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What would I gain as a taxpayer in return for this bailout? Would the taxpayer receive 10% equity in YC? It seems like YC could have insured these funds, but

What would I gain as a taxpayer in return for this bailout? Would the taxpayer receive 10% equity in YC? It seems like YC could have insured these funds, but didn’t. They saved money and accepted the risk. This risk is now realized. Seems bizarre that YC would be made whole. Certainly it saves jobs, but it benefits YC more than anyone else.

andrepd 4y ago
> Would the taxpayer receive 10% equity in YC? Make that 30–50 and we'd have a deal. Fucked up and want the state to rescue you? Fine, but your business is now mine, future profits and dividends (evabled by the bailout) will be distributed to all Americans, not just the handful of owners of "your" business. It's how the 2008 bailouts should have been handled, instead we got the biggest transfer of wealth from poor to rich in history.
- vorpalhex 4y ago
  The US government made $15B from the 2008 bailouts. That's 0.6% return on investment which is kinda poor but overall the bailout was profitable for US taxpayers.
  - Laaas 4y ago
    > 9. Did all the companies bailed out by taxpayers pay the money back? > Pretty much. The Treasury Department injected $412 billion into banks, carmakers and other struggling companies through the Troubled Asset Relief Program, or TARP. As of the end of last year, it had collected everything it had paid out in bailout funds and then some, leaving the government with a profit of $12 billion. https://www.washingtonpost.com/business/economy/a-guide-to-the-financial-crisis--10-years-later/2018/09/10/114b76ba-af10-11e8-a20b-5f4f84429666_story.html https://www.washingtonpost.com/business/economy/a-guide-to-t... (2018)
    - andrepd 4y ago
      12/700 over 10 years is absolutely shit profit. If I go unemployed for a few months and can't pay my house [1], unfortunately there's nobody to bail me out. I'll lose the house and go homeless, notwithstanding the fact that I'd be willing to pay that 1.5% interest over 10 years for a liquidity bailout for myself during those times. Unfortunately I'm not too-big-to-fail. [1] Ironically, in the downturn caused by those very same companies we're talking about.
  - subsistence234 4y ago
    >The US government made $15B from the 2008 bailouts. if we ignore the hundreds (at least) of billions $$$ that the fed created and flooded the world economy with, in order to make that $15B "win" possible. of course it was mostly non-Americans who ate the gigantic costs, thanks to the dollar's unique status as world reserve currency. but that just makes it worse, from a moral hazard POV.
  - andrepd 4y ago
    Lol... If you bought a Ferrari 250 GTO for 175k$ back in the 60s (inflation-adjusted) and sold it today for 176k$, you would have technically made a "profit" of about 0.6%. Only you have made a very stupid deal because you could have sold it for 70 million. The same applies here: these companies would go under without state intervention, the very least you could do is gain a large stake in the equity of those companies, in exchange for bailing them out. That and criminal liability for the people in charge.
    - vorpalhex 4y ago
      The government is not a private investor. That money would not have made huge returns anymore than medicare does. We _do_ gain from bailing them out - we tax them. We do not put business owners in jail for losing the risk game. There are plenty of corrupt governments that do the sort of things you are suggesting, such as Russia. They are not considered effective economies and their corruption ruins their ability to be functional.
- microtherion 4y ago
  In 2009, I suggested that our banks should have to add "VEB" to their name if they took any public funds. Sadly, nothing came of it. https://en.wikipedia.org/wiki/Volkseigener_Betrieb https://en.wikipedia.org/wiki/Volkseigener_Betrieb
garry 4y ago
These are deposits at a bank. We're advocating for protection of 37,000 small business accounts, a small number of which are YC. We discovered about 30% of YC companies would not be able to make payroll even after the $250,000 insured amount if they were to wait months for their payments. That is detailed on the FDIC website currently as the process for remediation. This petition represents the lived experience of thousands of founders, and this is how we are communicating this is a real problem that DC needs to be aware of. Again, this is not about saving SVB, the bank that made decisions that led to this, nor their equity holders. This is about saving innocent depositors.
- breck 4y ago
  You are in the top 1% and you are asking for a government bailout. Everyone knows that amounts over $250K were not insured. These are not "innocent depositors". A lot of my portfolio companies are affected, but I will not lobby for a government bailout on their behalf. It's not the right thing to do. I 100% agree with you on lobbying for an expedient process, but if these companies have to take a haircut, they have to take a haircut. The strong will survive (and learn a lesson about risk management).
  - dehrmann 4y ago
    > Everyone knows that amounts over $250K were not insured. This is technically true, but I think there's a feeling that traditional banks are de-facto safe places to keep money. Depositors losing money in bank runs feels like a 1920's problem.
    - muzz 4y ago
      Because 2008 was so long ago? What were the CFOs of these companies doing.
      - grugagag 4y ago
        They were counting the days till the next bonus

andrepd 4y ago

> Would the taxpayer receive 10% equity in YC? Make that 30–50 and we'd have a deal. Fucked up and want the state to rescue you? Fine, but your business is now mine, future profits and dividends (evabled by the bailout) will be distributed to all Americans, not just the handful of owners of "your" business. It's how the 2008 bailouts should have been handled, instead we got the biggest transfer of wealth from poor to rich in history.

