Mortgaging America
By Larry Johnson on November 25, 2008 at 1:15 PM in Current Affairs
Folks, do you truly understand the amount of money the Federal Government is promising to spend to deal with the current financial crisis? We are in uncharted territory and the traditional notion of a private sector is dead. While we still claim to believe in the notion of private property, the fact of the matter is that the Federal Government is now promising to spend 7.7 TRILLION DOLLARS:
The U.S. government is prepared to provide more than $7.76 trillion on behalf of American taxpayers after guaranteeing $306 billion of Citigroup Inc. debt yesterday. The pledges, amounting to half the value of everything produced in the nation last year, are intended to rescue the financial system after the credit markets seized up 15 months ago.
The unprecedented pledge of funds includes $3.18 trillion already tapped by financial institutions in the biggest response to an economic emergency since the New Deal of the 1930s, according to data compiled by Bloomberg. The commitment dwarfs the plan approved by lawmakers, the Treasury Department’s $700 billion Troubled Asset Relief Program. Federal Reserve lending last week was 1,900 times the weekly average for the three years before the crisis.
Let’s put this sum into perspective. For starters, the U.S. Gross Domestic Product aka GDP is a little more than $14 TRILLION.
Gross domestic product (GDP) is defined as:
the market value of goods and services produced by labor and property in the United States, regardless of nationality; (GDP replaced gross national product (GNP) as the primary measure of U.S. production in 1991).
Got it? The Federal Government is going to spend more than 50% of all of the goods and services produced in the United States.
There is another way to look at it. If you divide 7.7 trillion by 300 million (the approximate population of the United States) you get the magic number–$25,666.67. That is how much money every man, woman, and child in the United States is paying for this bailout.
Now, where is that money going? No one knows. It would be one thing if the Federal Government decided to send every person in the country a check of $25,000. Man, wouldn’t that be sweet. That would cover a lot of mortgages. But the Feds are not doing that. It is going to financial institutions and ultimately into the pockets of well paid, connected financial managers, brokers, and customers.
But where is the Federal Government getting this money? It is not sitting around in the vaults at Fort Knox. The Federal Government is borrowing this money. That means someone, somewhere is agreeing to lend us money but they want to be paid for it. So we are not just talking 7.7 trillion. There will be interest paid out on that as well.
Let’s look at this from a personal perspective. Let’s assume you have a traditional Ozzie and Harriet nuclear family–Dad, Mom, Joey, and Jill. Let’s assume you make $100,000 a year and that everyone in the household lives off of that sum. After you buy food, gas for the car, pay for the utilities, get the necessary clothes and shoes, how much money is left over? Whoops, forgot that you don’t really have a full $100,000. $25,000 of that goes to the Federal Government for taxes and social security. And we have not even calculated State and local taxes. Let’s assume that’s another $10,000.
So, instead of $100,000 you actually have $65,000 (100,000 minus 35,000). If your annual expenses (food, gas, clothes, etc) are $45,000 you have $20,000 walking around money (the technical term is, “discretionary income”). With this amount of money you could afford to pay roughly $2000 a month for a mortgage payment. That means you are carrying a mortgage of about $250,000 at an interest rate of 6.5%.
Under this scenario you don’t have a lot of money to do anything else other than live. Are we tracking?
Now let’s explain what the Federal Government is doing in these terms. The Federal Government’s annual income comes from taxes it collects from a whole host of sources. But then it takes that income and spends it on the salaries of government employees, buys defense weapon systems, and pays for social security and medicare. It also has to pay back the money it has borrowed (or at least pay the interest on what it has borrowed).
So on top of all of the existing expenses, the Federal Government is now borrowing more than 50% of all of the money it is planning to take in. That means one simple thing–the Federal Government is now acting like one of the low income borrowers who bought a house they could not afford. That is the foundation of the current collapse. And the Federal Government’s solution? Borrow more money than it can afford to repay.
We are postponing judgment day. But some point in the future, 3 to 5 years out, the amount of money we have borrowed will show up in our economy as inflation. Prices will start rising dramatically. Interests rates to borrow money will go thru the roof. And that will bring economic activity to a grinding halt.
Personally, I think we would have been better off just borrowing the money to pay off the mortgages. At least people would be able to own their own homes and then have some disposable income to use for buying a GM or a Ford.
(Release: November 13)
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Larry, you’re absolutely right. Its from the fire into the frying pan. But the pain will be felt later. This move from the govt. is unprecedented.
The amount of money being talked about is staggering and yet we still have children in this country going hungry and old people freezing to death in the winter. Makes you want to weep. But hey what did you think of Barky’s latest press conference? MSNBC called it BREAKING NEWS! So everytime knucklehead breaks wind or scratches his bum, MSNBC will call it BREAKING NEWS!!! Oh man, this is going to be a long four years.
Do you get tired of inane Obama smears?
Most of the writers here have moved past the irrational fear and loathing and have decided to help keep Obama and his asute choices on track to fix this country.
Ha, Ha, Ha! That’s funny man- astute choices- LMAO!
Stop the hate!
Hillary and Jones to name two.
Besides I was quoting larry, pay attention instead of rehashing out of touch idiocy.
After showing the utmost disrespect toward Senator Clinton (she is Senator Clinton to you Obot Clowns) — now you trolls tell US that she is an astute choice of your messiah.
You trolls are a bunch of sexist pigs.
Your messiah is a an inadequate narcissistic Academic gadfly who is way over his head. Even if he makes a few lucky choices — all of the economic mess and DEPRESSION that is coming will be on his and YOUR shoulder.
I see Axel-snot is still paying for brainless, clueless trolls.
What is with that faux fuhrer look Axel bot has going?. Blee
Oh, you are so right! He looks creepy.
