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Comment by zukzuk | Hacker News Reader

Yup! Complete with the inevitable government bailout that socializes failure while privatizing profits.

Not sure why people point to bailouts as some sort of gotcha, they're loans, not free money. The US government made a profit from the 2008 bailouts:

> Early estimates for the bailout's risk cost were as much as $700 billion; however, TARP recovered $441.7 billion from $426.4 billion invested, earning a $15.3 billion profit or an annualized rate of return of 0.6%, and perhaps a loss when adjusted for inflation.

https://en.wikipedia.org/wiki/Emergency_Economic_Stabilizati...

Where can I go to get such favorable loan terms from the government? Oh, I can’t? I have to get monumentally wealthy by wrecking the economy and driving our society into its biggest financial crisis in 80 years first?

The PPP loans were literally this. They were even more favorable since most were forgiven.

And PPP loans were not available (legally) to individual workers, only to the Business Owner class. Sure, it was expanding the criteria of bailout from "superwealthy business owners" to "average business owners" and "politicians playing at business owners who set up a shell company", but that's not really refuting their point that the government only cares about protecting capital.

"Here's $600 to live on for 6 months, poors. How much could a banana cost? Oh, also here's $600,000 if you own a small business!"

> PPP loans were not available (legally) to individual workers

They were available to contractors. Workers got extended unemployment and forebearance benefits. If you have an actual solution to propose, go for it. But complaining with misaligned facts isn’t particularly productive.

> Where can I go to get such favorable loan terms from the government? Oh, I can’t?

Subsidised student loans, SBA loans, et cetera. It’s also noteworthy that TARP-like bailouts are no longer the precedent: guaranteeing deposits while letting the bank fail is.

Indeed, too big to fail is not seen as viable anymore, which should make the parent happy, but I'm guessing they have more ideological issues with these sorts of loans and of capitalism itself, unfortunately.

The governemnt forced banks to give out loans to people who couldn't pay them in the name of euqality. These banks sold the risk to investors as Mortgage-backed securities because banks aren't in the risk business but risk management: creating the Great Recession.

...

Trillions of dollars are given away to the poor every year in the US, with no expectation of getting it back.[0] Adding "favorable loan terms" on top of this will literally lead to the exact outcome you are describing in 2008. We can debate the bank bailouts, which I think is worthwhile, but comparing them to personal loans is naive.

[0]https://fiscaldata.treasury.gov/americas-finance-guide/feder...

> perhaps a loss when adjusted for inflation

How is that profit?

It's a profit if you don't count inflation, if you do it's a small loss, just as the article says.

So, a a small loss, profit if you don't count inflation, and giant profit if you count it in 1950 money, got it.

Well you can choose to understand it however you want, including comparing it to 1950s money for some reason, but that's on you.

Well, if you "don't count inflation", why stop there? Might as well count it in even more favorable ways.

I wondered if there might be a good reason for it, but you just snarkily rephrasing what I quoted tells me there probably isn't -- so it's a loss. Because inflation is not something you can just ignore, when I buy something with money I don't get asked if I want the money to be counted as 1980 money or whatever, it's always "now" money. If by the time the loans get paid back inflation ate up the profit, there is no profit, and the criticism of it socializing loss while keeping profits private remains valid.

My point is that it doesn't matter if it's a profit or a small loss, because people think companies were simply given billions of dollars of free money. The fact that the US government was close to or did break even from bailouts dispels this notion. So there is no socialization of loss while keeping profits private, as the companies had to pay out what they took.

> My point is that it doesn't matter if it's a profit or a small loss, because people think companies were simply given billions of dollars of free money.

You stated "The US government made a profit". You claimed that, in direct contradiction to what you quoted. Now you're shifting goalposts.

I just quoted the article. You're right, I should have quoted it fully but I didn't think it would get to this level of pedantry for a point that is not even necessarily related to the profit or loss of a bailout.

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