Socialism

Discussion in 'General Preparedness Discussion' started by rhynotyme, Feb 23, 2009.

  1. rhynotyme

    rhynotyme Guest

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    I know this will be an extremely unpopular opinion, but I want to voice it and then read the feed back. I have found that this is a very good way to learn about a subject rather than just reading definitions in some book.
    First though before you start questioning my patriotism, I am a proud American and veteran.
    Some are really coming on strong with the socialism issue. I have been reading encyclopedia entries and am not for sure that "nationalization" wouldnt be in this countries best intrest. I know it goes against the free market society we are founded upon but after the last energy crisis and what can only be explained as "gouging" by the oil industry the goverment may need to step in. As in the UK the industries required for the nation to operate the Govt steps in, such as the USPS.
    I could be incredibly wrong and I am sure many will let me know. But I feel this is a good a place as any to hear both sides of the argument (if there are two sides) LOL.
     
  2. Magus

    Magus Scavenger deluxe

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    Depends on what gets "nationalized"certain vital resources and manufactureing fine,but the banks should be Lex Talonis.why reward incompotent morons?
     

  3. TechAdmin

    TechAdmin Administrator Staff Member

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    Front page of Drudge says NO NATIONALIZATION straight from Ben ..
     
  4. jebrown

    jebrown jebrown

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    Let me ask you to explain why you feel that nationalization would be good for and improve this country?
     
  5. Canadian

    Canadian Well-Known Member

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    Nationalisation is bad. The only true cure for the crisis is to let the economy do what it naturally wants to do. Let it crash. Then let entreprenuers pick up the pieces and start new ventures. Buy low sell high. In a crashed economy even a person in a lower income bracket would have the capital to invest in stocks that would then grow in value.

    Currently the average person is priced out of investment. That's how the ruling class keeps control. They fear a market where even a common person can attain the ability to move up in the world. Nationalisation removes all possibility of civilian investment. If we can't own a piece of anything how do we ever move up in the world?

    The market must be allowed to crash to restore balance and provide a way in for people with lower incomes so they can become the wealthy or middle class of the future. All the bailouts simply postpone the inevitable crash and make the effects of the eventual crash even worse.
     
  6. Underdog76

    Underdog76 New Member

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    Or we could stop letting private banks create and control our nation's monetary supply...
     
  7. Canadian

    Canadian Well-Known Member

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    How would "we" do that? That's a pretty tall order for ordinary people.
     
  8. endurance

    endurance Well-Known Member

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    I think the price is too high to just let the markets do what they will do. I think there's value to nationalizing the banks, insomuch as, it gives the taxpayers a chance at some return on their investment. You can't simply let Citigroup fail. It has $1.97 trillion in assets. The FDIC insures most of those assets, which means the taxpayer is on the hook anyway, since currently the FDIC only has $40 billion in reserve. If the government buys the company, it can hold on while the market settles out, the good debt can be separated from the bad debt, and the assets can be sold. Sure, there's some chance it won't be profitable, but the losses will be far worse if the banks are just allowed to collapse, which would in turn bring down every major business in the US, from Ford to Intel and everything inbetween.

    The government can't sit idly by and watch us revert to the barter system. They couldn't deal with the crisis it would create. While I don't agree with everything this administration is doing, they didn't make this mess. And, no, I'm not necessarily blaming the guy before him, either. This is where we are because ever since Reagan was president, banking regulations have been taboo in the US. It's been republican presidents and democrats. It's been a republican congress and democrats. The blame game gets us nowhere. There is some value in understanding, regardless of what we can or cannot do about it. Consumer debt is a huge part of the problem and that means blaming you and me. The reality can't be simplified down into a bumpersticker.

    If anyone wants to understand the crisis, NPR has three great shows on the subject entitled "the giant pool of money", "Another scary show about the economy" and "Bad Bank" available via stream or podcast at This American Life. No partisan BS, just a thorough explanation of how bad we're in it, why, and what options are there to getting out. No matter what, this isn't going to be easy, cheap or painless.
     
  9. The_Blob

    The_Blob performing monkey

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    idk endurance, if "the taxpayers are paying for it anyway" wouldn't it be better to 'tear off the band-aid' as opposed to letting it hemmorhage in perpetuity?
     
  10. Canadian

    Canadian Well-Known Member

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    Endurance - If you let it collapse you're saving everyone money and creating opportunity. As it now stands the government has to pay off the toxic loans and the insurance on the toxic loans. If you allow the loans to default you only have to pay off the insurance on the toxic loans. That way you're only paying for half the damage and we're talking billions here. Everything that can default to a zero cost should be allowed to do so. As long as the toxic elements exist the problem will never go away.

    You're also assuming that there aren't enough resources to pick up the pieces and start over. If GM falls apart some private investor would scoop up the Bowling Green Kentucky Corvette Plant and start making cars for a lower cost than GM did before. Everything will revert to a lower sensible value to the point where normal people like you and I can get invested and become wealthy.

    The problem with what you're suggesting is that it does not fix the problem. It just makes the inevitable crash even worse. It's going to collapse and when it does it'll be a total implosion. It's better to manage a rapid collapse and rapid reconstruction than just put it off for as long as possible.
     
  11. dukman

    dukman Greenhorn

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    I have to agree with you. In a sinking ship it is better to head for solid ground than to stay put and keep bailing water. Eventually you will hit bottom either way. The faster it bottoms out the quicker we can recover.
     
  12. Canadian

    Canadian Well-Known Member

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    I don't understand why so many people want to keep things the way they are. Right now the way things are suck for about 96% of the first world population. Bring on the collapse. I'm ready. We're all pretty well prepared.

