America is IN a recession, we're headed for a depression. I've been informed that with the problems following the Housing Crisis, we're going (slowly but surely) into a depression. Also, when America goes down, other countries are going with us.

So, in two of my classes we were talking about this and the economy, stock market, oil, and the bigger companies when someone informed me on the Bail Out Plan for America. What I can gather about this is this:
--It's a $700 billion dollar money plan
--People will be paying for this for many, many years in the form of taxes (yay *sarcasm*)
--It's still unsure where the money will go (to the people or to the big companies)
--If the money does go to the people, it will mean a lovely $50,000 check to every tax paying American (unless you're claimed as someone else's dependent)

I've heard several theories on the Bail Out plan, one being that they (meaning whoever is in control of the billions of dollars) are uncertain about giving the money to the big companies, for fear of it never making it to the people.

Buuuuut....they're afraid that if they give the people the money, the people are going to take it and get themselves into more debt by doing what was done in the Housing Crisis (i.e. buying homes they can't pay for with loans they can't pay back).

I've heard a few other theories and things about the economy, but what I've said is the gist of it. Am I wrong in my 'knowings'? Is there anything else major that I've missed?

((...I know it makes me sound stupid, but I am honestly proud of myself for finally ((thank god)) paying attention to things like this...))

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Make Love, Not War

LOL, some say we will MERGE with Canada and Mexico.
for a NORTH AMERICAN UNION..

pfftt...not going to happen.


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whatever

The bailout has little to do with the $700+ billion and everything to do with the things that got passed along with it.  For instance, thanks to the bailout bill, banks no longer have to keep reserves.  This has immense implications, but no one seems to be talking about it.   $700 billion is NOTHING compared to the mess we're in.

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Your past does not define you; you define your past.

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thanks to the bailout bill, banks no longer have to keep reserves.

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Quote: from shadowpool at 7:22 am on Oct. 11, 2008

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thanks to the bailout bill, banks no longer have to keep reserves.

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WTF? Seriously?

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Yes.

The new bailout law

Go to section 128:

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13 SEC. 128. ACCELERATION OF EFFECTIVE DATE.
14 Section 203 of the Financial Services Regulatory Re-
15 lief Act of 2006 (12 U.S.C. 461 note) is amended by strik-
16 ing `"October 1, 2011" and inserting "October 1, 2008".

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Financial Services Regulatory Relief Act of 2006:

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"SEC. 202. INCREASED FLEXIBILITY FOR THE FEDERAL RESERVE BOARD TO ESTABLISH RESERVE REQUIREMENTS.

Section 19(b)(2)(A) of the Federal Reserve Act (12 U.S.C. 461(b)(2)(A)) is amended--
(1) in clause (i), by striking `the ratio of 3 per centum' and inserting `a ratio of not greater than 3 percent (and which may be zero)'; and
(2) in clause (ii), by striking `and not less than 8 per centum,' and inserting `(and which may be zero),'.

SEC. 203. EFFECTIVE DATE.

The amendments made by this title shall take effect October 1, 2011October 1, 2008."

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The Federal Reserve Act

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2.Reserve requirements.

A. Each depository institution shall maintain reserves against its transaction accounts as the Board may prescribe by regulation solely for the purpose of implementing monetary policy--
i. in the ratio of 3 per centuma ratio of not greater than 3 percent (and which may be zero) for that portion of its total transaction accounts of $25,000,000 or less, subject to subparagraph (C); and*
ii. in the ratio of 12 per centum, or in such other ratio as the Board may prescribe not greater than 14 per centum and not less than 8 per centum(and which may be zero), for that portion of its total transaction accounts in excess of $25,000,000, subject to subparagraph (C).

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There it is!  0 percent reserves!

Post edited at 8:33 am on Oct. 13, 2008 by shadowpool

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Your past does not define you; you define your past.