With all of the money they are handing out to all these failing businesses...what if they had just divided it up between all the Adult American families?
I know I saw some where there was a forward along these lines which was really just to prove the point that no one really looked at the numbers or took the time to do the math.
Would it be feasible to give out the money they've given to the banks and the car industry to the people?
If we paid off our homes, or bought new cars with it would that in turn stimulate the economy as needed?
Or would it just be a dumb idea, waste of time or create more problems?TIP:
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The banks and financial institutions got money at the end of last year because without it there would be no lending. Banks and other institutional lenders had so lost faith in the ability of others to be good for the debt that they just stopped pretty much stopped lending money. That threatened not just home-buying, student loans, car buying, major appliance purchases and the like; it also threatened the entire manufacturing, payroll, and retail system.
Many businesses take very short-term loans (known in the industry as "commercial paper") to buy inventory and make payroll. Just farmers who take out loans to buy seeds which they pay back when they sell their crops, many manufacturers take out short-term loans to pay suppliers while they await payment for goods delivered. Ditto payroll. No bank loans, the system grinds to a halt, tens millions of people are thrown out of work. And this was not just a U.S. problem, but one that had hit financial centers throughout the globe.
Ditto the money to the car manufacturers. If they don't have money (GM today, Chrysler REAL SOON NOW and Ford maybe/probably in a few months) they won't be able to buy parts or pay their workers, and so will have to at least temporarily shut down production.
In the long run, yes, getting money to people to actually make the purchases needed to keep the economy running is a good idea. But in the months it would take to distribute this money (remember how long it took to get all the stimulus checks out earlier this year?) the damage done by the system grinding to a halt would be largely irreversible.
With the car manufacturers, especially, the money will be spent right away, which will help to stimulate the economy (or at least keep it going). Our stimulus check went almost exclusively to paying down debt, which didn't do much for the economy in the near term, just put us in a better position to potentially pend at a later date.
This isn't the only possible answer, but it's the only one I've got.
My thinking on the car companies is all over the place. Even if they get the money today..no one is still going to buy the cars that are sitting in the lots? So why should they make more, if you can't sell what you have now? Unless of course, they are going to make 10k and under cars that people might consider. I don't see to many people running out to buy them in the next few months.
So my thinking on the cash was, it helps move the cars and create money, or maybe pay off your house an spend what you'd pay on the mortgage on other things.
These of course are all just thoughts and opinions. Things that bounce around my brain because it never seems to shut off. I just think there has to be a better way. Did Citigroup really need their bailout, if 400 million of it was spent to name the NY Stadium the Citigroup Stadium? Shouldn't it have been put to better use?
These are questions because to me it's bad spending, but then, there may have been some logic to it that I am not aware of.
Thanks for the answer, it makes sense. I just have so many questions and I feel like no one "in charge" is really giving me any answers that I need.