4 ms·

What's the main difference between this bill and the one that was rejected last week? Is it just the pork offerings including a tax credit for racetrack owners

by kqr2 18y ago

What's the main difference between this bill and the one that was rejected last week? Is it just the pork offerings including a tax credit for racetrack owners and makers of wooden toy arrows?

alecco 18y ago
Goldman Sachs and Warren Buffet most likely bought billions in toxic assets during this week to sell for up to double the price to the taxpayer.
- socmoth 18y ago
  You don't really know much about Warren Buffet. He is famous for paying unusually high taxes compared to his peers because he thinks it is the right thing for people in his position to do.
  - alecco 18y ago
    Why did he partner up with Goldman Suchs, then? I know [who he is] and besides this he is almost a financial saint. Still, he backs this bailout and will make huge profit on it. Oh, and the bailout favors his other investments. Being foreign, the bailout favors me as it helps my savings indirectly. But it is the largest scam in history.
    - cstejerean 18y ago
      AFAIK Buffet would support a bailout that involved buying assets at fair market value because he thinks the government could make a lot of money. He said that not buying at market value and instead giving the banks whatever they ask for these assets will likely lead to a wasted 700b. So at least in theory he supports doing the right thing. I don't know anything about his involvement with Goldman, but maybe he realized the government will do the wrong thing anyway so he might as well profit from it.
    - socmoth 18y ago
      I don't know anything inside or specific but I have read some books on buffet. He invests in good companies that are below market rates. His generally buys companies that have sound financials and will continue to make money. He also likes companies that make simple products (razor blades, furniture, not technology : ). Buffet has gone on record multiple times (cnn, print interviews) saying he would be the person who buys the mortgages from the banks and resales them later if he could get a 700 billion dollar or comparable loan. The mortgages are current artificially low because everyone is scared. If you can buy them low and sell them once the fear is gone, you could make a ton of money. People will make money on this situation, the government will completely mess up some aspects of this, articles will be written 'exposing' all the problems.
jws 18y ago
The arrow thing is popular with pork pokers, but what it is doing is correcting an accidentally applied tax. In 2004 there was a small $0.39 excise tax levied on weapons. Unfortunately, $0.30 target arrows are considered weapons under the law so they got a 130% tax accidentally levied on them. Any politician or journalist that grouses about arrow makers getting special handouts is either uninformed or attempting to deceive you. I recommend you ignore them as a source of future information.
- socmoth 18y ago
  i wish there were wikipedia style discuss pages for legislation. especially for things like this.
  - gills 18y ago
    That's my 'when I get distracted from real work' side project :)
  - babyshake 18y ago
    http://publicmarkup.org/bill/emergency-economic-stabilization-act-2008/ http://publicmarkup.org/bill/emergency-economic-stabilizatio... thank you, Sunlight Foundation.
    - davidw 18y ago
      Good link, but the commentary there is just as bad as on this site.
  - shawndrost 18y ago
    I registered politwiki.com for something like this. If someone wants to do something with the domain, let me know.
  - rbanffy 18y ago
    In Brazil, there is a e-legislative solution based in Zope called SAPL (Sistema de Apoio ao Processo Legislativo or Legislative Process Support System). It's quite functional and it's installed in a lot of different legislatures across the country. I have met the team and briefly worked on some possible extensions for it. And, BTW, it's open source, so, if you want to play with it, you can.
jcromartie 18y ago
Well actually, the bailout is what was tacked-on to a tax bill. That makes it $700 billion in pork!
mechanical_fish 18y ago
Last week it was presumed that the bill would pass. So there wasn't a big incentive for every credit-starved business and bank to spend time calling congresspeople and lobbying for it, or for something like it. That changed over the last week, as articles like this one came out: http://www.bizjournals.com/twincities/stories/2008/09/29/daily23.html http://www.bizjournals.com/twincities/stories/2008/09/29/dai... So there's been another week to form the consensus: The bill sucks, but the problem is real, and there's no clearly differentiated, politically viable, non-sucky alternative that will arrive in time. The moral of this story, as with so many stories, is that the right way to deal with dire emergencies is to avoid causing them in the first place.
deleted 18y ago
[deleted]
jd 18y ago
On the Daily Show, Jon Stewart reported that the main difference was an additional $150 billion in tax breaks.
