empire, and how they handled their monetary policy. We handle ours almost EXACTLY the same way. And Rome fell via economic collapse.

Now that sounds like an excellent read.

Got any titles for me, Paul?

I've never read anything about the Roman empire that was specifically focused on its trade and economy and I'd enjoy knowing more about it.

 

[editec]

This is quite possibly the most ridiculous proposal I have ever seen. Do you understand anything about how a free market should operate?

Brian

Specifically why do you think that the government shouldn't take over the monetary supply, Brian?

If the problem of controlling the money sypply fundamental to government, or is the transition from what we've got to a REAL federalized system just too difficult, now that we're structured into this private banking system?

As we have seen over and over again, the private banking sytem we currently use tends to inflate money faster than goods and services, so what is the benefit of using this private banking system which is erroneously named the Federal Reserve system?

 

[gonegolfin]

(Emphasis mine)

The United States Constitution - The U.S. Constitution Online - USConstitution.net

The responsibility for the money supply belongs to congress.

-Joe

"To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures"

The above has absolutely nothing to do with allowing Congress to control the money supply. It has everything to do with ensuring that the money supply cannot be tampered with (whether it be a central bank or Congress).

Coining money is the act of taking gold and/or silver bullion to the mint where it is manufactured into coin form. It had no impact on the supply of money.

Brian

 

[gonegolfin]

Specifically why do you think that the government shouldn't take over the monetary supply, Brian?

If the problem of controlling the money sypply fundamental to government, or is the transition from what we've got to a REAL federalized system just too difficult, now that we're structured into this private banking system?

As we have seen over and over again, the private banking sytem we currently use tends to inflate money faster than goods and services, so what is the benefit of using this private banking system which is erroneously named the Federal Reserve system?

Because the end result would be the same, just a slightly different means of achieving those results. I do not want the government to control the money supply because this would be the fox guarding the hen house. And to allow the government to set interest rates, instead of the free market (the supply and demand of money), is simply ludicrous. It is easy enough for the government to engage in deficit spending with the existence of the Federal Reserve. Imagine if all they needed to do was vote to create new money for their spending wishes. And to cut interest rates themselves when they decide they need to boost the economy. We have already seen how they would make such decisions via the vote on the bailout legislation.

Brian

 

[AVG-JOE]

"To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures"

The above has absolutely nothing to do with allowing Congress to control the money supply. It has everything to do with ensuring that the money supply cannot be tampered with (whether it be a central bank or Congress).

Coining money is the act of taking gold and/or silver bullion to the mint where it is manufactured into coin form.

Brian

Coining money is adding to or subtracting from the money supply; although the US mint was under the administration of congress prior to 1913.

Regulating the value of money is, by definition, setting interest rates.

Until 1913 and the invention of the Federal Reserve, congress performed both functions. The banking industry didn't like congress setting interest rates and printing money because of inflationary pressures they saw as arbitrary, that is why they (bankers) used their influence to get congress on board with The Fed.

-Joe

 

[Ravi]

Yep. I think Joe nailed that one.

 

[AVG-JOE]

Because the end result would be the same, just a slightly different means of achieving those results. I do not want the government to control the money supply because this would be the fox guarding the hen house. And to allow the government to set interest rates, instead of the free market (the supply and demand of money), is simply ludicrous. It is easy enough for the government to engage in deficit spending with the existence of the Federal Reserve. Imagine if all they needed to do was vote to create new money for their spending wishes. And to cut interest rates themselves when they decide they need to boost the economy. We have already seen how they would make such decisions via the vote on the bailout legislation.

Brian

Brian,

In theory, your vote is supposed to be guarding the fox herd.

Don't assume that because government has not been responsive to your concerns these past few decades that this is the way the framers intended things to be.

-Joe

 

[user_name_guest]

4 yes, 20 no. We already know where this is heading to.

 

[gonegolfin]

Coining money is adding to or subtracting from the money supply; although the US mint was under the administration of congress prior to 1913.

Coining money (from Gold or Silver) did not affect the money supply. Coining was the simple act of manufacturing gold or silver bullion into coin form. You are confusing our once gold/silver standard currency system with our current fiat system.

Regulating the value of money is, by definition, setting interest rates.

