Author Topic: So long AIG, and thanks for $22.7b in profits from the bailout  (Read 5681 times)

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Re: So long AIG, and thanks for $22.7b in profits from the bailout
« Reply #45 on: December 12, 2012, 06:14:17 PM »

Offline JSD

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Interceptor, where did the Treasury get the money to give AIG it's bailout? Also, if the bailouts have been paid back, why hasn't our deficit gone down?
« Last Edit: December 12, 2012, 06:20:03 PM by JSD »

Re: So long AIG, and thanks for $22.7b in profits from the bailout
« Reply #46 on: December 12, 2012, 06:18:34 PM »

Online nickagneta

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Interceptor, where did the Treasury get the money to give AIG it's bailout?
Probably China.

Re: So long AIG, and thanks for $22.7b in profits from the bailout
« Reply #47 on: December 12, 2012, 06:19:42 PM »

Offline Interceptor

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Interceptor, where did the Treasury get the money to give AIG it's bailout?
The same way that they get money for everything else: they issue debt. AIG isn't special.

Re: So long AIG, and thanks for $22.7b in profits from the bailout
« Reply #48 on: December 12, 2012, 06:28:49 PM »

Offline Brendan

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I think special thing was who bought the debt. Not the issuing of it per se.

Re: So long AIG, and thanks for $22.7b in profits from the bailout
« Reply #49 on: December 13, 2012, 11:16:07 AM »

Offline Interceptor

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Also, if the bailouts have been paid back, why hasn't our deficit gone down?
This is a non sequitur. Other things that have nothing to do with the bailouts are contributing to the deficit.

I think special thing was who bought the debt. Not the issuing of it per se.
Please be clear about what you're referring to, I don't want to put words in your mouth.

Re: So long AIG, and thanks for $22.7b in profits from the bailout
« Reply #50 on: December 13, 2012, 11:19:14 AM »

Offline Brendan

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Also, if the bailouts have been paid back, why hasn't our deficit gone down?
This is a non sequitur. Other things that have nothing to do with the bailouts are contributing to the deficit.

I think special thing was who bought the debt. Not the issuing of it per se.
Please be clear about what you're referring to, I don't want to put words in your mouth.
Not 100% on this, but:

Normal treasury debt goes on the market to other people.

TARP debt went to the FED in a special deal, where the FED ran the presses to pay for it.

Result huge increase in monetary supply. That's an indirect tax on everyone holding American currency or any other instrument tied to it, right?

Re: So long AIG, and thanks for $22.7b in profits from the bailout
« Reply #51 on: December 13, 2012, 11:29:11 AM »

Offline Interceptor

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Not 100% on this, but:

Normal treasury debt goes on the market to other people.

TARP debt went to the FED in a special deal, where the FED ran the presses to pay for it.

Result huge increase in monetary supply. That's an indirect tax on everyone holding American currency or any other instrument tied to it, right?
There has been a huge increase in the monetary supply since the crisis, but you can't really call it a tax on everyone holding currency unless it has an effect on inflation. It's worth pointing out that inflation was basically a negative number for the year following the crash (deflation), and it was fairly low by historical standards in 2010. We can keep going (inflation running >2% now), but it's a little hard to pin that on TARP.

Re: So long AIG, and thanks for $22.7b in profits from the bailout
« Reply #52 on: December 13, 2012, 11:32:00 AM »

Offline Rondo2287

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Also, if the bailouts have been paid back, why hasn't our deficit gone down?
This is a non sequitur. Other things that have nothing to do with the bailouts are contributing to the deficit.

I think special thing was who bought the debt. Not the issuing of it per se.
Please be clear about what you're referring to, I don't want to put words in your mouth.

I don't think it's a non - sequitur.  I think it's a pretty fair question that deserves an answer.  Not necessarily from you of course
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Re: So long AIG, and thanks for $22.7b in profits from the bailout
« Reply #53 on: December 13, 2012, 11:52:47 AM »

Offline Interceptor

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I don't think it's a non - sequitur.  I think it's a pretty fair question that deserves an answer.  Not necessarily from you of course
What's fair about it? The question is supposing that the deficit hasn't come down. In reality, the deficit has come down from its high in 2009.

