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don
Why are we doing this? Why are we bailing out companies? What would happen if we didnt? Isnt this a capitalist society...? So shouldnt these companies just roast? I just cant comprehand why we arent letting this play out, can someone help educate me?
Answer
AIG has 2.69 billion shares of stock.
1 year ago the stock was trading at $70, if the company goes under those 2.69 billion shares are worth $0. That pans out to a loss to the American economy of $188,300,000,000
The Governemt is putting $85bln of their money to save the company form going under. This should be enough to cover their losses so they can save the compnay. Hopefully enough to return the $188.3 billion back to the economy.
People often get distracted when they hear dollar amounts in the billions or trillions. To get a better understanding of what is going on here, put the scenario into a smaller economy of scale.....
We'll use your home and family for example:
Husband, wife, two kids, and a dog. Husband (Government), wife (Upper Class) both work. The oldest kid works and goes to college (middle upper class), youngest kid goes to school and does chores (middle class) , dog (lower class)does nothing but receives the benefits of the rest of the family.
As long as the husband, wife, and kid work they can support the family. The youngest can go to school, they earn a small alowence, they can buy some luxury items such as video games, and they get taken care of if they need it. The dog, can lay around all day, and be assured they get fed for free twice a day, and go to the vet for free when they get sick.
But say for example, because of some bad decisions (baught too many shoes, ran up bad credit card debt...etc) the wife goes broke and her job shuts down. The family can no longer support themselves, something must be done.
There are a few possibilities. First of all, nothing can be done, the wife become middle class, the family will not have enough money to survive, the oldest child will not be able to keep up, the youngest would no longer get an allowence, and the dog would die. Either way, the family no longer has the funds to continue on. Eventually the husband and wife get in a fight, she catches her husband in bed with the neighbor (China) they get divorced and she takes the kids and lives the rest of her live in a tiny apartment in poverty. Doing nothing isn't the best idea.
Secondly, the husband can give some money to the wife so she can pay off her bad debts and hopefully get back on her feet. A few months go by, she struggles, but eventually she is back up and running. The husband took a short term hit, the oldest kid had to work a little harder, and the youngest kid didn't get to buy any video games for a few months, but mommy and daddy turned it around and everyone is ok and the dog can continue to lick his own balls with a dry roof over his head.
Or the government can say "screw you mommy", and give the money he could have given to save the family and give it to the kids and dog. Now the wife is forced to leave, the oldest drops out of college and develops a drinking problem, the youngest blows all his money on electric dirt bikes and PS3s and the dog runs across the street to hump the neighbors poodle. In the end the husband is still broke, the wife is stripping at the dive down the road giving BJ's for crack, the oldest ends up with a cocaine overdose and dies, the youngest blew all of his money and now can't afford to pay the electric bill to play his video games and the dog has infected all the neighboorhoods dogs with VD.
The only logical solution is to try and bail mommy out and hope for the best.
You must remember... these are public companines. If it goes under, the "company" dosen't lose... everyone that is invested in it looses.... Every 401k, every IRA, every private investor..... Then on top of this, if these companies die, so does their billions of dollars of tax revenue.
Its not a matter of simply letting a company go broke... its a matter of taking billions of dollars out of our retirement funds and billions of dollars in tax revenue away.
AIG has 2.69 billion shares of stock.
1 year ago the stock was trading at $70, if the company goes under those 2.69 billion shares are worth $0. That pans out to a loss to the American economy of $188,300,000,000
The Governemt is putting $85bln of their money to save the company form going under. This should be enough to cover their losses so they can save the compnay. Hopefully enough to return the $188.3 billion back to the economy.
People often get distracted when they hear dollar amounts in the billions or trillions. To get a better understanding of what is going on here, put the scenario into a smaller economy of scale.....
We'll use your home and family for example:
Husband, wife, two kids, and a dog. Husband (Government), wife (Upper Class) both work. The oldest kid works and goes to college (middle upper class), youngest kid goes to school and does chores (middle class) , dog (lower class)does nothing but receives the benefits of the rest of the family.
As long as the husband, wife, and kid work they can support the family. The youngest can go to school, they earn a small alowence, they can buy some luxury items such as video games, and they get taken care of if they need it. The dog, can lay around all day, and be assured they get fed for free twice a day, and go to the vet for free when they get sick.
But say for example, because of some bad decisions (baught too many shoes, ran up bad credit card debt...etc) the wife goes broke and her job shuts down. The family can no longer support themselves, something must be done.
There are a few possibilities. First of all, nothing can be done, the wife become middle class, the family will not have enough money to survive, the oldest child will not be able to keep up, the youngest would no longer get an allowence, and the dog would die. Either way, the family no longer has the funds to continue on. Eventually the husband and wife get in a fight, she catches her husband in bed with the neighbor (China) they get divorced and she takes the kids and lives the rest of her live in a tiny apartment in poverty. Doing nothing isn't the best idea.
Secondly, the husband can give some money to the wife so she can pay off her bad debts and hopefully get back on her feet. A few months go by, she struggles, but eventually she is back up and running. The husband took a short term hit, the oldest kid had to work a little harder, and the youngest kid didn't get to buy any video games for a few months, but mommy and daddy turned it around and everyone is ok and the dog can continue to lick his own balls with a dry roof over his head.
Or the government can say "screw you mommy", and give the money he could have given to save the family and give it to the kids and dog. Now the wife is forced to leave, the oldest drops out of college and develops a drinking problem, the youngest blows all his money on electric dirt bikes and PS3s and the dog runs across the street to hump the neighbors poodle. In the end the husband is still broke, the wife is stripping at the dive down the road giving BJ's for crack, the oldest ends up with a cocaine overdose and dies, the youngest blew all of his money and now can't afford to pay the electric bill to play his video games and the dog has infected all the neighboorhoods dogs with VD.
The only logical solution is to try and bail mommy out and hope for the best.
You must remember... these are public companines. If it goes under, the "company" dosen't lose... everyone that is invested in it looses.... Every 401k, every IRA, every private investor..... Then on top of this, if these companies die, so does their billions of dollars of tax revenue.
Its not a matter of simply letting a company go broke... its a matter of taking billions of dollars out of our retirement funds and billions of dollars in tax revenue away.
Is there a Bike safe for a 5 year old?
DLaine
My son has been begging me for a dirt bike or pocket rocket for christmas for the last 2 years my question is are there any available that are safe for kids that young and if so where can i find one? I've found some electric ones that only go 10mph but they all say recommended for children 12 and over....he has a 110 four wheeler that he does pretty well on
Answer
Yamaha PW50
It has an automatic transmission.
Power restrictor (can be easily removed).
A throttle limiter (an adult can make a simple adjustment
to limit engine RPMs).
Training wheels are available.
http://www.yamaha-motor.com/sport/products/modelhome/40/0/home.aspx
Yamaha PW50
It has an automatic transmission.
Power restrictor (can be easily removed).
A throttle limiter (an adult can make a simple adjustment
to limit engine RPMs).
Training wheels are available.
http://www.yamaha-motor.com/sport/products/modelhome/40/0/home.aspx
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Title Post: This whole Govertment bailout thing is quite confusing, help?
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Rating: 94% based on 932 ratings. 4,1 user reviews.
Author: Unknown
Thanks For Coming To My Blog
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