An interesting graphic on unemployment . . .

[Just_A_Guy]

Originally Posted by talisyn

My fellow workers and I did a lot of discussing when the economy started tanking (mostly, are people gonna be able to buy french fries?) and we figured if the stimulus bill, instead of giving money to banks and whatnot, gave $10,000 to every single US citizen the economy would have been back on track before January. People would have caught up on mortgages, they would have bought cars...Give money to people who don't make political contributions? Yeah, like that would ever happen

TARP-I was, IIRC, about $700 billion. Postulating a US population of 250 million, that's about $2,800 for every man, woman, and child in the US. Still a nice chunk of change.

Originally Posted by lilered

Back to my last question. If the Banks were indeed on the brink of going under and our entire financial community was in trouble of being insolvent. Then how did a short term loan of billions of dollars allow them to save themselves from this disaster and pay back the entire loan is such a short term.

Today's September 7th. Let's say you will get paid $2,000 on September 15th. You have $300 in the bank right now. Your rent payment of $850 is due on September 10th. Are you "insolvent"? Technically, no; because your assets (including "accounts receivable") total $2,300 whereas your liabilities are only $850.00. But you do have a cash flow issue; and unless you can come up with some extra cash before the tenth you're going to be in a world of hurt.

In a nutshell, that's what happened to the banks. They had plenty of assets, but they were in forms that couldn't be touched for the immediate future (outstanding loans, real property that couldn't be sold, bonds that could not yet be redeemed, etc).

I suspect personally they didn't need it, but simply used it as a very short term loan and made money on the loan money by investing it. But of course that would be illegal, wouldn;t it?

One of the issues that came out shortly after TARP-I (and discussed in excruciating detail on this forum) was that some of that money went to bonuses for AIG upper-middle management. Some people (myself included) felt these bonus were justified, but the whole debacle made it painfully clear that the federal government had not imposed sufficient guidelines as to what the companies could and couldn't do with the money.

[john doe]

Originally Posted by Just_A_Guy

TARP-I was, IIRC, about $700 billion. Postulating a US population of 250 million, that's about $2,800 for every man, woman, and child in the US. Still a nice chunk of change.

Good thing you were studying math in school instead of getting indoctrinated by socialists, huh?