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DPChallenge Forums >> Rant >> Another 800 Billion
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11/25/2008 01:06:32 PM · #1
800 Billion Stimulus Plan

They're going to buy out debt and make more money available for borrowing to consumers. Isn't this going to stimulate more debt and more bailouts? There's something I do not understand about all this money being thrown around. Will someone please explain it to me because I fail to understand how this will help people stay out of debt. Is the US economy and the global economy for that matter, based on borrowing and paying interest perpetually? Is this what economy means in today's world?

If everyone paid down their debts, would this plunge economies worldwide into a panic state because not enough money is being paid in interest fees? Are economies based solely on debt? It sure looks like it.
11/25/2008 01:18:09 PM · #2
Yes, because obviously the problem is people are not using credit cards, home loans and second mortgages enough!
11/25/2008 01:41:02 PM · #3
isnt this what the government did right after we became a country? the government bought out all debt of the states to keep the rich people in debt to the government, right? is that a relevant comparison to today?
11/25/2008 01:59:29 PM · #4
Originally posted by LoudDog:

Yes, because obviously the problem is people are not using credit cards, home loans and second mortgages enough!


Apparently.

I was hoping the good from all this would that we change into a sustainable society. Oh well.
11/25/2008 02:06:30 PM · #5
Historically, you should look at what Herbert Hoover did at the beginning of the G. Depression, before it got really bad. He tried to balance the budget, which basically slowed the economy to a standstill and made things so much worse and caused the pain to last just that much longer. We have deficit spending for a reason (No, invading countries and starting the global equivalent of a bar room brawl isn't it). It should be used to stimulate the economy or to recover from a disaster.

It's like having a credit card that you use responsibly, if your car breaks down and needs a new transmission that you can't afford, you use the credit card and pay it off when you can. You don't stop working because you don't have the cash to fix your car. Assuming that you need your car to commute.
11/25/2008 02:40:45 PM · #6
Originally posted by Jac:

Are economies based solely on debt? It sure looks like it.


Modern Western economies are. The idea is that they borrow money, then use that money to make more money than it cost to borrow, and take the profit. By borrowing lots of money, they "leverage" the returns.

Third world and emerging economies cannot make money as efficiently. The best way for them to make money is to lend it to the Western economies.
11/25/2008 02:57:36 PM · #7
Any news on rate drops? I'd love to see 4%.
11/25/2008 04:31:47 PM · #8
Wow! It's a damn good thing they haven't given the auto companies that 25 billion in loans. That could have broken the budget on top of the 700 billion and now 800 billion being thrown so easily around. :-/
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