(do you find the fact that all of the “astute” choices are former Clintonistas just hilarious? They aren’t so universally called “astute” Hpo and DK.)
Obama is attempting to recreate the Clinton years he formally degraded – but whatever is the Bamboozler to do?
I’ve no doubt a Clinton would be a better Clinton, but you’re right, we should make the best of Barry the bamboozler.
The saddest thing of all. The Obots told us all through the election we couldn’t have Hillary because that would be a dynasty, it would be Clinton II, Bill Clinton’s administration was a disaster (they never explained that one), they hated the Clintons, and my favorite, Obama shouldn’t let the Clintons anywhere near his WH! Now, of course, we see Obama desperately trying to BE Bill Clinton after he robbed Hillary of the nomination.
I knew all along this is what Kerry, Durbin, Kennedy, and Dashcle were up to. They were jealous of Bill Clinton so they destroyed him. Now they have a puppet and they’re going to try to re-create Clinton’s administration so they can be as popular as Bill. It won’t work. I just hope they don’t destroy the country.
I still loathe Barfy! That is not going to change. Why? He is a phoney, lying POS!
I’m warming up to Bill Ayers though. I understand the whole anti American thing now. Yep, ever since those stupid voters were willing to just let any loser, nobody, token black in as POTUS, I can see Ayers point of view. I am joining his fan club.
aren’t you the cute little extremist
A bot like you using the word extremist in any fashion is the ultimate in hipocrisy. Why don’t you go find your buddy troll bargal20 so the two of you can compare notes to determine who is more stupid than the other.
No sense of humor I see.
Stop the hate.
Nope, never tire of it.
Yes Strawberry, the amount of money mentioned is staggering: 7.7 trillion, that’s $7,700,000,000,000. That would buy lots of grain to feed the hungry–but how much is it? It’s hard to visualize. Okay, if you put them end to end, there are about 2 dollars in a linear foot, 5280 feet in a mile, 10,560 dollars in a mile. 7.7 trillion dollars? Well, Mars varies in distance from earth from 36 million to about 250 million miles. Without belaboring the math, I figure if you stretched the 7.7 trillion dollars end-to-end, the line would extend 3 times the distance from Earth to Mars at its farthest. Am I right? It seems absurd.
That One is going to bore us into a comatose state if the past few weeks is any indication. Bush couldn’t speak either but at least his press conferences were few and far between.
Has That One been on TV lately? Haven’t turned it on since the election. Joy to the world!
“it’s time for us to get mad as hell”
I may say I don’t understand WHY we are giving bankrupt corporations all our tax dollars without extracting some benefits for our side — but I do understand perfectly.
Just about every person in the House, the senate and the White House is now a fully-owned subsidiary of the corporate interests. There is NO one in Washington looking out for OUR interests. Our government put itself up for auction and has been sold to the highest bidders. Almost every person in Congress and the White House — including the incoming Obama administration — is bought and paid for by the corporate interests.
1. WHY are our government leaders NOT requiring that all the executives in the bailed out corporations take a cut in salary so that NOT ONE of them is getting a salary of more than $100,000 a year?
2. WHY are our government leaders NOT requiring that all the executives in the bailed out corporations be PROHIBITED from receiving any bonuses until ALL the government bailouts and “loan” packages have been paid back and their corporations are making a profit?
3. WHY are our government leaders NOT requiring that all the executives in the bailed out corporations agree to NEW REGULATIONS that would PREVENT this sort of financial meltdown from occurring again? President Franklin D. Roosevelt installed regulations that prevented another financial meltdown for the following 60 years … but crooks in our government worked hard to eliminate those regulations and “get government off the backs of business.” Gee, how’s THAT working out?
We heard over and over that the marketplace would drive out the scoundrels and correct itself … well, I hope we have put that canard to rest forever.
But I want to know WHY we keep pouring OUR good money into those corporate black holes while, for instance, Citigroup — which just got a nifty bailout — is going ahead with its plan to buy into the Mets’ stadium so the Citigroup executives can continue to live the high-life with their skyboxes, etc. … etc … etc.
One recent corporate bailout beneficiary asked OUR government to hurry up and give them OUR bailout money so their executives could get their BONUSES !!! Bonuses for what? For driving their company into the ditch?
Now it seems every company and state and city is going to get in line for a bailout — a bailout that uses OUR tax money, mine and YOURS.
Barack Obama took in more than $600,000,000 in his campaign — most of it from the very people now lining up to get their bailouts. And, NO, that money did NOT come in to Obama from the poor inner city blacks who opened their piggy banks to donate — that money came from corporations and their executives and the spouses and business partners of their LOBBYISTS who are now lining up to get OUR money.
In Iceland, the people are out in the streets rioting because their government is not protecting them during this economic crisis. We, here in America, are so dumbed down that we have no fighting spirit left and will just accept whatever our government — both the Bush administration and the incoming Obama administration — do to us.
And folks, Obama IS the third Bush term — as with Bush, all the corporate interests will be satisfied long before Obama will ever turn his attention to the needs of the poor and middle class.
We SHOULD be angry as hell and calling our senators and Congressmen demanding that they DO something to extract give-backs from the corporations getting OUR tax dollars in the form of bailouts and “loans.”
Here’s what we should be DEMANDING:.
1. NO Mets stadium for Citigroup
2. NO bonuses for any corporate executives getting federal bailout or “loan” dollars
3. No corporate executives getting a salary above $100,000 unless and until their corporations pay back the bailout or “loan” funds
4. Corporate executives getting federal bailout or “loan” dollars must DIVEST themselves of all private and corporate jets, all private and corporate yachts, all private and corporate “vacation” homes
5. NO corporate “retreats” or corporate “meetings” at posh resorts unless and until the corporations pay back the federal bailout and “loan” funds
Get angry …call your Congressmen and senators — whenever they deign to return from their two-week Thanksgiving “break” !!
