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I don't get the revulsion towards bailouts. It isn't as if the money is handed freely without it being expected back. How are taxpayers hurt in the process? In

I don't get the revulsion towards bailouts. It isn't as if the money is handed freely without it being expected back. How are taxpayers hurt in the process? In fact, "the government and taxpayers made a $23 billion profit from the AIG bailout." [1] [1]: https://www.thebalance.com/aig-bailout-cost-timeline-bonuses-causes-effects-3305693 https://www.thebalance.com/aig-bailout-cost-timeline-bonuses...

icelancer 9y ago
>> In fact, "the government and taxpayers made a $23 billion profit from the AIG bailout." The results do not justify the process. Would small business owners be offered the same loans that were unjustifiable based on assets:liabilities? I can answer that for you right now as someone who has cash in the bank to cover a six figure loan but can't get one due to a 690ish credit score: No, they won't. That we made a profit on (some of the) bailouts doesn't matter. The same process would never be offered to 99.999% of the other citizens of this country.
- q-base 9y ago
  You could argue about exposure and banks that failed would have had larger impact on ordinary people than the 99.999%. But I generally agree with your comment.
- mortehu 9y ago
  You don't remember the 99.999% being offered unjustifiable mortgages? That was a big part of the financial crisis.
  - icelancer 9y ago
    Er, the banks were bailed out of those terrible decisions. Individual homeowners were left to hold the bag.
    - mortehu 9y ago
      If you wanted to bail out the home speculators individually, the analogous approach would be to buy their houses at below the prices the speculators had paid, essentially a short sale. Remember TARP bought the assets for close to their realized value, so the loss was already priced in.
nl 9y ago
I'm a supporter of the bailouts. But I think that those responsible for the financial crisis should have been charged and done prison time.
ionised 9y ago
Well in the UK at least the taxpayers were hurt by nearly a decade of austerity measures, selling off of national assets and a gutting of the welfare state. All as a result of yet another financial crisis caused by irresponsible and greedy financial institutions.
narrator 9y ago
The government of China bails out industries all the time. However, they do it with money they print up on an as needed basis that doesn't incur debt to the government or require future payments for this debt by the taxpayer. This means that bailouts have no effects on the taxpayer in China while they burden the American taxpayer for years to come.
- seanmcdirmid 9y ago
  This isn’t completely true. The government makes the banks lend money to the SOEs with the implicit backing of the people. Much of china’s private sector debt is actually public sector debt in that way. When the loans go bad, they have to recapitalize the banks, which is when the printing presses are used.
dkersten 9y ago
> How are taxpayers hurt in the process? Tax rates went up. (At least, where I am. Don't know about the US) > the government and taxpayers made a $23 billion profit How much of this did taxpayers actually get (in terms of, for example, decreased tax rates, or anything else that directly benefits the taxpayer)?

icelancer 9y ago

>> In fact, "the government and taxpayers made a $23 billion profit from the AIG bailout." The results do not justify the process. Would small business owners be offered the same loans that were unjustifiable based on assets:liabilities? I can answer that for you right now as someone who has cash in the bank to cover a six figure loan but can't get one due to a 690ish credit score: No, they won't. That we made a profit on (some of the) bailouts doesn't matter. The same process would never be offered to 99.999% of the other citizens of this country.

q-base 9y ago
You could argue about exposure and banks that failed would have had larger impact on ordinary people than the 99.999%. But I generally agree with your comment.
mortehu 9y ago
You don't remember the 99.999% being offered unjustifiable mortgages? That was a big part of the financial crisis.
- icelancer 9y ago
  Er, the banks were bailed out of those terrible decisions. Individual homeowners were left to hold the bag.
  - mortehu 9y ago
    If you wanted to bail out the home speculators individually, the analogous approach would be to buy their houses at below the prices the speculators had paid, essentially a short sale. Remember TARP bought the assets for close to their realized value, so the loss was already priced in.

nl 9y ago

I'm a supporter of the bailouts. But I think that those responsible for the financial crisis should have been charged and done prison time.

ionised 9y ago

Well in the UK at least the taxpayers were hurt by nearly a decade of austerity measures, selling off of national assets and a gutting of the welfare state. All as a result of yet another financial crisis caused by irresponsible and greedy financial institutions.

narrator 9y ago

The government of China bails out industries all the time. However, they do it with money they print up on an as needed basis that doesn't incur debt to the government or require future payments for this debt by the taxpayer. This means that bailouts have no effects on the taxpayer in China while they burden the American taxpayer for years to come.

seanmcdirmid 9y ago
This isn’t completely true. The government makes the banks lend money to the SOEs with the implicit backing of the people. Much of china’s private sector debt is actually public sector debt in that way. When the loans go bad, they have to recapitalize the banks, which is when the printing presses are used.

dkersten 9y ago

> How are taxpayers hurt in the process? Tax rates went up. (At least, where I am. Don't know about the US) > the government and taxpayers made a $23 billion profit How much of this did taxpayers actually get (in terms of, for example, decreased tax rates, or anything else that directly benefits the taxpayer)?