    I'm ready to change my place in the world. Let's let the economy reset itself. Just once I'd like to be on an even footing with all the people in the world who had everything handed to them on a silver platter - because I know - one on one - I can beat them at any game they want to play.
     
  13. Expeditioner

    Expeditioner Well-Known Member

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    Nationalization of industry in general has been a failure. Look at all the countries with nationalized healthcare. Its akin to military medicine. The general practice is mediocre and the specialist tend to be very good the problem is the amount of time that it takes to gain access to a specialist.

    If left alone the economy would more than likely stabilize and improve a lot faster.
     
    Last edited: Mar 5, 2009
  14. Paronoid1

    Paronoid1 Member

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    /cosign

    Well said, sir.
     
  15. Bob in Denver

    Bob in Denver Guest

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    Socialism? Show me something our government does well and efficiently.

    (crickets)

    As Margaret Thatcher said: "The problem with socialism is pretty soon you run out of other people's money."
     
  16. endurance

    endurance Well-Known Member

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    So if the world's banks all collapse, where is the money from the private investors going to come from? Thin air? I hate to say it, but you clearly haven't researched this topic deeply enough to understand the consequence of just letting things collapse. I don't like the way things are being handled either, but the consequences are insurmountable if you don't do something to address the problem. It may happen anyway, but I think you'd be well advised to stop wishing for the worst case scenario. I assure you, you're not prepared for that.
     
  17. The_Blob

    The_Blob performing monkey

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    why not, endurance? that's where the banks' money came from... :eek: :D ;)

    just look at the sickening practice of fractional reserve lending
     
  18. Herbalpagan

    Herbalpagan Well-Known Member

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    I have been listening that last few months to economists and "experts", politicos and regular people who I trust are smart. Letting the system fix itself and adjust naturally, really is the right way to go. There are some things that the government can help with, like jobs creation, retraining programs or even social programs to keep people from being out on the street while this adjustment happens.
    The thing is, I believe that many of the problems started when regulation on the banking industry happened and also when everyone in the country saw that the "American Dream" was their RIGHT and it was available without having to wait.
    Your housing cost should be about 30% of your income, whether it be rent or morgage. A bos driver should have no way of living in an $800k house! People should have to work for something they acheive...rent, live with parents, save to acheive that house. People need to learn to save to get that big screen TV instead of paying for it with credit. If houses weren't being made (by cookie cutters?) and weren't all that plentiful, then we would go to a "supply and demand" type of thing, which is where a free economy works best. Joe the plumber wouldn't have had to get a huge credit line to expand in order to jump into that contract to plumb those cookie cutter houses and now wouldn't be facing bankruptcy when the cookie cutter houses stopped being built. Joe's workforce wouldn't be having to be laid off because there was no work and those workers wouldn't be facing foreclosure on the houses that they bought....instead, Joe's business would have probably grown in a more healthy and natural way. His workers wouldn't have jumped on the housing band wagon and bought houses they couldn't of afforded, but would have gone into older neighborhoods and bought what was there and redone it themselves.
    That kind of cuts it into black and white, and I'll admit there are grey areas to all of this, but the point is: if we hadn't have lived on credit, we wouldn't have been facing this now. We are a group of more prepared and aware people, but honestly, does the rest of the country not understand that if you can't afford it, don't buy it? Business and banking will have to adjust to this same principle, it's natural and the financial world will be much more stable because of having gone through it the right way.
     
  19. set2survive

    set2survive Active Member

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    We have been confusing assets with debts for a few decades now. Bundling debts and selling them as if there were assets, but there not assests! The whole financial system has been one Gigantic Ponzi Scheme and now its coming down. Endurance made the statement "You can't simply let Citigroup fail. It has $1.97 trillion in assets." No, it has NO assets, it has 1.97T in debts!

    Socialism is to be avoided at all costs, nationalize only in emergency and only temporarily.
    We need to either replace the federal reserve or tightly regulate it, we need to abolish our insane tax code and install a simple flat tax, we need to some how get the SEC to do its job, and people need to be held accountable for fraud and negligence.
     
    Last edited: Mar 8, 2009
  20. endurance

    endurance Well-Known Member

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    Set, I agree, a permanent nationalization of the banks is a bad idea. It should be done as a stopgap measure to avert a greater crisis. We're not the independent America of the 1800s. The entitlements created under FDR have become some people's only safety net. How many people's folks could get by without medicare or social security. Both of those are, by strict definition, socialist programs. I'm neither for nor against them, but it's not realistic to cut those programs off right now, with no warning.

    In the same way, why punish those few Americans who have savings? If you let Chase, Citigroup, or Bank of America fail, how many Americans will lose their savings? How many will lose the credit card that provides the only means for them to pay for that car repair so they can get to work?

    Citigroup has roughly $1.97 trillion in assets and $1.97 trillion in liabilities. It's called a balance sheet. The problem is that they've run out of reserves, twice now, where their liabilities exceeded their assets and the government has had to step in. The fact is that they can't keep jumping in and out of companies like this. I would not be surprised if some Friday evening in the not too distant future, the government announce that they are taking over a list of banks and on Monday morning, the bank opens as usual, only under new and temporary owners. Eventually the assets and liabilities will be sold. Some banks will get bought out by bigger fish, others will be piecemealed. The government will have filtered through the books and will retain the bad debt to get it out of the market. Some banks will lose the government hundreds of billions, others will yield moderate profits. However, without intervention, it's a disaster that would make the great depression look like a speed bump.

    I don't like the idea either, but the more you learn about the crisis, the more you realize that without a functioning banking system, there are no jobs.