Use my list of questions and demands.
CALL House members and senators by dialing the Capitol Switchboard at: 202-224-3121
WRITE a letter to your local newspapers.
Call a radio or TV program.
Take charge.
Be bold.
Talk to people on the street … talk to shoppers at malls … greet commuters at train stations … talk to people.
It’s OUR friggin’ country … we are NOT just guests here .. we OWN the place .. yes, WE own America … it’s OURS.
As an example of this outrage, this morning on CNBC one of the talking heads (ex Fox, dumb guy, I don’t know his name) said that OF COURSE the top ten Wachovia execs DESERVED their almost $100m gift from the taxpayers because it was a “legacy cost” and he couldn’t get outraged over fulfilling a contract.
We are picking up trillions of dollars of unfulfilled contracts that these guys created. They profited from them, and they are not meeting their contracts.
What we are doing instead is transferring their bankruptcy onto the American people. If I had a torch, if I had a guillotine, if I knew when and where the revolution was, I’d join it. This is well beyond outrageous.
where the revolution was, I’d join it
The Revolution Will Not Be Televised
Who owns Citigroup?
Here’s a web site that made me feel all warm and fuzzy:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=4524503&mesg_id=4524503
thank you, right on, I will use your list.
You know what lightacandle,
I’m beyond this. I don’t want to give anybody a dime. Everyone makes their own decisions. And the truth is that many people in this country and corporations just made some bad decisions. This is the one thing we are going to have to pay for. No matter how much money they spend, they can’t stop the train. I know, without the bailouts this will hurt us, but I’d rather the hurt be brutal and short than long and angonizing.
Either way the pain will come. No more money. We can not afford it. Let it crash, and then we will rebuild.
Well, I am game at the mad as hell part. i did that over the primaries. I actually took action. Unfortunately there are mostly dumbasses that lvie in America now. They won out. I can get mad as hell once again, but if those people are still living with care bears, hopey-changey rainbows and puppy digs, and sunshine flying out their asses, I think we are out numbered.
Nothing makes me madder than stupidity. nothing.
What’s worse than stupidity is, complacency! For example, I explain to Congressman Barney Frank’s supporters that while his partner, Herb Moses, whom Frank introduced as his “spouse,” worked as an executive for Fannie Mae; he not only pushed for more funding for the GSE but also failed to push for stricter regulations of this taxpayer largess. And, adding insult to injury, in the last several years, Frank has received more than $40,000 in campaign donations from the sub-prime lender we are now bailing out – along with Freddie Mac – to the tune of $700 billion dollars! I am met with glazed eyes. It is this lack of outrage that has enabled these hoodlums to win election after election, year after year. Because, after all, if this was such a big deal then, surely, the press would have been all over this before the election. (That was the stupidity factor kicking in.)
Too complicated.
You need to break it down to a catchy slogan, that’s what does the trick in an American Idol world.
I do think all this money is being given to the corporations in exchange for shares of the companies that the American people own. I know that is the deal with some of the bailouts, it had better be what’s happening with all of them. It is mystifying to people who are not financiers how the government can spend all this money when the government is actually broke. I am afraid down the road we will all be paying everything we make for it. (Unless, a future president can think of a cure like FDR did: WWII).
Well. I told you so…siince Day One of the Dem primaries, I said it will only get worst. Thousands, thousands, called to stop the bailout process> What did Congress do? They increased it to 850 billion dollars! It will get worst, now we have that phony messiah who will be in WH, with a Dem party drunk on poison politics, A bankruppted Rep Party which created this hell of a mess with unprecedented spending……I TOLD YOU SO! Now we need to stop this stupid mess, starting with that corrupted corporate controlled MSM. People need to to call every day and ask their neigbors to get on thoe phones, emails, Congress needs to know that, “We the people are just fucking tired of all the shit which has gone down in our corrupted system. We like to talk about banana republics-look around!
lightacandle, you are absolutely right, and so is Larry. When I want facts, experience and common sense, this is one of the sites I visit. Thus far, things appear to have gotten so far out of control as to almost be laughable…ALMOST. We who remain cogent and seek the truth are the ones who bear the responsibility to educate others so that eventually, something can be done about some of outrageous disregard for our laws, our Constitution, our Bill of Rights and our government’s present condition. There are still a frightening number of people who do not believe what we tell them because they actually think that if it was true, they would see it on television…and not all of these people are unintelligent, believe it or not!
Thank you for all you do and let us continue to brainstorm and work together to restore our country to its former grandeur.
Beautifully stated, lightacandle.
With your permission, I’d like to copy your post to email to friends and family who refuse to open their minds to the truth.
And I’ll send emails with all your points to my California “representatives”.
It’s all just proof that both the current and future administrations, and all of Congress, have no concern for the people, only for the big companies & company executives who finance their life-styles.
May they all burn in hell.
You are certainly welcome to send my post along wherever it might help to open minds and eyes and ears. Right now, the American public appears to be paralyzed with indifference or some weird belief that Mr. Hopey-Changey will cure everything.
I just heard Obama (on the TV) explaining that the Republicans and Democrats will have to work together.
Omigod, I suppose now that it’s been explained to the Republicans and Democrats, we’ll have no more partisanship in Congress and no more greed in our politics (major sarcasm). Yup.
I copied it (and credited you) and e-mailed it to 20 of my friends. Most of them live in the areas of PA that already knew what the hell was coming and tried to stop it by voting McCain. However, there are still a few who think if it was true it would be on television. It is so bad that one of them is coming to spend time with us over the holidays and I am worried about what the hell I can talk about without losing it!
Sick and tired of Obama asking, requesting, and explaining. What about F*****G “demanding” that for them to get the bailout they must concede the points raised by lightacandle! Where’s the f*****g mandate????
