Is the $700 billion bail out bill going to work as it is written?

because very few things work as written. Will it infuse a stimulus into our economic system? I think so, but along the way a bunch of tweaking will occur. Let's place the safeguards back into the system that were removed in 1999. The reason we put them in there was a direct reaction to the Great Stock Market crash.

In our nation's leaders'[circa 1999] wisdom some of the safeguards that protected out economy from spiraling downward were removed. The purpose behind the decision to remove such safeguards was a noble idea, to provide affordable housing to all Americans. The problem occurred when affordable was changed to desired. When people borrow money, they should have sufficient collateral and the ability to pay back the loans. Buying stock on margin is no worse than borrowing money by hedging on the future.

In discussion with several home owners out in SOCAL, they informed me that people who own homes and borrowed using ARMs, rarely ever paid off their mortgages; instead the homeowners continued to borrow against their equity for their toys and such luxuries. They held a belief that equity in their homes would continue to increase, the future was always bright. The problem occurred when real estate began to decrease in value at the same time interest rates soared on the ARMs, causing decreased equity or even negative equity to become a reality. Bills still had to be paid, but the never ending loan vehicle ended.

When a small universe of lenders and insurers exist that control a vast majority of investment capital, you also place a huge risk on their success. Remember the old phrase - don't put all your eggs in one basket. We, [our nation and other nations] seemed to have forgotten the meaning of this simple phrase.

A more robust competitive population of lending and insuring institutions need to be established to help reduce the future impact of nose dives, when such practices as lending money to people who do not possess sufficient collateral or cash flow occurs. Having one major insurance group covering the vast majority of home loans, doesn't provide for a good management practice either. Short term greed caused even the insurance industry to let down their guard. The free ride ended, the pocketbook did not continue to be refilled from other lenders who insured other homes. Foreclosed homes did not resell.

When smaller institutions become insolvent due to bad lending practices or poor insuring practices, they are weeded out of the industry. The problem though remains that so many homes were being mortgaged and insured from the same few institutions, that when their poor management practices caused financial ruin to their companies, the entire nation [and world] was negatviely impacted.

Some major lending institutions are now being asked to serve as mini-Freddie Macs and Fannie Maes, without changing the conditions for lending and borrowing. Some of these institutions are balking at entering into those types of practices. Please note that President Bush had to rally the banks together to emphaisze his plan. So as I said, the plan will need to be tweaked to allow for improved management practices to be instilled into the plan.

The proposed fix appears not to solve the problem, but only appears to serve as a short term stimulus into the same type of system. The system has to be fixed. People need to be told that they do not possess sufficient collateral or capital to borrow huge sums of money. We [all people] need to learn how to live within our means. Another resolution needs to be made that removes incentives from the lenders [CEO/CFO/loan officers] for quantities of loans made. A different type of incentive needs to be established. Perhaps rewarding for performance over a long term - this item has to be sorted out - nobody should expect to receive more than an annual $100,000 bonus from any dealings. Their salary should compensate them properly. Perhaps such practces as with the Ben & Jerry Ice Cream Company should be modeled into companies and stock holders should approve such measures. [B&J - nobody in the company earns more than seven times the wages of the lowest paid employeee - adjustments can be made of course but this type of salary for CEOs/CFOs serves as a base line]

I'm no expert, but the experts got this wrong, so I feel free to add my two cents [some might say no sense]. Afterall I'm helping to pay for their mistakes, so I feel I have a right to voice my opinion.

We will recover, but we need to keep our leaders on their toes, and remind them that the desire for individual wealth should not overrule national wealth interests.

I have an MBA in Economics and I am nowhere near qualified enough to answer this question. However, in the spirit of blissful ignorance I answered "No".

You and I were on the same wave length. I actually thought the same thing......I haven't voted, since I haven't been able to do my "light reading" yet.....I still have 100 pages left to go until I'm finished with "Breaking Dawn".

By the way, I don't have the MBA in Economics that you have, however, do have 15 years in Finance and Economics Law and I will guarantee I won't be qualified to answer it either, EVEN after I read it!!!!!!

But vote on!