The whole financial bailout thing is getting ridiculous.

[Marco]

I'm sorry, but you're misinformed.  The problem we currently face is DEFLATION!!!!!

I could try to explain to you why you're wrong, but my arguments would probably be wasted.  If you want to know why you're wrong, just let me know.

No, it is definitely inflation.  The cost of goods go up because there is more money in circulation, thus money loses its value. 

Crank out money
Money becomes more common
Money loses value
Prices of general goods go up

Definition of inflation pretty much.

Clearly you understand the term inflation in only the simplest sense.  Would you like me to tell you why you're absolutely wrong?

Actually, I will neglect my work to explain this to you.

Step 1.) Create a bubble
Step 2.) Wait for banks to get really involved in said bubble
Step 3.) Wait until people realize there is a bubble
Step 4.) Let the bubble pop
Step 5.) Watch as banks stop lending to each other because they don't know how bad their counterparties' balance sheets are. 
Step 6.) Watch as banks are forced to pay higher interest rates due to step 5
Step 7.) Watch as consumers and businesses are forced to pay higher interest rates on their debts and/or lose their loans (lines of credit, car loans, etc)
Step 8.) This is the crucial step.  Watch as the actual amount of money in the hands of the nonbank public dries up
Step 9.) As liquidity decreases, watch people begin to lose their jobs as companies are forced to close places of business and lay off workers.
Step 10.) You are in a depression.

If you accept that step 8 follows from step 7, then I am right. 

I have on hand two examples of this exact progression:
Great Depressoin
Japan's lost decade (1990s)

I guess you should just learn economics.
Because you're horribly misinformed.

So yeah, basically, the way to prevent this from happening is to encourage interbank confidence by partially nationalizing those banks that are marginally insolvent and fully nationalizing those that are completely insolvent.  Which is what the intention of the bailout is, j-j-j-junior.

I was referring to creating debt (adding money to the US economy) and what the eventual result would be.  When you add air to a balloon where there was no air before, what are you doing?  Inflating it.  We're stuffing money into these banks, money that will eventually circulate, creating an abundance, and causing the price of general goods to inflate (IE, take more money to buy), as a result.  Inflation hasn't arrived yet, but it will eventually be the result of all of this.  You really didn't have to type all that economics knowledge out because it looks like you didn't understand  Xenons comment.  He was referring to a future event as a result of the bailouts, not current events or what lead us to this.

We're going to end up with horrible inflation because the government is cranking out money like toilet paper to pay for the bailout. I'm seriously considering getting a new computer now, before it kicks in.

To which you replied:

I'm sorry, but you're misinformed.  The problem we currently face is DEFLATION!!!!!

I could try to explain to you why you're wrong, but my arguments would probably be wasted.  If you want to know why you're wrong, just let me know.

I was correcting you in that the future problem will be inflation, to which Xenon was referring.

[Negi]

Not true.  It is inaccurate to say such a thing.  General inflation only happens if the money given to banks is actually lent out to the public.

[Marco]

Not true.  It is inaccurate to say such a thing.  General inflation only happens if the money given to banks is actually lent out to the public.

Negi:  Feel free to ask your economics teacher, or just search 'bailout inflation' on Google.  It isn't an inaccurate scenario to hypothesize.  I'd say an inflation scenario is more likely than any other in the future.  And a word of advice - you shouldn't try presenting your arguments as infallibe or untouchable, things are rarely so simple in any situation.  I'm inclined to agree with most of what you said earlier, but I definitely wouldn't want someone like you arguing my case.  Someone who can't concede valid points won't be seen as reasonable, and their arguments will lose weight as a result.

In other news:

http://news.yahoo.com/s/nm/20081114/us_ ... ies_1  (3 Major US Cities seek 50 Billion, may go up to 6)
http://www.reuters.com/article/marketsN ... pc=44  (Automaker bailout doubtful)

A quote from the automaker bailout, "They should take every step possible, including cutting executive salaries and bonuses, and exhaust all alternatives before coming to the taxpayers for tens of billions of dollars in help," Charles Grassley of Iowa said"  I agree with that statement, but I don't like the fact that they still seem willing to entertain to possibility of helping a failed business.  Cities are a little more reasonable but it still sets a really bad precedent.

[Negi]

Just searched bailout inflation.
Search returned concentrated retardation.

Desler, here's the problem with saying there will be inflation due to a bailout:  If inflation starts to increase past what the federal reserve wants it to be, they will just raise interest rates.  They prevent the economy from overheating.  They can do it at any time. However, at the moment, they definitely don't want to be raising interest rates. 

The fact is, if there's one thing the federal reserve knows exactly how to do, it's fighting inflation.

Is that better?

[Marco]

Just searched bailout inflation.
Search returned concentrated retardation.

Desler, here's the problem with saying there will be inflation due to a bailout:  If inflation starts to increase past what the federal reserve wants it to be, they will just raise interest rates.  They prevent the economy from overheating.  They can do it at any time. However, at the moment, they definitely don't want to be raising interest rates. 

The fact is, if there's one thing the federal reserve knows exactly how to do, it's fighting inflation.

Is that better?

So inflation will happen, so you agree, right?  Why are we talking about this?  I don't even care about the inflation so much as I do the fact that we're setting a poor example if we tread into any territory other then bank bailouts - albeit bank bailouts on their own are an unfortunate circumstance that makes the US appear weak in economic standing.  A weakness that could one day cause the financial foundation of this country to crumble.  A worst case scenario mind you, but a concern nonetheless.

[Negi]

I actually disagree that it will cause inflation at all

However, if there is inflation, we're solid anyway.

[mAc Chaos]

Desler, here's an article from the New York Times you might find interesting.

[Marco]

Fortunately, a few of our leaders understand the auto bailout thing quite well in terms of it being totally different then a bank bailout..  Obama himself though kind of worries me on this issue, as he is supporting the auto bailout.

[RazorclawX]

The bailout is for chumps. I totally can't wait to see this one pass and then the electric company complain and want money, too.

[AA7Dragoon]

I'm a graduated college student $40,000 in debt who can't find a full-time position because of cutbacks from the economy!  Where is my bailout!?!?

[Lavarinth]

I get near double our minimum wage, have a car loan and school loan almost paid off, live with parents, and own every current console and a PC worth more than one paycheck, where's MY bailout?!

[Aegis]

I'd say something, but I live in the wrong country.

[Lavarinth]

That's the glory of it all, YOU can request a bailout, TOO!

[IskatuMesk]

I don't live in the US and I will never work an hour of my life, where's MY bailout!?

[Aegis]

That's the glory of it all, YOU can request a bailout, TOO!

'Request'?  I don't... 'request' a bailout.  I DEMAND a bailout!