That is why we got this milquetoast POS as president! If he’s gonna act this way toward executives who have demonstrated (AIG’s retreat, anyone) that they are not concerned about saving their companies but just saving their bloody hand-outs, imagine how he’s gonna fare with Russia and Iran. They are gonna eat this pissant for dinner and use his bony ass to floss their teeth.
God the only hope we have at this point is that he never is able to assume the presidency.
Large amounts of money from the middle east to cheat his way into the WH.
Now massive amounts of money from the taxpayers to make himself look popular.
Money won`t work on foreign policy.
Making things up to validate your fear and loathing doesn’t do anything other than marginalize your opinion.
Get past lying about Obama and move to help fix this country.
Hey brother can you spare a dime?
Stop the hate!
HARP isn’t lying about Obama. “greenery” is lying about both.
Greenery can’t handle the truth:-)
Stop the hate!
The “duh” from greenery is part of the bot lexicon. Next he/she will be telling all here that they are “douche bags”, one of the favorite bot terms of derision.
“duh”
“douche bags”
boring…how nineties.
Get past lying about Obama ???
greenery, You can’t be serious when you make a statement like this.
What lies? and secondly what in heck does that have to do with the stark reality Mr. Johnson (and many others) point out.
What is amusing to me is that you don’t have the balls to say specifically what is “made up”.
When critical mass can no longer be avoided and the “great depression” is made to look like a blip on the radar of history, will you still refuse to acknowldege that this ain’t Tara?
Duh
Every penny identified as foriegn was returned
Claiming otherwise is a useless smear
You do not seem able to have a civil discourse. Do not be surprised if some people will refrain from engaging you. And their lack of replies to you mean far from agreement.
Yes I know
Extremists never like having their “truth” questioned
They much rather hanging out with each other spouting their fantasy dogma
Voices of reason are never welcome
If you were speaking with reason, we’d be more inclined to reason back.
We totally get that you are infatuated with 0bama. That doesn’t make what he tells you factual. I mean, I’d like exray vision ….
Use of the word “Duh” and calling opinions “smear” won’t sway anyone to your point of view. Present an argument in a civil manner if you are sincere in being an advocate for your views. Good luck.
Defcon
Calling Obama a non citizen that won the election because of middle eastern money is a smear
There is much rational to respond politely to
The amount of disinfo repeated here in comments is staggering
At least larry and susan have stopped deleting refutations and responses
Its an opinion you disagree with. Grow up please if you want to engage the more interesting people on this blog.
1. Larry and Susan never deleted refutations and responses unless they were banal, off-topic, libelous, or lewd. So that isn’t why you’re posting here.
2. The amout of disinformation you spout is at least an order of magnitude greater, so that isn’t your reason for posting here.
3. Your statement about there being much rational to respond politely to is in direct contrast to your impolite attitude and irrelevant tantrums masquerading as coherent argument.
4. You shouldn’t speak of smears as though the only ones doing it are against That One. You trolls who worship That One are the mopt venal, vindictive bots I have ever had the unfortunate luck of coming in contact with.
Before you respond to this post, you ought to think carefully about what your side of the street looks like before criticizing ours.
Well, if he had to return it that only meant he got caught. It also proves that he took it in the first place, doesn’t it? that would not make it a lie. That makes it a crime, he got caught at, but never punished for. Let me know is your master, Lord and Savior ever apologizes or admits his mistakes and is willing to suffer consequences for it. Then we’ll talk, loser!
And yet, he refuses to release all of the records from his campaign financing …. gee. So. I guess he’s not as “clean” as greenery would like to believe.
Are you serious?
You ever heard of the FEC?
The bush run FEC?
Sore loserville becomes a lonly place once normal people move on
Extremists however relish their fringe status
It gives their malignant ideas cover from too much scrutiny
I thought we were talking about your hero the Messiah. When did you change the conversation ??? … is shrub the best you can do …? I can’t for one moment imagine using that lying POS for my personal measuring stick, but hey …. you go.
You truly are a stupid bot. Just look at your dumbass statement. Regulatory oversight in the Bush administration has been a big, fat zero (0).
So much for your half-baked, half-wit logic. As I said before, go find your bot buddy bargal20 so the two of you can spend some quality bot-time figuring out what you’re going to do when none of the money you’ve been anticipating from That One (TM) is going to come through. Nope, you’re going to have to actually work for a living, slacker.
FYI little ‘bot:
FEC Will Audit McCain But Not Obama
Tue, 11/11/2008 – 16:58 — Judicial Watch Blog
The agency created by Congress to enforce campaign finance laws won’t audit the biggest fundraising operation in political history—Barack Obama’s presidential campaign—despite rampant allegations of fraudulent and questionable donations.
The Federal Election Commission (FEC) won’t conduct an embarrassing audit of how Obama raised and spent hundreds of millions of dollars during his presidential campaign but it will complete a rigorous probe of Republican John McCain’s campaign, according to a political news site.
McCain gets the automatic audit because he accepted public financing but Obama refused it after initially saying that he would take it. In fact, he is the first presidential candidate to decline public funding in the general election which evidently means that he gets a pass on FEC scrutiny.
The agency could and should still audit Obama’s massive campaign coffers, but that would require four of the FEC’s five commissioners to vote for it. The scenario is unlikely because it would launch a lengthy, potentially messy and high-profile investigation of a sitting president.
Obama shattered fundraising records by raising more than $600 million during his 18-month presidential campaign, more than $150 million in the month before the election. Much of the money came from small mystery donors whose names the campaign won’t reveal and some of it is suspected to be from foreign sources.
Federal law does not require campaigns to identify donors that give less than $200 during an election cycle and Obama got a staggering amount of contributions—$160 million—from such sources that won’t ever be revealed without an FEC probe. Many of them gave money via the internet using obviously fake names or nonexistent addresses.
