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Archive for November 11th, 2008

China’s Bailout Package – Not for the Banks!

us-chinaThe latest news in the economy is from China.  They are in the process of a 600 billion dollar bailout!  The reports I have heard thus far indicate they will be using the money for building major infrastructure projects…  The government reports have indicated the stimulus would cover 10 areas, including low-income housing, electricity, water, rural infrastructure and projects aimed at environmental protection and technological innovation.   Projects will include new railways, subways and airports and to rebuild communities, all things that incite consumer spending and bolster the economy.   The plan differs from the US 700 billion financial rescue package which has only helped strengthen bank balance sheets but has done nothing towards mandating any new lending or provide any support specific to investment projects…   China’s approach would seem to be much safer than what the US has done to date?!  In yesterdays news, AIG is getting another 40 billion?!   Credit card companies are acquiring banks so as to get in on the billions being handed out to banks!  Failing US automakers think they too deserve some of the pie…?!   To date, these hand outs don’t seem to be having much effect other than rewarding the poorly managed financial institutions that created and allowed this mess in the first place…   China on the other hand appears to have the right approach, build up the country from the bottom up, create opportunities, jobs, improve the countries ability to meet and compete in this  global market.   Perhaps just maybe some of both ideas would be good?  I can not believe that continuing to give my borrowed tax money from China to US poorly managed banks and the like is the right answer!

Most recent US news headlines from PBS:  

Government To Give AIG $40B More
November 10, 2008 · The move comes after American International Group already received more than $100 billion of the original bailout package in September. Why is the insurance group getting more money?

Treasury Rule Tweak Gave Banks Billions
November 10, 2008 · In Late September, a Treasury Department rule change gave U.S. banks a windfall of as much as $140 billion. A change to Section 382 of the tax code relaxed the limits on a type of tax shelter that arises during corporate mergers.

GM, Ford, Chrysler Want Emergency Aid
November 11, 2008 · Detroit’s Big Three automakers are asking the government for a bigger bailout. They received $25 billion in federal loans and now want an additional $25 billion. Congressional Democrats urged the Bush administration to use some of the $700 billion bailout for banks to help the car companies.

Nation’s Unemployment At 14-Year High
November 7, 2008 · The Labor Department has said the nation’s unemployment rate rose to 6.5 percent in October, its highest rate in 14 years. The report said 240,000 jobs were lost, worse than expected. This year, 1.2 million jobs have been lost.


Written by jointefforthost

November 11, 2008 at 8:22 pm