Re: So long AIG, and thanks for $22.7b in profits from the bailout
« Reply #54 on: December 13, 2012, 12:34:18 PM »

Offline JSD

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Not 100% on this, but:

Normal treasury debt goes on the market to other people.

TARP debt went to the FED in a special deal, where the FED ran the presses to pay for it.

Result huge increase in monetary supply. That's an indirect tax on everyone holding American currency or any other instrument tied to it, right?
There has been a huge increase in the monetary supply since the crisis, but you can't really call it a tax on everyone holding currency unless it has an effect on inflation. It's worth pointing out that inflation was basically a negative number for the year following the crash (deflation), and it was fairly low by historical standards in 2010. We can keep going (inflation running >2% now), but it's a little hard to pin that on TARP.

According to whom? Inflation is easily defined as the increase in money supply and is most visible by tracking the price of commodities. Government, creating the inflation, is not going to report it honestly, but your wallet will. Has gas gone up since the bailouts? What about food? Gold? Silver?  Yes, across the board.

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According to the Federal Reserve, inflation is not a concern at all. Time after time, in front of Congress and the press, Fed Chairman Ben Bernanke has said that inflation is contained and that it is below the Fed's "mandated" rate of inflation (whatever that may be.) The Bureau of Labor Statistics is saying the same thing. The measures they use to monitor inflation, such as the Consumer Price Index (CPI) and the Personal Consumption Expenditure (PCE), show annual inflation well below 2%. In fact, the GDP price deflator used by the Commerce Department to calculate the second quarter's 1.3% annual growth rate assumed annual inflation was running at just 1.6%.

In fact, Bernanke thinks inflation is so low that he is actually worried about deflation, which he believes is a more dangerous issue. As a result, he is recommending policies that look to raise the inflation rate, not just to combat the phantom menace of deflation but to boost the housing market and reduce unemployment. He mistakenly believes these problems are the ones that concern Americans the most.

If inflation really is as subdued as the government claims, how is it that so many people are concerned? It's not as if the media or political candidates are fanning the fears of rising prices. In fact, given the media's preoccupation with the housing market, the fact that nearly seven times as many Americans worry more about rising food prices than falling home prices shows just how large the inflation problem must be. Yet most economic observers continue to swallow the government's inflation propaganda hook, line and sinker. In fact, although the Fox poll came out last week, I did not read or hear a single story on this topic, even from Fox news itself, which appears to not have noticed the significance of its own data.


http://finance.townhall.com/columnists/peterschiff/2012/10/16/inflation_washington_is_blind_to_main_streets_biggest_concern/page/full/

Re: So long AIG, and thanks for $22.7b in profits from the bailout
« Reply #55 on: December 13, 2012, 01:03:38 PM »

Offline Interceptor

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According to whom? Inflation is easily defined as the increase in money supply
No. Inflation is defined as the general rise in level of the prices of goods/services. An increase in the money supply can cause inflation, but it does not necessarily cause it. We are living in one scenario where it does not.

Remember: Brendan called it a tax on people who hold the USD. It's not a tax unless the value of their currency goes down, which can only be caused by the definition of inflation that I used, not the one that you used.

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and is most visible by tracking the price of commodities. Government, creating the inflation, is not going to report it honestly, but your wallet will.
It is not possible for government to hide real inflation; prices are public. Even if you don't agree with the officially reported figures for inflation, other organizations like the Billion Prices Project have statistics that support the government figures. An argument that the government is covering up real inflation, has no basis in fact.

Quote
Has gas gone up since the bailouts? What about food? Gold? Silver?  Yes, across the board.
Prices go up constantly, independent of bailouts, natural disasters, the color of the sky, or anything else.