Just this week Obama vowed to increase government openness with a new level of transparency and accountability. Pointing out that the Bush Administration has been one of the most secretive in American history, the president-elect announced that he will use cutting-edge technologies to give Americans access to his administration’s records. Perhaps he can start by disclosing who financed his historic presidential campaign.
We need proof that he really returned the tainted money — and exactly where the funds came from.
We are told that he’s given tainted money to “charity” — if so — which charity?
He is already a proven liar — so his word is worthless. Proof is required and he give nothing to back up his word.
You realize you are talking about less than 100k of 600 million ?
Wow. Such a forceful argument and such contempt for how America runs its elections. To say nothing of the prepaid gift cards donated to the campaign that are just.plain.not.tracable … your stupidity is staggering.
More fantasy
You need to stop believing things that are not true
Maybe you need to stop trying to hold reality at bay by chanting “yes we can,” “We are the ones …” etc. You are right on one level. The campaign is over. It’s shut up and put up time. Something That One has never.done.
ME-chelle. It represents seed money for her new line of clothing–early American Divan.
Hey Greenery…
Obama has been bought by the internationalists along with a complicit DNC and a media being paid off.
The evidence is clear. Obama has taken donations from anywhere and everywhere..No scruples because winning means everything to Obama and his minions
Be careful what you wish for in life. Obama’s people are already complaining that he becomes president at the worst time in 70 years.
Question green thing..
When can I start calling it the Obama Depression
Duh,
How do YOU know that? The FEC wasn’t even able to look into where over $250 m came from.
If you don’t like the opinions on this site, get out. This is a site for people who don’t like Barack Obama. That’s our Constitutional right, you know that gd piece of paper your leader doesn’t understand.
tek, thanks for telling it like it is. I admire your spirit!
oh, we’re about to be ‘fixed’
Fixed as in “neutered?”
is that:
or is it:
get past lying Obama?
Nicely done. Of course the second is the better response.
This is change I am scared to believe in. We can’t do it. We have to get back to a sensible economy that produces things instead of shifting around the wealth.
The pain will be felt very soon. Our enemies are gathering seeing an opening and will influence events to satisfy their ends.
There are those that wish national suicide.
This is the time to stand up and fight.
Or the Russians and Chinese will lead the world
http://www.drudgereport.com/flashrur.htm
Where are the grownups? Before this latest round of spending, the Fed had created more money in the previous three weeks than they had in the past 28 years. I shudder to think what the updated statistic represents.
The older I get, the less respect I have for people in positions of authority and power.
respect is different than truth. What you are starting to realize is that people in authority and power don’t always make the right decision. This is wisdom. It is called a “call to authority” and is a major fallacy that most people make. Just because you are in a position of authority doesn’t mean you are always right. You can be just as wrong as anyone. Truth doesn’t come from authority. Truth comes from premises that lead to correct conclusions.
…based on sound assumptions
And, just because you are in a position of authority doesn’t mean that you are the smartest, or have other’s best interests at heart. I feel that Obama doesn’t match other parameter here. This certainly was reflected in how he treated his own constituents and the failure of his privatization of public housing scheme.
I think this election has made us either all grow up more, or become wiser. Great points.
Hey Citizen70, that’s what I said on November 4…I’m voting for the grownup!
I had not heard that statistic before but if it is correct, we are in deeper doodoo than I thought. We will burn up the presses printing money like that and throwing good money after bad.
BTW…For me, the best part of getting older is being able to say “No” and getting away with it. For example, if someone asks me for my SS number or address or to “sign here”, I just say “No” if I don’t want to and they never say another word! It’s amazing…..maybe we who are 50 and older should try it to our government and see what happens.
toni and citizen, thanks for sharing the great things about getting older.
Saying “no” might just be what our govt leaders need, they act like spoiled children. And I’m sick of seeing Obama’s pouty face as it is.
This jewel from Barney Frank:
Sue-prise, sue-prise! You give someone hundred of millions in greenbacks with no strings attached and your upset at the outcome?
when did he say this?
I HATE SNAKES!!!
You’re dead on target with that post, Mr. Johnson. The question about the bailout no governmental official wants to hear is Where is the money coming from? Because their only answer is to point to the back room, where they keep the printing presses.
They’re going to destroy the life savings of financially responsible Americans to buy a little more time for their own financial irresponsibility.
I prefer the honest theft of taxation over the concealed theft of inflationary monetary policy. That way at least you know what you manage to earn and set aside will have some actual value when you need it.
Thanks for this post. When people criticize this ongoing, massive and growing bailout, the pat answer is that there is no other choice. Not true. We could have let those too big to fail finally fail. They are now too corrupt to not fail. The government could have “tarped” more directly to the people and the real economy. There are choices. None of them may be good, but the biggest choice being made is who is protected and who pays.
I am an AA female Hillary supporter. Larry I agree with you. Hillary and later John McCain tried to tell everyone how to handle this crisis by taking the bad mortgages and putting them into an entity similar to the one that handled the last housing crisis. Obama disagreed. Roll back the clock to 1995. Obama is the one person in the US who is most responsible for the economic melt down and the loss of serious monies in people’s retirement funds and 401Ks. He was one of the lawyers who sued Citibank in Chicago in federal court (1995) accusing them of racial discrimination in housing lending and won (1998). Court entered consent decree mandating loans to risky borrowers (Link 1). Bill Clinton was compelled to accommodate court order. If people ever find this out they will turn on Obama like a mad dog. Democrats stopped Repubs from putting regulations on Fannie Mae & Freddie Mac (2003 & 2004) & prevented proper oversight (Link 2). Dems & Obama are most responsible for Wall Street melt down. THIS IS THE TICKING TIME BOMB THAT THE MSM DID NOT REPORT BECAUSE OBAMA WOULD HAVE LOST THE ELECTION AND IF KNOWN NOW IN GREAT NUMBERS WOULD DESTROY HIS PRESIDENCY.
