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c&amagn

Our Tax Dollars-Do you think it's right???

177 posts in this topic

Do you think it's right for our federal government to use Our tax dollars to bail out these companies like AIG, FannieMae etc... For some reason our government is just doing this out of the blue with no votes or anything. Now there's talk of the Federal gov. taking over all the bad assestes too. Just sort of curious as to how people feel about our government stepping into our society's free enterprise system and using our tax $$ to bail out failed companies without the people's vote or say in the matter?

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You(I assume) did vote on the matter. Its called an ELECTION. They usually happen in november. You/we elect officials, who appoint other officials and together they make decisions. If you dont like the decisions they are making. then vote them and Their party out, at the next election. Of course it is a little more complicated than that.

As far as the bailouts go, I have no opinion at this time.

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If putting up 100B (or whatever) keeps us from having 1T in damage then I'm for it. However, I would like to see us recover that money from those that profited prior to the bailout. If a company becomes so large that its failure would negatively effect all of us then isn't it a company that operates in the public interest and therefore should be owned by all of us? Just a thought.

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Thats right BIG money Bails BIG money.I'm aginst most of it! where it has a effect on world economy,But let em fail on their own! let em go!

Recession? Depression!

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Here's how somebody in the Insurance Idustry feels about it.

-----------------------------------------------------------

To all Midwest Family Agencies: I am sure you all learned today that the Fed's are loaning AIG up to $85Billion to avoid a possible worse fate. That's $85Billion with a big B. Wow! Wonder if Midwest Family could just get a small piece of that---say $10M (that's $10Million with an M). Suppose we would get the same consideration? Probably not! I know these possible events could have caused some stress for Insurance customers and for Agents and I know there is enough stress in your jobs right now. However, what message does all of these "bailouts" send to the public in general?

What happened to free enterprise in this country. The ability to succeed and to fail. Are there no risks we take as American's any longer AND expect to live with? What message does all of this send about the quality or value of what we do in the Insurance business every day. In short, if a person does not buy flood Insurance, buy enough hurricane insurance, builds/develops in an area that creates more risk and price than a person can afford NO PROBLEM I'll just wait for the Feds to send me a disaster recovery "life line"---AND they ALWAYS do. NOW Florida and other coastal States want all of us all in the Midwest to pay for a piece of there Catastrophe exposure. It's call spreading the risk----TO US! All of these bailouts MAY be good politics but they are horrible public policy and fiscal policy IN MY OPINION. Who is going to pay for this!!!!!????? No problem, just add it to the $7-8 trillion Federal debt we have now. That's trillion with big T!!!

What do these events say about our Industry's Underwriting and Investment discipline requirements? Go ahead and take on as much risk as you like. The feds will bail you out. I have already heard that our Industry Guarantee Fund assessments in the event of an AIG failure would be enormous. We are more than willing to pay MFM's share. By the way, who in their infinite wisdom said that all Insurance Companies should share all Company insolvencies in these State Guarantee Fund arrangements anyway---another Bureaucrat I suppose.

A M Best thought AIG should be rated A+ "Superior" prior to this. Only now do they think they are an A "Excellent". What message does this send to us A- carriers such as Midwest Family? ALL other Rating Agencies, S and P and Moody's included had them rated highly, if not, as high as they could be rated. All of our regulators and rating Agencies have been recently focused on "Enterprise Risk Management". Fancy term for are you in control of what you are doing! How about at AIG? Where are the regulators and rating agencies on this ERM issue now? No question there has been a large Company bias by regulators and ALL rating Agencies. Larger has to be better. Small Companies can't have enough resources to manage risks and respond appropriately to them. Perhaps it is time for all to recognize that we "small" companies may be closer to our risks and our operations than the giants and we may even understand our customers better. What a concept. Oh and those Mutuals---they just aren't "risk takers" they never will "fly with the eagles" like those big Stocks. Well, perhaps us Mutuals will not crash and burn as a result of not "flying with the Eagles". Ask the shareholders of AIG how they feel right now about "Flying with the Eagles"!

AIG has been doing a significant amount of Direct Marketing in recent years. Wonder what message those telemarketing people (assuming they are still on the job) are telling customers now. Could direct writing customers be now getting what they paid for? Could it be that an Independent Agent's voice may carry a little more weight now as an Independent Advisor than in the past? Time will tell. This kind of bad press has to help enhance the value of an Independent Agent. Hope your National Organizations are considering these developments in your advertising. Also if this email may help you send a message to a customer that you lost to go to Direct Market to SAVE a buck or two "forward" this email to them.