vorpalhex 4y ago
The US government made $15B from the 2008 bailouts. That's 0.6% return on investment which is kinda poor but overall the bailout was profitable for US taxpayers.
- Laaas 4y ago
  > 9. Did all the companies bailed out by taxpayers pay the money back? > Pretty much. The Treasury Department injected $412 billion into banks, carmakers and other struggling companies through the Troubled Asset Relief Program, or TARP. As of the end of last year, it had collected everything it had paid out in bailout funds and then some, leaving the government with a profit of $12 billion. https://www.washingtonpost.com/business/economy/a-guide-to-the-financial-crisis--10-years-later/2018/09/10/114b76ba-af10-11e8-a20b-5f4f84429666_story.html https://www.washingtonpost.com/business/economy/a-guide-to-t... (2018)
  - andrepd 4y ago
    12/700 over 10 years is absolutely shit profit. If I go unemployed for a few months and can't pay my house [1], unfortunately there's nobody to bail me out. I'll lose the house and go homeless, notwithstanding the fact that I'd be willing to pay that 1.5% interest over 10 years for a liquidity bailout for myself during those times. Unfortunately I'm not too-big-to-fail. [1] Ironically, in the downturn caused by those very same companies we're talking about.
- subsistence234 4y ago
  >The US government made $15B from the 2008 bailouts. if we ignore the hundreds (at least) of billions $$$ that the fed created and flooded the world economy with, in order to make that $15B "win" possible. of course it was mostly non-Americans who ate the gigantic costs, thanks to the dollar's unique status as world reserve currency. but that just makes it worse, from a moral hazard POV.
- andrepd 4y ago
  Lol... If you bought a Ferrari 250 GTO for 175k$ back in the 60s (inflation-adjusted) and sold it today for 176k$, you would have technically made a "profit" of about 0.6%. Only you have made a very stupid deal because you could have sold it for 70 million. The same applies here: these companies would go under without state intervention, the very least you could do is gain a large stake in the equity of those companies, in exchange for bailing them out. That and criminal liability for the people in charge.
  - vorpalhex 4y ago
    The government is not a private investor. That money would not have made huge returns anymore than medicare does. We _do_ gain from bailing them out - we tax them. We do not put business owners in jail for losing the risk game. There are plenty of corrupt governments that do the sort of things you are suggesting, such as Russia. They are not considered effective economies and their corruption ruins their ability to be functional.
microtherion 4y ago
In 2009, I suggested that our banks should have to add "VEB" to their name if they took any public funds. Sadly, nothing came of it. https://en.wikipedia.org/wiki/Volkseigener_Betrieb https://en.wikipedia.org/wiki/Volkseigener_Betrieb

garry 4y ago

These are deposits at a bank. We're advocating for protection of 37,000 small business accounts, a small number of which are YC. We discovered about 30% of YC companies would not be able to make payroll even after the $250,000 insured amount if they were to wait months for their payments. That is detailed on the FDIC website currently as the process for remediation. This petition represents the lived experience of thousands of founders, and this is how we are communicating this is a real problem that DC needs to be aware of. Again, this is not about saving SVB, the bank that made decisions that led to this, nor their equity holders. This is about saving innocent depositors.

breck 4y ago
You are in the top 1% and you are asking for a government bailout. Everyone knows that amounts over $250K were not insured. These are not "innocent depositors". A lot of my portfolio companies are affected, but I will not lobby for a government bailout on their behalf. It's not the right thing to do. I 100% agree with you on lobbying for an expedient process, but if these companies have to take a haircut, they have to take a haircut. The strong will survive (and learn a lesson about risk management).
- dehrmann 4y ago
  > Everyone knows that amounts over $250K were not insured. This is technically true, but I think there's a feeling that traditional banks are de-facto safe places to keep money. Depositors losing money in bank runs feels like a 1920's problem.
  - muzz 4y ago
    Because 2008 was so long ago? What were the CFOs of these companies doing.
    - grugagag 4y ago
      They were counting the days till the next bonus