Link 1: Legal document showing racial discrimination case, outcome, and attorneys of record. Find Obama’s name on page 4 of document.
Link 2: Watch third (especially Bill Clinton at 8 min mark), twelfth, and fourteenth video down on right side of page.
http://clearinghouse.wustl.edu/detail.php?id=10112&search=source|general;caseCat|FH;orderby|caseName;
http://www.youtube.com/watch?v=ivmL-lxNy64&feature=related
People actually voted for the democratic crooks (Barney Franks, Chris Dodd, Meeks, Maxine Waters, etc. who made them lose their money. It would be funny if it were not so tragic.
thank you for those details and you are so right. People who support Obama absolutely have NO CLUE that he is one of the players in the economic crisis.
This is the result of a propagandist main stream media. The average American has more or less trusted the MSM over the years and haven’t come to the realization that the media they watch isn’t the media of Walter Cronkite’s day. This “info gap” needs to be filled–quickly.
But only a few of us, as compared to the whole country, seem to know all this. Or care. Barney Frank actually ran a campaign commercial saying, the Republicans got us into this mess and now, as Chair of the House Finance Committee, he needs to stay in office to fix this. AND, EVIDENTLY, PEOPLE BOUGHT THIS TRIPE Frank, Pelosi, Reid, Obama, … they must be laughing their heads off at the vacuousness of the American voter.
Thank you for this information Wisewoman. I saved it then started googling around for more details. Freerepublic(I know I know, !!!!!) also did a thread on this information as well back in October.
Why didn’t McCain run with this information? He would have wiped the floor with BoBo and this nightmare would be over with.
Athena the Warrior: “Why didn’t McCain run with this information? He would have wiped the floor with BoBo and this nightmare would be over with.”
I, too, am astounded that McCain didn’t run with all the negatives available on Obama. I switched parties in order to vote for McCain, and now I’m beginning to feel that maybe he wanted to RUN for president, but didn’t actually want to BE president. To my mind, there seems no logical reason for such a lackluster campaign except that the Republican Party knew what was coming down the pipes and decided to sit this one out. It’s true the Republican brand was sullied after Bush, but there were just SO MANY negatives to play with in regard to Obama, and instead of using them, he comes out complimenting him. Very gentlemanly of you, Mr. McCain, but now we have Mr. Obama for the next four years.
A bit O.T. – I’ve done a little reading up on Rahm (Auerbach) Emanuel. The guy sounds like he’s about a half psycho, and he sounds like he may be trying to jockey his way up through the ranks so that he, too, can have a shot at the Oval Office at some time in the future. Just sayin’.
Ashy, Emmanuel as POTUS…That’s a very scary thought.
to Wisewoman – you correctly connected all the dots together on the cause of our current economic strife here in America and globally. I say globally because it is my understanding that many of the other countries financial woes have also to do with them getting involved in the terrible sub-prime mortage lending practices. You did what the MSM chose not to do and that is showed how Obama, in fact, was the beginning catalyst for banks to have to loan to any and all who wanted homes, know matter the circumstances.
So now that Obama got us in this big mess to begin with, who will he borrow from to pay for that huge economic stimulas package he wants in January? I think we all know the answer to this question – why, of course, China will be more than happy to borrow us more money for the umteenth time. And why not ask Saudi Arabia for another loan? Isn’t it a frightful thought that if we keep going down the course of borrowing from China & Saudi Arabia, that factually someday they will own more of America that America owns of itself? What is wrong with our leaders?? And, thanks, Obama, for your hand in getting us into this disgusting predicament. God help us when Obama gets the full reign in January!!
Thanks again, Wisewoman, for the great piece you wrote.
Anyone on this site may repost any of my comments anywhere, at any time.
Thanks Wisewoman for compiling this. Do you mind if I share it via e-mail?
Wisewoman, thanks for that reminder about Obama’s involvement! When I read that fact a few months back, I nearly choked on my coffee. No wonder he remained mum when McCain responded by coming to DC after the Dems said that McCain’s presence was needed to get the bailout done.
It just seems to me that McCain had a problem with vanity — he didn’t want to look too bad of a guy — and you had the race card issue which was so effectively played by Obama and those who wanted him selected. The truth squads I’m sure also had something to do with this because of the legal threats networks faced with some antiObama ads.
But the Republicans could have made this fact known when the bailout talks started. I believe they didn’t because mostly the Republicans did not want to win. For one, I heard repeatedly from everyday Joe Republicans that they wanted to see the Dems take the blame for this financial crisis so they could regain Congress in 2010, and for two you didn’t have any real investigative reporting being done by Fox News and all probably for the same reason among others.
I really feel that the only way our country will be able to effectively criticize Obama is if AAs like yourself do so publicly. The stranglehold of threats of being called racist is just too overwhelming for many of these racist news reporters.
It’s funny as a Liberal, I never really cared that much about race, although I’ve been more than aware of racial issues and discrimination; I just always tried to treat everyone fairly and with compassion since I come from a multi-cultural family. I really thought we could get post racial in how we deal with things, but this election really opened my eyes. I was so hopeful in the beginning that Obama could take us to a higher place as far as race relations were concerned. Little did I realize that he just intended to use it as a wedge to further divide Americans and get himself elected.
I really hope that we can get beyond this and live up to MLK’s dream wherein people are judged by their character and not otherwise.
Well, thanks for listening
Is there no way out of this mess?
Hillary or Burst see my comment above.
Hillary or Bust,
There is a way out of this mess..But it’s not pretty!
