What would happen if there is a statemate of sorts and the bailout is not approved in …?
…
say, the next week.(Just a hypothetical)-
if there is no bailout, what will happen? in other words, what is the worse case scenario. How soon will we see soup and bread lines? How many mortgagors – already on the brink of foreclosure and/or auction, will lose their homes? or are they likely to lose them whether there is a bail out or not?
Why would anyone facing foreclosure lose their homes in a financial crisis? Do you assume the banks really want more worthless real estate? That isn’t the problem and people are stupid to think so.
People are choosing to walk away from their homes, because they borrowed over 100% at the time of sale and their homes have devalued, while the ARM loan has also raised their payments.
The problem is that the entire economy is debt-based and could collapse if lenders cannot infuse cash. The issue is whether the government should have anything to do with trying to fix it (other than prosecuting the rip-off and con artists).
Frankly, I am crossing my fingers for a stale-mate to buy some time.
DAR, my biggest problem with Ron Paul is that he wants to magically wish away 50 years of global economic policy which I find wholly a dream (sad to say).
Some investors lose money (hey, it is always a risk) and a few fat-cat corporate elites get their golden parachutes. Credit becomes more difficult, but not impossible and the economy goes into a Recession (NOT Depression as fear-monger, Paulson claims)
The finance companies not bailed out will make sure consumer pain comes first in all losses to get people begging for a bailout. However, Ron Paul, who unlike the Fed and Paulson did NOT create this but warned of it years ago, is now predicting a year of pain without the bailouts or a decade of pain with hyperinflation devaluing the dollar if we do have the bailouts.
And to stop the bailouts that occurred before the Fed and Treasury even bothered going to Congress, Ron Paul has sponsored a new bill:
“Constitutional Conservative Ron Paul has introduced H.R. 2755, the “Federal Reserve Board Abolition Act“, which will repeal the Federal Reserve Act and abolish the US Federal Reserve at the end of 1 year after its passing into law.
The 1 year time frame will be a “winding down” period, overseen by the Chairman of the Board of Governors of the Federal Reserve System, who will continue to pay employees and operate day-to day dealings.
The OMB Director will begin liquidating the Fed’s assets, which will put into the General Fund of the Treasury. The Secretary of the Treasury and the Director of the Office of Management and Budget will report back to Congress at the end of 18 months.”
Sure, he’s a kook…
wait, wasn’t that because he said our economy was being looted and would implode?
Hm…
Stella, why is the renter who didn’t believe the liars and knew it was too good to be true responsible to keep that person in a home they couldn’t afford?
The homeowners WILL lose their homes. This bailout is for the big end of town. The borrowers are being told they have to take responsibility for their own actions. The theory is that although a real estate agent told them the house was worth that much, a banker told them they could borrow that much, a crooked lawyer filled in documents for them and said that’s how it’s done…….
it’s their fault and they should have known everyone else was lying.
Go figure.
And aren’t there bread lines already???
The worst thing that could happen is big investment companies that will be given money by the bailout will fail. People who invested their money with those companies will lose it and the people who work for the companies will lose their yobs.
On the plus side, though the investment market will go through a heavy downturn. New companies will arise that take a smarter approach to investing and the investment market will rebound and that won’t cost the taxpayer anything.
If there is no bailout it won’t affect people with mortages with the companies failing. If they’re already on the brink unless language in the bail pays their mortage for them they will likely foreclose.