"Buy America" clause of the bailout.

[zachattack]

Stupid. That's what it is.

The Buy America clause VERY SIMPLY says this:
All the money used in the bailout must be spent for american products only.

Tell me what the these guys were thinking, please?

It's like this. You've got 5 brothers. Each of you have different colored marbles. Some have more, some have less. Now, in order for the marbles to stay nicely colored and fun, you need to move the marbles between each other, but you have to be smart to not lose all your marbles either.
Suddenly, there's a problem with the flow of the marbles. You're worried, so you decide to "bail out" your marbles by taking half of them and putting them into flow.

You take those marbles and juggle them in your palm a little bit. Nothing happens.

That's how I see this "plan".

.

[Hans Friedman]

I thought a better idea would be give every american citizen or family $100,000 it will stimulate the eco and it would be a lot cheaper.

[zachattack]

I thought a better idea would be give every american citizen or family $100,000 it will stimulate the eco and it would be a lot cheaper.

Wouldn't that our economy even worse?

/notsure

[Hans Friedman]

Wouldn't that our economy even worse?

/notsure

No because people will be spending, and that's good.

[Ishoss]

No because people will be spending, and that's good.

Except we have this nice phenomenon called inflation which screws up that idea perfectly. If you just gave everyone 100k, they would have 100k cash more but they wouldn't be able to buy any more valuables for these 100k because the market would increase their prices. In the end the problem would just end up being bigger.

About the bailout clause; I watched a 60 minutes episode about this the other day and the Catterpillar boss was very skeptical to it. His point was that the Chinese steel was a lot cheaper than the US steel and thus Catterpillar workers will lose their jobs because they won't be able produce as many vehicles as before.

[Justinian]

I thought a better idea would be give every american citizen or family $100,000 it will stimulate the eco and it would be a lot cheaper.

Inflation.

[Pious Agnost]

HYPER-Inflation.

Fixed

[corpse helvetica]

I dunno how an average Harvard economist has not figured out yet that spending based on loans, not real work leads to inflation and to another "bubble" and you have already guessed, it explodes because of there won't be many who will be able to pay back rapid expansion based on loans.

Economy needs to rise but this has to be based on work not on loans and speculations.

therefore 800$B will be a failure

[Zadig]

Inflation.

M X V = P X Q

M= monetary mass --> the amount of money in circulation
V= the amount of times that the money changes hands per day
P= price
Q= quantity

Now by giving everyone loads of money you are just increasing M and since that's not going to make the money change hands quicker either P or Q is going to have to go up to stabilize the equation.
The amount that companies produce isn't going to go up either, so what happens is that prices go up and that's inflation!

[Ragabash]

I thought a better idea would be give every american citizen or family $100,000 it will stimulate the eco and it would be a lot cheaper.

And so destroy value of the dollar completely; like last nail to the coffin? :hmmm:

[Zephyrus]

Stupid. That's what it is.

The Buy America clause VERY SIMPLY says this:
All the money used in the bailout must be spent for american products only.

Tell me what the these guys were thinking, please?

It's like this. You've got 5 brothers. Each of you have different colored marbles. Some have more, some have less. Now, in order for the marbles to stay nicely colored and fun, you need to move the marbles between each other, but you have to be smart to not lose all your marbles either.
Suddenly, there's a problem with the flow of the marbles. You're worried, so you decide to "bail out" your marbles by taking half of them and putting them into flow.

You take those marbles and juggle them in your palm a little bit. Nothing happens.

That's how I see this "plan".

.

Why can't you just beat up your other 4 brothers for their marbles too? That way, you can have them all!

[zachattack]

Why can't you just beat up your other 4 brothers for their marbles too? That way, you can have them all!

Because even though you have more marbles and are stronger than them, if you attack one of them, all the other 4 are going to team up and beat the snot out of you, and stop sending you marbles. The End.

[Zephyrus]

Because even though you have more marbles and are stronger than them, if you attack one of them, all the other 4 are going to team up and beat the snot out of you, and stop sending you marbles. The End.

So an 18 year old could get beat up by a 2 year old, a 5 year old, a 12 year old and a 15 year old? I mean, what would happen if that single dude had a gun and held his bros up at gunpoint and said "gimme your marbles"? He'd take that and run off laughing.

There are plenty of factors we aren't taking into account here. We need to know everything about the brothers, ftk.

[Hans Friedman]

So an 18 year old could get beat up by a 2 year old, a 5 year old, a 12 year old and a 15 year old? I mean, what would happen if that single dude had a gun and held his bros up at gunpoint and said "gimme your marbles"? He'd take that and run off laughing.

There are plenty of factors we aren't taking into account here. We need to know everything about the brothers, ftk.

Won't somebody think of the children!?!?!

[Thanatos]

Except you're assuming they're going to spend.

[Hans Friedman]

Except you're assuming they're going to spend.

Assuming that they're not retarded, I'm sure they would pay off all their bills and debts, and then they would spend some and hopefully put some in the bank.

[zachattack]

Assuming that they're not retarded, I'm sure they would pay off all their bills and debts, and then they would spend some and hopefully put some in the bank.

The thing is though, what's a random family in Louisiana countryside gonna do with 100,00 dollars? Buy more pigs?

[Justinian]

The thing is though, what's a random family in Louisiana countryside gonna do with 100,00 dollars? Buy more pigs?

Immaterial question -- giving $100,000 to everyone would cause massive inflation and lead to price increases in everything, with the dollar becoming worthless.

We'd be Zimbabwe.

[Hunter Makoy]

Stupid. That's what it is.

The Buy America clause VERY SIMPLY says this:
All the money used in the bailout must be spent for american products only.

Tell me what the these guys were thinking, please?

It's like this. You've got 5 brothers. Each of you have different colored marbles. Some have more, some have less. Now, in order for the marbles to stay nicely colored and fun, you need to move the marbles between each other, but you have to be smart to not lose all your marbles either.
Suddenly, there's a problem with the flow of the marbles. You're worried, so you decide to "bail out" your marbles by taking half of them and putting them into flow.

You take those marbles and juggle them in your palm a little bit. Nothing happens.

That's how I see this "plan".

.

Actually its more like we're trying to help our own economy so they want them to actually spend the money in our own economy.

When your in tough economic times, you try to protect your own companies and your own people.

If I were a company here in the U.S. and i buy my steel from China tell me how that helped us?

[zachattack]

Actually its more like we're trying to help our own economy so they want them to actually spend the money in our own economy.

When your in tough economic times, you try to protect your own companies and your own people.

If I were a company here in the U.S. and i buy my steel from China tell me how that helped us?

Global Economy is Global. We invest there, money flow starts again.