At the moment in time when it is viewed by all in this country that we are giving up our sovereignty both economically and globally and the threats become crystal clear will be the time that we tell the rest of the world to go shove it.
Other countries only own our infrastructure till the day we tell them they don’t
Other countries are protected by the US only until the day we tell we won’t
We have a 14 trillion dollar economy
We have a military equal to the rest of the world combined.
Soon we won’t be blathering about the injustices of the Iraq war or investigating those that kept us safe..
My prediction…America is going to be bad ass!!
Watch out world!
We need the world, we’re indebted to other nations, ours is a global market, we are no longer an agricultural economy, no longer an industrial economy, our military strength is really for deterrence….don’t think we can play hardball without auto-repercussions. Besides, “they” selected an androgynous skinny for POTUS, questionably American, that might have been put in power to say to the world, We walk softly and carry no stick…..don’t know, but something is mighty strange.
fire all of congress and don’t allow their replacements to associate with businesses in any way shape or form.
Better yet, let’s send the guilty to prison…
Better yet, let’s put them all in a pit somewhere and forget about it. Some one will have to diguise themself as a lobbyist, and will lure them with the promise of a big party and free dinner with many many strippers and alcohol.
No that’s too mean. Someone will have to make sure they lower food/water into the pit.
NO!!!! Then we are paying for their freaking room and board. They make electronic bracelets. Make them work for nothing until the debt is repaid. All of it. There are remedies and if they aren’t creative enough, we’ll make new ones. Cuomo for Attorney General!
Work during the week as you suggest and then stock and pillory on the weekends.
Or working on the “infrastructure?”
But seriously, can’t these organizations be “sentenced” to tutoring in schools that don’t measure up? Can’t we find methods for making a contribution that — when put alongside the replacement of the lost money and the lost confidence — actually constitute a contribution?
They can work at whatever during the week and I am all for it. But at the same time, we need to truly punish these white-collar hoodlums to send a clear message that such chicanery will not be tolerated.
I would bet there is a large amount of criminality surrounding the whole thing, kickbacks, “campaign contributions” made with taxpayer dollars earmarked for specific projects, things of that sort…
Just as in Chicago…
Mr. Johnson, I agree that we are kicking the can down the road.
When the devil demands his due, there will be hell to pay.
This relationship between global economies and national self preservation is going to reach a critical mass at some point and in some form. It will not be peaceful.
Wait until all the hedge funds (63 trillion) find creative ways of laundering their debt in the long term.
Isn’t it a “Tragedy of the Commons”?
I so enjoy LD’s articles and what NQ brings to the table.
Thank you.
Sovereign wealth funds
Did you just see how britain sold out their position on Tibet to make nice with China?
Here’s some explanation here:
http://dakiniland.wordpress.com/2008/11/22/wheres-the-lone-ranger-when-you-need-him/
Due to the enabling of export economies like Saudi Arabia, Japan, and China, the United States has been able to avoid tax increases, support growing wealth among its richest citizens, and preserve the dollar as the international currency. This has been true since the Reagan years. Countries like these have given us money so we can turn around and buy their products. They have basically agreed to lower living standards in their countries so that they could hook into the benefits of a stable US economy with its safe financial system and lack of financial dramas. This is no longer the case.
Larry, you’re absolutely right but it is starting NOW. I manage payments on a number of credit cards – personal and corporate. I noticed a couple of months ago that rates are rising DESPITE the bank bailouts and the lowering of rates by the FDIC.
One Corporate card jumped, for no reason, from 7.5% to 21% last month. It was 22% this month. Others have gone up fractions of points but THEY ARE ALL GOING UP.
Everybody, pull out your paper billing (it’s more difficult to keep track online) and make yourself a spreadsheet to keep track of your interest rates each month. They are creeping up and the banks are taking more and more of your payments, as well as getting Government handouts. Why are people not screaming about this?
Oh I forgot. So many like Obama thought they shouldn’t cap interest rates.
Larry,
I agree with your analysis about our financial situation. However, BO and DP are doing nada about correcting the debt that this nation is assuming. In fact, they want to enact legislation that will make our financial and security weaker. With Daschle, we might get universal health care but how are they planning to pay for it?
I live in CA and we have one of the highest unemployment stats. However, I agree with the Republicans that the state needs to attract businesses by giving owners tax incentives to help their firms and create more jobs. BO’s job program through building roads and infrastructure can only go so far. It’s been done before in Japan and it was a disaster. The bottom line is BO doesn’t have a clue about the economy and that’s why he couldn’t answer any questions at his press conference.
Except for the Republican media, the progressive and liberal media are simply a mouthpiece for BO. The public is not reading blogs but getting their news from CNN, MSNBC, FOX, and the major networks. When you listen to their analysis, they are fawning over Barky. It’s sickening. This is censorship.
Until 2008, I was never a fan of Rush or Hannity. Now I am. They are telling the truth but unfortunately the other side (citizens that voted for Barky) are not listening.
Ain’t that the truth.
Me too. But think about it, many people on the left are conditioned to hate conservatives, especially the well know ones. So the truth won’t matter until a rock falls on them. Most will wake up, but, as with the right, a few will not let go.
This post hits the nail on the head. No one wants their tax money going to the businesses. Most people are giving up, believing the propaganda that it will save millions of jobs and help the economy. The problem is simple. These CEO’s EXCPECT to get paid more and more each year. They want higher bonuses every year. They equate this to “growth”. But the measuer is really the growth of their bank accounts. THAT is the real problem.
It is like a greedy child that gets everything they ask for and then when the parent is broke and can’t afford anything more, they throw a fit.
Just like with a spoiled child, eventually our government is going to be broke, then all the money we gave the spoiled child will be for naught. ONLY THEN, when these companies have to start cutting executive bonuses and cutting back on their expenses, will the spoiled child learn from experience, you can’t have your cake and eat it too all the time.