Re: So long AIG, and thanks for $22.7b in profits from the bailout
« Reply #56 on: December 13, 2012, 01:37:44 PM »

Offline Interceptor

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In that article, by the way, the author actually hit on the real answer:

Quote
There are only two possible ways to explain the disconnect. Either the government is correct and consumers are worried about a non-existent problem, or the consumers' concerns are real and the government's statistics are not.
... but then he dismisses it. Not because of evidence, but because it doesn't "seem" likely:

Quote
From my perspective, it seems that it is far more likely that consumers are in the right. If so, we are in a lot of trouble.

This is getting a bit away from bailouts, though.

Re: So long AIG, and thanks for $22.7b in profits from the bailout
« Reply #57 on: December 13, 2012, 01:53:35 PM »

Offline angryguy77

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According to whom? Inflation is easily defined as the increase in money supply
No. Inflation is defined as the general rise in level of the prices of goods/services. An increase in the money supply can cause inflation, but it does not necessarily cause it. We are living in one scenario where it does not.

Remember: Brendan called it a tax on people who hold the USD. It's not a tax unless the value of their currency goes down, which can only be caused by the definition of inflation that I used, not the one that you used.

Quote
and is most visible by tracking the price of commodities. Government, creating the inflation, is not going to report it honestly, but your wallet will.
It is not possible for government to hide real inflation; prices are public. Even if you don't agree with the officially reported figures for inflation, other organizations like the Billion Prices Project have statistics that support the government figures. An argument that the government is covering up real inflation, has no basis in fact.

Quote
Has gas gone up since the bailouts? What about food? Gold? Silver?  Yes, across the board.
Prices go up constantly, independent of bailouts, natural disasters, the color of the sky, or anything else.

You obviously don't eat or buy gas and other types of energy. What I pay to feed my family of 4 is significantly higher than it was a few years ago. Prices don't rise that fast on their own. You can provide us all the "definitions" of inflation you want and I can give you real world examples of why you are flat-out wrong.


 

Re: So long AIG, and thanks for $22.7b in profits from the bailout
« Reply #58 on: December 13, 2012, 01:53:50 PM »

Offline JSD

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I do not subscribe to your Keynesian view of economics.
When government prints, the value of the currency goes down. It is a tax. The action of SPENDING itself is a tax. When government spends money on whatever there are 3 ways to pay for it:

1. Print (Inflation Tax)
2. Tax (Direct Tax)
3. Borrow (Interest Tax)

This idea that "money grows on trees", essentially, is preposterous. Someone has to pay for it, and all those options involve making the American people poorer (and less free).

So many people believe in that old saying “Gold is the money of kings. Silver is the money of gentleman. Barter is the money of peasants. Debt is the money of slaves.” because a currency that cannot be [easily] duplicated limits government in that more spending equates to higher rates (basic supply and demand). In contrast, sound money is a natural free market approach that regulates spending. This is why we have a seen an outrageous increase in spending since Nixon put Bretton Woods on hold. Government got the green light to print away.

The profits shown here by AIG are nothing more than trickery and propaganda put out by folks that have a lot of interest in maintaining the status quo.

Re: So long AIG, and thanks for $22.7b in profits from the bailout
« Reply #59 on: December 13, 2012, 02:18:04 PM »

Offline Cman

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I do not subscribe to your Keynesian view of economics.
When government prints, the value of the currency goes down. It is a tax. The action of SPENDING itself is a tax. When government spends money on whatever there are 3 ways to pay for it:

1. Print (Inflation Tax)
2. Tax (Direct Tax)
3. Borrow (Interest Tax)

This idea that "money grows on trees", essentially, is preposterous. Someone has to pay for it, and all those options involve making the American people poorer (and less free).

I agree money doesn't grow on trees. But keep in mind that the dollar *strengthened* in relation to other currencies because, even if the US govt was printing money (not sure if they were or not), the US dollar was seen as a better bet than any other currency.

Point being, there are multiple factors as play. It is not as simple as "if you do this one thing, then this other thing automatically happens".
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