- mixmax 18y ago
  I would venture that a country whose most credible news source is a comedy show has some substantial problems with their meida.
  - mixmax 18y ago
    For those that don't see what I mean Jon Stewart explains it best himself. From his appearance on CNN's crossfire: http://www.youtube.com/watch?v=vmj6JADOZ-8 http://www.youtube.com/watch?v=vmj6JADOZ-8
  - sgibat 18y ago
    You don't need to look at the relative credibility of the Daily Show to tell you that our media is worthless (no, worse -- it is dangerous).
bilbo0s 18y ago
The quants are going to go to town on this one. This bill gives the SEC authority to suspend the practice of marking to market. Bad idea. That makes this bill just a big money giveaway in practice. Transfer of wealth basically. Further, the FDIC is already running low on funds, we should be slow to make new promises when we are already uncertain with regard to meeting present obligations. Additionally, raising the limit on FDIC insurance will make it harder to determine when a bank is in trouble. Now I am not naive, I am sure that was the idea behind raising the limit in the first place. But the less educated among us actually believe this was done to protect their money. Lastly, $150 billion in tax cuts? These people really need to get some cost accountants.
- newt0311 18y ago
  The SEC already had the authority to suspend mark-to-market accounting. This bill just re-affirms it. Furthermore, mark-to-market is an accounting technique.It may result in fraud but there is no "transfer of wealth" about it. Furthermore, if history is any indication, corporations can always cook their book if they really want to. The FDIC is indeed running low on funds and raising the limit at this point in time is a bad idea. However, the FDIC limit does not hide the financial health of a bank or have any direct impact on it for that matter. The limit governs what happens to customer deposits after the bank fails. Having a higher limit may indirectly help troubled banks by placating their depositors and convincing said depositors that their money is safer. About the tax cuts. The $150 billion is a drop in the bucket. If you really want to bring costs in line, take a very hard look at Social Security, Medicaid, Medicare, and Defense spending. Everything else (except now this bailout) is a rounding error compared to those.
  - bilbo0s 18y ago
    Accounting fraud is exactly what will make this whole thing degenerate into a transfer of wealth. Think about it, they can cook the capital ratios so that not only the bonds, but now even those CDS's that they have are worth X, when they would fetch Y at market. This gives them more liquidity, yes. But it is an illusion. Those CDS's are still as precarious as they were before, so are the now revalued bonds that they carry. Nothing changes, except the balance book. Add to this a guaranteed market for these assets, the taxpayer and surely you must see the potential for fraudulent profit taking in this scenario. Early indications that a bank needs to be looked at comes to the FDIC because people with more than $100000 start moving excess money to different banks. FDIC starts to look at them, and that is where the lowest form of all quants comes in. The "shorter". They get wind. I don't know how, but you and I both know it always happens, and the bank's stock starts a death spiral. Putting more pressure on their capital ratios, which have to factor in cheap stock now. Also, in fractional reserve banking, the fees charged by the FDIC to the banks SHOULD depend on the amount that the FDIC is insuring accounts for. There is NOTHING in the bill about raising fees. I'm sure we can all imagine that fees will probably not be raised, as the idea is to help with liquidity, not hinder it. So right there the banks just got something for nothing in terms of insurance. Helping their financial position appear safer. Maybe we are talking about two different things. Could you please explain why you believe this does not help the banks to appear financially healthy longer? If you consider $150 billion a 'drop in the bucket' then salud! I think $150 billion here, $150 billion there, and pretty soon you are talking about real money. Consider the possibility that you believe it to be a small amount because you agree with this bill. What if we gave $150 billion to fund welfare? How about we give $150 billion to fund the salaries of H1B workers? Or we blow $150 billion on 2 toilets for stealth bombers? Is it still a drop in the bucket?
nadim 18y ago
Here is a diff between versions of the bill: http://www.govtrack.us/special/econstimbill/changes.xpd?id=4 http://www.govtrack.us/special/econstimbill/changes.xpd?id=4
Prrometheus 18y ago
Here's a rundown of the groups that switched: http://reason.com/blog/show/129262.html http://reason.com/blog/show/129262.html
lkozma 18y ago
The main difference is the four days in between that has allowed insiders to buy up quality stock that was free-falling and that will presumably recover now.