Ok. Enough of the soap box. If I have offended any of you that are dependent on our government for self reliance, so be it! If i missed any one i should have offended I apoligixe fior this also. Actually, I think I will make an appointment with a Mortgage Company right now and take out one of those "Sub Prime" mortgage loans with great "teaser" rate. Why not? Our Government will take care of me if I can't pay for it.

"May we live in interesting times" with more personal responsibility.

Best regards, for what you do EVERY day!

Ron Boyd, CPCU

President and CEO

Midwest Family Mutual Ins Co

Plymouth, Mn 55446

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I am not one for government bailouts of private companies but in some cases I think there is no other choice. Remember it's not just the wealthy with money in the markets. Think of all those 401K's out there.

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First off, BID2 you can honestly say that you weigh your vote on... "If we need to bailout a company to stave off a greater economic disaster what would this candidate do"... I find that hard to believe. I don't think what candidate or party really makes a difference in this situation. If AIG goes bankrupt the ramifications will be like nothing any of us have ever seen. They have their hands in everything. I can't say it ideal that the gov't is doing this, but I don't think it is "Hey, why don't we spend 85 billion today and bail out a company just for the heck of it" We are in some dire times right now. Sometimes that calls for decisions that nobody loves, but that are in the best interest for the people of the United States. My feeling is, people far more qualified then me are making the decisions... I'll put my faith in them.

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I suppose I should voice my opinon since I started this topic. I think there's a lot of PRO's and CON's to this matter. All I know is and am glad for is that at least 85-Billion $$ of our american Tax dollars get to stay right here in the the USA and not over seas somewhere else.

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I don't think what candidate or party really makes a difference in this situation.

But it does Coach as the president is the person putting a lot of these overseers in their position, and it's usually someone from their own party who is due a favor. If McCain gets elected, a lot of the same incompetent people in these positions will remain there. If Obama is elected, they will all be replaced. Whether they'll be replaced by better people remains to be seen but never the less, they certainly can't be worse. wink

Edit: It's time to clean house in Washington and voting in another Republican isn't going to do it.

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this problem began when congress voted to deregulate financial markets. They believed it was modernizing things by getting govt out of the way and letting the companies sink or swim upon thier talents. The good old capitalist free market ideal. Now we see how well that is working out. Those who dreamed up this idea to get rid of safeguards (Glass-Steagal Act) put in place to prevent another great depression forgot what they were there for. All they saw was the govt getting in the way of profits. Kinda short sighted when you consider where it has now led us. Byron Dorgan (D ND) forsaw this ten years ago but was ignored when congress passed the Gramm-leach-blilley act. BTW Gramm is on McCain's election team.

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They are also going to have to pay back that money at 11% interest. They didn't just give them the money. That's the half of the story that a lot forget.

As far as the repubs bailing them out. I'm not sure how that works. Did Bush say bail them out and everyone did or does the Democratic congress have to agree? I'm not trying to be one side or the other, I would like to know. Does anyone know or are you just blaming Bush cause it's fashionable to do that?

I was listening to KFAN on the way home and they had a politcal anylist on. They were talking about this and one said "How long will it take people to start blaming Bush" and then they laughed be cause that is the biggest joke. He can't make that decision on his own, just like he didn't make the dicision to go to war withough congress.

Do half truths equal a whole lie?

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Now on the news 5 min ago sounds like ALL instutitions in trouble are going to get bailed!! And another general public stimulas to try to keep the public falsely satified!

I heard maybe a TRILLION Bucks in bailouts and stimulas.

GET RID Of this Government! Start anew!!

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I suppose I should voice my opinon since I started this topic. I think there's a lot of PRO's and CON's to this matter. All I know is and am glad for is that at least 85-Billion $$ of our american Tax dollars get to stay right here in the the USA and not over seas somewhere else.

Ummm... not exactly. These billions aren't in the government's savings account. They are issuing additional debt that you and I and other taxpayers are responsible for. We will be paying a lot of this back to foreign investors.

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Borrow at 3-5% or something like that and earn 11% and retain 80% of the company(no fact check done) sounds like a good investment. Dont forget that a very, very large portion of other insurance companies use AIG to reinsure their own risk. Where would they go if AIG was gone?

