The richies will tap working joe taxpayer only to the extent it is necessary to protect their wealth and kick start the "middle class" scam. Government is there to protect their interests, not yours.

Oh yeah... I know that. Its socializing the debt and privatizing the profit. Its just a crock.

They can't get their money any other way, so they'll just take if from everyone.

print, print, print...

Printing money to buy worthless assets doesn't sound to me like the start of a deflationary cycle at all. Sounds to me like inflation is right around the corner.

I don't understand how this helps average taxpayers and workers.

Interesting how, without a blink of an eye, the gov't will send $100 billion to Citi, $130+ billion to AIG, $25 billion apiece to JP Morgan, Goldman Sachs and the like, but they won't consider giving GM a measly $25 billion? Don't get me wrong, I'm against bailing anyone out, but the hypocrisy reeks of white collar versus blue collar. They must protect the oligarchy at all costs.

.... and seahorse, let's not forget about the 25 billion wasted, and I mean COMPLETELY WASTED each month engaging the US military in the stupid wars in Islam.

eastbay,

As I understand it, it's a race to see whether govts can print as fast as debts can go bad and destroy money originally created by credit. Currently, the credit-destruction vortex seems to be winning. Who knows? If they can change denominations fast enough, the printing might stand a chance!

Since its all computerized, what would happen if you just wiped all the debts out, and dropped say $10K New Dollars in every person's bank account, and everybody keeps their jobs paying up to $100K a year?

Reverse Engineer

Think of the credit crisis as a dam analogy. Right now the dam is being drained and it is half full. But if you dump another half dam of water all at once, the dam will still burst.

Another version of the story:

Citi rescue plan in the works

How does throwing taxpayer money at a money losing bank restore ANYBODY'S confidence in the viability of that bank?

When will the journalists reporting this stuff STOP parroting government propaganda? Its ridiculous. Can't somebody in the MSM SAY "this is ridiculous!"?

Reverse Engineer

if you buy into the current paradigm, like we both know they do, then that's the way to fix it.

until you bail out j6p, you won't kick start anything.

umm, no the financial sector in their view is more important than industry or farming.

The United States will guarantee up to 306 billion dollars of assets, according to the agreement reached today.

Citigroup Bailout Agreement (pdf warning)

The first 29 billion will be absorbed by Citigroup. That leaves 277 billion. After that, 90% will be absorbed by taxpayers, and 10% will be absorbed by Citigroup. That leaves about 249 billion dollars in taxpayer guarantees for Citigroup alone.

Note that this covers less than half of their balance sheet, and they still have around 1.2 trillion dollars in off-balance sheet SIVs. Also note that management will not be changed at all. Out of 350,000 Citigroup jobs worldwide, 53,000 will be layed off. My opinion, based on all of Citigroups problems, is that 150,000 would be a closer number to what they need in order to restore profitability.

This is even more disgusting than the AIG bailout. They should be forced to mark everything to market, including off-balance sheet vehicles. Citigroup should be forced to liquidate everything that is unprofitable. If that means selling assets for pennies on the dollar, then so be it. If they don't do that, than these bailouts will solve nothing. They will just need even bigger bailouts in 2009. If they remain unprofitable, they will just need to be bailed out over and over again. This goes for all banking institutions that accept bailout money.

Roger Moore said it best. They are creating an "inflation holocaust". I hope anyone reading this has plenty of gold, food, and water, because paper will not be worth much if this keeps up.

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