by kqr2 18y ago

What's the main difference between this bill and the one that was rejected last week? Is it just the pork offerings including a tax credit for racetrack owners and makers of wooden toy arrows?

alecco 18y ago

Goldman Sachs and Warren Buffet most likely bought billions in toxic assets during this week to sell for up to double the price to the taxpayer.

socmoth 18y ago
You don't really know much about Warren Buffet. He is famous for paying unusually high taxes compared to his peers because he thinks it is the right thing for people in his position to do.
- alecco 18y ago
  Why did he partner up with Goldman Suchs, then? I know [who he is] and besides this he is almost a financial saint. Still, he backs this bailout and will make huge profit on it. Oh, and the bailout favors his other investments. Being foreign, the bailout favors me as it helps my savings indirectly. But it is the largest scam in history.
  - cstejerean 18y ago
    AFAIK Buffet would support a bailout that involved buying assets at fair market value because he thinks the government could make a lot of money. He said that not buying at market value and instead giving the banks whatever they ask for these assets will likely lead to a wasted 700b. So at least in theory he supports doing the right thing. I don't know anything about his involvement with Goldman, but maybe he realized the government will do the wrong thing anyway so he might as well profit from it.
  - socmoth 18y ago
    I don't know anything inside or specific but I have read some books on buffet. He invests in good companies that are below market rates. His generally buys companies that have sound financials and will continue to make money. He also likes companies that make simple products (razor blades, furniture, not technology : ). Buffet has gone on record multiple times (cnn, print interviews) saying he would be the person who buys the mortgages from the banks and resales them later if he could get a 700 billion dollar or comparable loan. The mortgages are current artificially low because everyone is scared. If you can buy them low and sell them once the fear is gone, you could make a ton of money. People will make money on this situation, the government will completely mess up some aspects of this, articles will be written 'exposing' all the problems.

jws 18y ago

The arrow thing is popular with pork pokers, but what it is doing is correcting an accidentally applied tax. In 2004 there was a small $0.39 excise tax levied on weapons. Unfortunately, $0.30 target arrows are considered weapons under the law so they got a 130% tax accidentally levied on them. Any politician or journalist that grouses about arrow makers getting special handouts is either uninformed or attempting to deceive you. I recommend you ignore them as a source of future information.

socmoth 18y ago
i wish there were wikipedia style discuss pages for legislation. especially for things like this.
- gills 18y ago
  That's my 'when I get distracted from real work' side project :)
- babyshake 18y ago
  http://publicmarkup.org/bill/emergency-economic-stabilization-act-2008/ http://publicmarkup.org/bill/emergency-economic-stabilizatio... thank you, Sunlight Foundation.
  - davidw 18y ago
    Good link, but the commentary there is just as bad as on this site.
- shawndrost 18y ago
  I registered politwiki.com for something like this. If someone wants to do something with the domain, let me know.
- rbanffy 18y ago
  In Brazil, there is a e-legislative solution based in Zope called SAPL (Sistema de Apoio ao Processo Legislativo or Legislative Process Support System). It's quite functional and it's installed in a lot of different legislatures across the country. I have met the team and briefly worked on some possible extensions for it. And, BTW, it's open source, so, if you want to play with it, you can.

jcromartie 18y ago

Well actually, the bailout is what was tacked-on to a tax bill. That makes it $700 billion in pork!

mechanical_fish 18y ago

Last week it was presumed that the bill would pass. So there wasn't a big incentive for every credit-starved business and bank to spend time calling congresspeople and lobbying for it, or for something like it. That changed over the last week, as articles like this one came out: http://www.bizjournals.com/twincities/stories/2008/09/29/daily23.html http://www.bizjournals.com/twincities/stories/2008/09/29/dai... So there's been another week to form the consensus: The bill sucks, but the problem is real, and there's no clearly differentiated, politically viable, non-sucky alternative that will arrive in time. The moral of this story, as with so many stories, is that the right way to deal with dire emergencies is to avoid causing them in the first place.

deleted 18y ago

[deleted]

jd 18y ago

On the Daily Show, Jon Stewart reported that the main difference was an additional $150 billion in tax breaks.

