tag:blogger.com,1999:blog-4900303239154048192.post4122465089714257241..comments2024-03-06T06:34:42.881-05:00Comments on EconoSpeak: The Return of RubinomicsUnknownnoreply@blogger.comBlogger4125tag:blogger.com,1999:blog-4900303239154048192.post-7224689391863908322008-11-26T12:14:00.000-05:002008-11-26T12:14:00.000-05:00This use of tax liabilities to mitigate or remove ...This use of tax liabilities to mitigate or remove a financial sludge is to me a great travesty and a mystery. The Fed can and has purchased such "assets" with funds conjured from the ether. <BR/><BR/>There is no tax liability created from a Fed purchase (a sludge disposal). The result of such a purchase is to throw lots of money into the system at the point of failure. The purchase of these "assets" using "appropriated" ($700B) money creates a future tax obligation. The recipients of the money being the same in either case it is a mystery as to why the American people would allow themselves to become indebted when this indebtedness is obviously avoidable.<BR/><BR/>I would appreciate a response to this query from the learned and esteemed economists that typically create blogs here on "econospeak". It will be an educational experience for me as I am quite bemused. What I am seeing seems to contradict my understanding of the economic universe.TheTruckerhttps://www.blogger.com/profile/10346127768102862741noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-9842209108624250542008-11-25T21:54:00.000-05:002008-11-25T21:54:00.000-05:00pgl,What, if any, due diligence has been done to e...pgl,<BR/>What, if any, due diligence has been done to evaluate the probable real market value of the toxic sludge that Citibank is likely to unload? I might feel a bit more comfortable about the enormous expenditure, call it investment if you like, if a real investor with a track record for determining market value were at the Treasury till. Say Buffet rather than Paulson.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-54468740112982830692008-11-25T14:08:00.000-05:002008-11-25T14:08:00.000-05:00Jack - the numbers for the financial services resc...Jack - the numbers for the financial services rescue plan can be misleading as they represent the values of traded assets and NOT government expenditures. So let's say we give $25 billion to Citigroup in exchange for $25 billion (some odd book valuation figure) in their troubled loans. The increase in the government debt is NOT $25 billion. Rather it is the difference between this $25 billion and the market value of the troubled loan. While this market value may be less than $25 billion, it is certainly not zero.ProGrowthLiberalhttps://www.blogger.com/profile/17138489390594441753noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-44693888327492439042008-11-25T13:50:00.000-05:002008-11-25T13:50:00.000-05:00"We cannot sustain a system that bleeds billions o..."We cannot sustain a system that bleeds billions of taxpayer dollars on programs that have outlived their usefulness, or exist solely because of the power of a politician, lobbyist, or interest group," he said."<BR/><BR/>For emphasis: "or exist solely because of the power of a politician, lobbyist, or interest group," <BR/><BR/>How does one assess the current run on the Treasury by the financial services industry in light of the second part of the statement? What's a few hundred billion, a couple of trillion, more or less when we're sacraficing the entire budget for the sake of a hallowed sector of the economy? Or should that be hollowed sector? Hollowed of any semblance of fiduciary responsibility.Anonymousnoreply@blogger.com