Everyone wants to argue one point at a time. IMO we all need to step back and take broader stroke at this than political season allows.

Fannie and Freddie can hardly be called a bail as they were never a public company/private entity in the first place.

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11% interest...BIG DEAL.

Here's what those companies are charging you:

Credit Card interest: 11 to 22%

Line of Credit: 8 to 12%

Car Loan: 7 to 11%

Mortgage: 5.5 to 8.5%

Given the risk, I don't think the taxpayer is getting a particularly good deal. And these companies don't hesitate to charge much higher rates for folks with good credit and a low risk of forfeiture.

Perhaps the colateral is actually more sound than I've made it out to be, but I doubt the taxpayer will be making much on the deal. Don't forget what B.Tom noted: we'll be borrowing to cover the loans.

As I noted in an earlier message, the Resolution Trust bailout for the S and Ls will be costing the taxpayer close to a TRILLION BUCKS over 30 years...now add this deal to the debit side of our national account.

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Funny, this customer:

1. Doesn't use credit cards

2. Will give my local bank 5% interest to buy a car rather than paying 7-11%.

3. Can get a line of credit at my own bank for about 30% less.

4. Can get a mortgage for the same amount if not less at my local bank.

Why would I be impacted by "those company's" rates?

Bob

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Funny, this customer:

1. Doesn't use credit cards

2. Will give my local bank 5% interest to buy a car rather than paying 7-11%.

3. Can get a line of credit at my own bank for about 30% less.

4. Can get a mortgage for the same amount if not less at my local bank.

Why would I be impacted by "those company's" rates?

Bob

Agreed.

1. Never used a Credit Card

2. Pay Cash

3. Never need a line of credit.

4. Mortgage is 5.25% fixed.

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Given the risk, I don't think the taxpayer is getting a particularly good deal.

Time will tell.

The markets are up this morning.

A sign of optimism. wink

Like it or not, it needed to be done.

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Good for you...I admire your financial acumen and commitment to your local banker. I was just pointing out that the 11% that the citizen as taxpayer may receive is considerably less than the range of interest rates charged by these same corporate welfare recipients when dealing with the citizen as customer.

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Originally Posted By: Coach1310
I don't think what candidate or party really makes a difference in this situation.

But it does Coach as the president is the person putting a lot of these overseers in their position, and it's usually someone from their own party who is due a favor. If McCain gets elected, a lot of the same incompetent people in these positions will remain there. If Obama is elected, they will all be replaced. Whether they'll be replaced by better people remains to be seen but never the less, they certainly can't be worse. wink

Edit: It's time to clean house in Washington and voting in another Republican isn't going to do it.

Kid, what makes you so SURE they couldn't be worst? So you can predict the future now smile

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What I was trying to point out is that those companies are not charging me those rates because I shop for better ones. The only way they can get away with charging those rates is when they can find customers willing to pay those rates.

In these economic times, 11% is significant. Ten years ago it would have been less significant and your statement would have held more water.

Bob

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Ya Bob they seem to prey on those who cant find better rates because of their low or no credit ratings,assets.So how did they get to failing??? We're bailing em out??

WOW wheres my cut.

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You may be correct IF the risk premium is only 3 or 4%. Sure, inflation is down around 3% overall and conservative investment yields are around 4 to 5%...passbook is a miniscule 2% maybe. But on a national scale, where these corporate welfare recipients are in the market, they are charging the rates I cited earlier. Granted the collateral the U.S. is holding may justify a relatively low rate and maybe 11% is reasonable. But I truly wonder what the taxpayers net will be on this transaction..not only on the cost of capital we will borrow to do the deal, but the cost of losing strategic options as our national accounts continue to decline into the red.

For example, if our international role is severely restricted due to our inability to provide economic sanctions, intervene militarily if necessary, purchase Iraqi goodwill through payments to the Sons of Iraq, limit our ability to level Iran, and send Israelis $5 billion a year.

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Does anybody know the phone number to the Treasury department?? Cause I got this car loan that is eating me alive. Ive got an 04 Ford Explorer with 60,000 miles and I am putting some minor, but pricey repairs into it this week. With college costs, beer money, bait, beer money, gas, beer money, hunting season, beer money, cell phone, beer money, utilities and, BEER MONEY. I need somebody to bail me out. lol grin (gulp, my beer goes down) Any help will do. Thanks.

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