No, it is not. It is specifying the weights and measures of precious metal in the nation's money and regulating the exchange rate between gold and silver. This had nothing to do with setting interest rates. The free market (the supply and demand for money) determined interest rates.

Brian

 

[gonegolfin]

Brian,
In theory, your vote is supposed to be guarding the fox herd.

We see how well that has worked, have we not? The passing of the bailout proposal and all of the recent bank bailouts is a perfect example. As is the continued deficit spending since the 1970's. It was undisciplined spending by our government that forced us off of the Gold standard in 1971. But once we were no longer subject to the discipline of Gold, our government went crazy. Congress had but indirect access to manipulating the money supply (through the Federal Reserve) and look where we are now. And you think that Congress should now have direct access to inflate and deflate our currency at its whims and determine the price of credit? Astounding.

Brian

 

[Paulie]

We see how well that has worked, have we not? The passing of the bailout proposal and all of the recent bank bailouts is a perfect example. As is the continued deficit spending since the 1970's. It was undisciplined spending by our government that forced us off of the Gold standard in 1971. But once we were no longer subject to the discipline of Gold, our government went crazy. Congress had but indirect access to manipulating the money supply (through the Federal Reserve) and look where we are now. And you think that Congress should now have direct access to inflate and deflate our currency at its whims and determine the price of credit? Astounding.

Brian

Well, at least he called it a "theory", as that's all it really seems to be anymore.

We'll see how well it works this year, how many incumbents keep their seats, and of course the fact that most of America will vote for yet another establishment goon for president.

 

[AVG-JOE]

We see how well that has worked, have we not? The passing of the bailout proposal and all of the recent bank bailouts is a perfect example. As is the continued deficit spending since the 1970's. It was undisciplined spending by our government that forced us off of the Gold standard in 1971. But once we were no longer subject to the discipline of Gold, our government went crazy. Congress had but indirect access to manipulating the money supply (through the Federal Reserve) and look where we are now. And you think that Congress should now have direct access to inflate and deflate our currency at its whims and determine the price of credit? Astounding.

Brian

You speak the truth Brian. Our government has been for sale to the highest bidder for too long and the mess we are in is a reflection of that.

So, do we refer back to the constitution or scrap it and start over?

My position in this debate has been one of preserving the constitution, but I am open to suggestions. I have also argued for a complete break up of the union into states with true sovereignty, but thus far, that is an unpalatable suggestion among a vast majority of people.

You are relatively young. You have a lot at stake. Where would you like to see this nation in 10 years?

Before you say you want private control over the money supply, think about what it would mean for the richest men in America to have the sole decision making capability regarding what capital investments are made here... your ideas will mean nothing unless they can be sold to these men.

There is a reason congress was given the responsibility for our money back in 1776.

-Joe

 

[gonegolfin]

You speak the truth Brian. Our government has been for sale to the highest bidder for too long and the mess we are in is a reflection of that.

So, do we refer back to the constitution or scrap it and start over?

My position in this debate has been one of preserving the constitution, but I am open to suggestions.

As is mine. And our initial money system after we were formed as a nation did not have our government controlling/manipulating the supply of money. That is, they could not artificially create (inflationary) or extinguish (deflationary) money.

You are relatively young. You have a lot at stake. Where would you like to see this nation in 10 years?

I would like to see us on a sound monetary system that is immune from interference from both private banks and our government. I want to see truly free markets. Credit rates should be determined by the supply and demand of money, along with risk. I want to see government drastically reduced (massive spending cuts).

Before you say you want private control over the money supply,

What ever gave you that idea?

Brian

 

[AVG-JOE]

As is mine. And our initial money system after we were formed as a nation did not have our government controlling/manipulating the supply of money. That is, they could not artificially create (inflationary) or extinguish (deflationary) money.


I would like to see us on a sound monetary system that is immune from interference from both private banks and our government. I want to see truly free markets. Credit rates should be determined by the supply and demand of money, along with risk. I want to see government drastically reduced (massive spending cuts).


What ever gave you that idea?

Brian

In a "truly free market", a bank can only be established by a rich dude. Rich enough that there aren't many of them around... better hope you don't piss one of them off, those rich dudes all talk at the country club, ya know.

"Money" is a concept based in the confidence of those willing to trade it for hard assets, not a "thing" in and of itself.