mixmax 18y ago
I would venture that a country whose most credible news source is a comedy show has some substantial problems with their meida.
- mixmax 18y ago
  For those that don't see what I mean Jon Stewart explains it best himself. From his appearance on CNN's crossfire: http://www.youtube.com/watch?v=vmj6JADOZ-8 http://www.youtube.com/watch?v=vmj6JADOZ-8
- sgibat 18y ago
  You don't need to look at the relative credibility of the Daily Show to tell you that our media is worthless (no, worse -- it is dangerous).

bilbo0s 18y ago

The quants are going to go to town on this one. This bill gives the SEC authority to suspend the practice of marking to market. Bad idea. That makes this bill just a big money giveaway in practice. Transfer of wealth basically. Further, the FDIC is already running low on funds, we should be slow to make new promises when we are already uncertain with regard to meeting present obligations. Additionally, raising the limit on FDIC insurance will make it harder to determine when a bank is in trouble. Now I am not naive, I am sure that was the idea behind raising the limit in the first place. But the less educated among us actually believe this was done to protect their money. Lastly, $150 billion in tax cuts? These people really need to get some cost accountants.

newt0311 18y ago
The SEC already had the authority to suspend mark-to-market accounting. This bill just re-affirms it. Furthermore, mark-to-market is an accounting technique.It may result in fraud but there is no "transfer of wealth" about it. Furthermore, if history is any indication, corporations can always cook their book if they really want to. The FDIC is indeed running low on funds and raising the limit at this point in time is a bad idea. However, the FDIC limit does not hide the financial health of a bank or have any direct impact on it for that matter. The limit governs what happens to customer deposits after the bank fails. Having a higher limit may indirectly help troubled banks by placating their depositors and convincing said depositors that their money is safer. About the tax cuts. The $150 billion is a drop in the bucket. If you really want to bring costs in line, take a very hard look at Social Security, Medicaid, Medicare, and Defense spending. Everything else (except now this bailout) is a rounding error compared to those.
- bilbo0s 18y ago
  Accounting fraud is exactly what will make this whole thing degenerate into a transfer of wealth. Think about it, they can cook the capital ratios so that not only the bonds, but now even those CDS's that they have are worth X, when they would fetch Y at market. This gives them more liquidity, yes. But it is an illusion. Those CDS's are still as precarious as they were before, so are the now revalued bonds that they carry. Nothing changes, except the balance book. Add to this a guaranteed market for these assets, the taxpayer and surely you must see the potential for fraudulent profit taking in this scenario. Early indications that a bank needs to be looked at comes to the FDIC because people with more than $100000 start moving excess money to different banks. FDIC starts to look at them, and that is where the lowest form of all quants comes in. The "shorter". They get wind. I don't know how, but you and I both know it always happens, and the bank's stock starts a death spiral. Putting more pressure on their capital ratios, which have to factor in cheap stock now. Also, in fractional reserve banking, the fees charged by the FDIC to the banks SHOULD depend on the amount that the FDIC is insuring accounts for. There is NOTHING in the bill about raising fees. I'm sure we can all imagine that fees will probably not be raised, as the idea is to help with liquidity, not hinder it. So right there the banks just got something for nothing in terms of insurance. Helping their financial position appear safer. Maybe we are talking about two different things. Could you please explain why you believe this does not help the banks to appear financially healthy longer? If you consider $150 billion a 'drop in the bucket' then salud! I think $150 billion here, $150 billion there, and pretty soon you are talking about real money. Consider the possibility that you believe it to be a small amount because you agree with this bill. What if we gave $150 billion to fund welfare? How about we give $150 billion to fund the salaries of H1B workers? Or we blow $150 billion on 2 toilets for stealth bombers? Is it still a drop in the bucket?

nadim 18y ago

Here is a diff between versions of the bill: http://www.govtrack.us/special/econstimbill/changes.xpd?id=4 http://www.govtrack.us/special/econstimbill/changes.xpd?id=4

Prrometheus 18y ago

Here's a rundown of the groups that switched: http://reason.com/blog/show/129262.html http://reason.com/blog/show/129262.html

lkozma 18y ago

The main difference is the four days in between that has allowed insiders to buy up quality stock that was free-falling and that will presumably recover now.