The only reason the dollar in your pocket is not just a nice, wallet size photo of a famous American is because congress says its not and we agree to accept it in trade. Probably because wallet size photos are easier to lug around than bars of gold or bushels of wheat...

Who then, should have responsibility for coining money and setting the value thereof?

It can't be 'nobody', unless we are going to start using Euros or Pesos... Canadian money is pretty... maybe Canadian?

-Joe

 

[gonegolfin]

Who then, should have responsibility for coining money and setting the value thereof?

I have answered this question. I have also stated that you are confused as to what this means. These references in the Constitution have nothing to do with the government controlling the money supply. Goods and services were paid for out of the worldwide supply of gold and silver. Congress merely enforced weights and measures in both its coinage (regulating the value as well as honest weights and measures) as well as in the exchange rate of gold with silver (and vice-versa). It also provide the service (at the mint) of taking existing bullion and manufacturing coins (coining money). This is not creating money by fiat and is thus not manipulating the supply of money.

Brian

 

[AVG-JOE]

I have answered this question. I have also stated that you are confused as to what this means. These references in the Constitution have nothing to do with the government controlling the money supply. Goods and services were paid for out of the worldwide supply of gold and silver. Congress merely enforced weights and measures in both its coinage (regulating the value as well as honest weights and measures) as well as in the exchange rate of gold with silver (and vice-versa). It also provide the service (at the mint) of taking existing bullion and manufacturing coins (coining money). This is not creating money by fiat and is thus not manipulating the supply of money.

Brian

Dude,

Look up 'inflation' in the glossary of a decent American History book. Printing money has gotten the US out of a few jams over the years, and all it cost us is inflation.

I still want to know who you envision printing (coining) the money and setting the interest rates (value thereof), if congress and The Fed are not involved. I have looked over the thread and I don't see where you answered this question. Note that the 'free market...' doesn't count - an institution or organization with the ability to instill confidence in the currency is required.

As far as the interpretation of US Constitution, Section 8 - Powers of Congress... To coin Money, regulate the Value thereof,... , we are going to have to agree to disagree on this one. To me, for good or ill, the constitution gives the responsibility to congress. I am not alone in this interpretation... the Federal Reserve is living proof - created by an act of congress.

-Joe

 

[Zoomie1980]

I don't like it. Sounds like something Alexander Hamilton would jerk off to.

The only thing that will work in the long run is a sound currency. No more paper currencies backed by nothing and valuated by artificially adjusting interest rates.

Regulation has it's place in the market, so long as its primary purpose is to prevent excess and panic and limit speculative instruments. A bank makes it's primary money by lending it's deposits out at a higher rate than it is paying depositors. I am VERY leary of allowing any financial entity that trades on top of those loans. The loans should be the ONLY financial instrument. No "mortgage backed securities". No secondary market in debt sales.

Daily trading limits. In commodities you also restrict the number of contracts so as to never have more than 10-15% of the total contract base being speculative. Basically enough to ensure liquidity and no more. This largely removes much volatility in the market by keeping a curb on raw speculation and making traders "sleep on it".

The days of complicated secondary trading instruments on Wall St is over. Investment houses are going to have to make money the old fashion way....good returns on basic investment, and fees.

And as much as I hate limiting executive pay, we are going to see a movement to pretty much eliminate or highly limit what boards can offer executives when their companies are losing money and probably nix a vast swath of parachutes. Executive pay has got to be wratcheted back to a more normal global and historical level of 25-50 times the average worker, not 275+.

And finally strict rules on loan qualifications and an end to marketing gimmicks like teaser rates and complex baloons. You charge the individual what his credit rating dictates, right up front and make them pay down whatever they have to. If the guy warrants a 20% rate, then so bit it. Means a lot of people aren't ever going to get a house, but tough. Get over it.

Until we hit the real bottom of the California real estate market, this crisis will not start to fix itself. Amazing how a few hundred thousand home sales in California and the Sun Belt in the USA has torpedoed the entire global banking system.....It's a panic now, at some time saner minds will take charge, establish the real bottom (if governments let that happen) and then we begin to recover.

As for the poll.....we had to do something as much as I hate it all. We've got to get the panic out of the market and o something to get the credit flowing again....at least to QUALIFIED borrowers.