Our government is now totally and utterly corrupt. People are going homeless and jobless, and their solution is too give more money to the people whose greed started this mess. It is quite simply adding feul to the fire.
Think about this when you do your taxes in Janurary. That money your paying to our government is going into the hands of men and women who live in Multi-million dollars homes, who ride on planes in first class to their thousand dollar a night suites with marble floors, while you swaller and save to be able to afford to buy groceries. We are all fools.
I don’t think anyone is giving up, or believing the BS.
I think people are astounded at the lack of intellectual acumen coming from Washington.
BTW, I grew up in Chicago, under the fist corrupt Daley — this is what it’s like when the average citizen is smarter than his government.
Government will just raise taxes.
personally I say the PERSONAL ACCOUNTABILITY needs to start. Hell no I shouldn’t have to pay off some other person’s mortgage. Most of them either had no business getting a mortgage or they were plain greedy and got more home than they could afford. People actually learn something most of the time if they have to suffer from a mistake they made. What will happen if their mortgage is just paid off? They’ll believe more of the same, Government Granny will bail me out so I don’t have to worry about being responsible. Where are they learning this from? Ah yes, the Government.
This isn’t the case with some. When this mess started, I was lucky enough to get a fixed mortgage. Even still, I was making about a 1000 to 2000 dollars EXTRA after all the bills. Then when the bottom fell out of the market, everything became almost twice as expensive. My grocery bill DOUBLED. Now I am lucky to eek out a couple of hundred a month.
So far this year I have paid over 30,000 dollars in taxes. I would rather see that money given BACK TO ME, to invest in my house or help pay off MY MORTGAGE. Not go to some rich cat who can afford to pay someone to clean his house. Give me a break. Stop making excuses for these rich people to use YOUR money to make themselves richer.
So far I don’t see anyone giving money to any one other than people who are already rich.
I didn’t say shit about helping rich people. And I didn’t say shit about anyone getting a normal mortgage. I said people who were greedy and got more home than they could afford and people who have shitty credit. I would like to get back all of the taxes I have paid too. But a mortgage bailout wouldn’t help me would it?? Read my comments before you start going off.
As for your expenses, are you still working? what kind of car do you drive-is it a big vehicle or get good mpg? have you cut back on eating out and your grocery bill? Before I am asked to bail out anyone, they damn well better be doing all they can to help themselves first. I have a small home and still only have a couple hundred extra a month and I did not overspend and I live very modestly.
It’s pretty unbelievable. My problem is, I’m trying to figure out if Nancy is purposefully trying to bankrupt our country or really doesn’t have a clue and is so beholden to the special interestests and that is the reason she is driving us towards colapse.
AND…all of this is BEFORE O-shit!’s huge spending and promise for a HUGE , AGAIN, Stimulus package, which, according to his previous promises, WON”T DO ANYTHING BUT AID HIS Special Interests and backers.
OH , OH, and the latest move by O-shit!? He hires the Congressional Budget Director Orszag to be his Budget Director. IS THAT THE MOST PITIFUL YET? Oh yes, he will REALLY help change this economy.
It’s pretty unbelievable. My problem is, I’m trying to figure out if Nancy is purposefully trying to bankrupt our country or really doesn’t have a clue and is so beholden to the special interestests and that is the reason she is driving us towards colapse.
AND…all of this is BEFORE O-shit!’s huge spending and promise for a HUGE , AGAIN, Stimulus package, which, according to his previous promises, WON”T DO ANYTHING BUT AID HIS Special Interests and backers.
OH , OH, and the latest move by O-shit!? He hires the Congressional Budget Director Orszag to be his Budget Director. IS THAT THE MOST PITIFUL YET? Oh yes, he will REALLY help change this economy and wasteful spending.
funny
Maybe he was absent the day when they were asking the Freddie/Fannie questions?
As a visiting extraterrestrial observer of humanity, to use your colorful metaphorical vernacular: you are up shit’s creek without a paddle!
-As a visiting extraterrestrial observer of humanity, to use your colorful metaphorical vernacular: you are up shit’s creek without a paddle.
Galt, Master Thrall of Planet Triskelion
Obama is no Clinton. According to his financial plan, its obvious that he is a re-distribution democrat, not a growth democrat like Bill Clinton. At this time of economic meltdown, obama will be nothing but a disaster for the nation. Wait for 4 years, and see the outcome.
Seems we already know the outcome and I don’t like it!!!! Once 4 years have past we may never recover.
If this goes on, China will be the new economic superpower in a few years. Americas influence will decline drastically. We’ll be forced to compete with china, russia, and the islamic terrorists at the same time. In that situation, America will loose. We got to get America back on track.
This happened before when there was an economic threat from Japan. But we prevailed. But with Obie in charge, I doubt we can do it again.
We’re not the same, you’re assuming an even field, and that simply isn’t true.
The US still has the capacity to innovate, producing ideas that will create assets, cleaning up and restructuring our government, again.
Still a sound investment, when not overrun with mediocre crooks.
No one comes close.
China produces cheap shit, no one even wants to buy it anymore.
And if the American economy goes, they all go.
Russia is so corrupt, it can’t even compete with China, despite it’s energy delusions.
$7.7 trillion is almost as much as Obama spent on his campaign!
Ohh, my name is greenery, stop the hate:-)
Your posts put a huge smile on my face. Every single one!
Bad mortgages most resulting from the involvement of that wonderful group ACORN is amounting to an excess of $900 Billion which over the next couple of years will result in a minimum of 60% foreclosures, all of which caused the domino effect on the entire economy.
But let’s not worry, Saviour Obama wants to inject a minimum of an addition $500 Billion (though estimates are closer to $800 Billion) into borrowed money to kick start the economy on Jan 20th, 2009.
Had the government listened to Hillary months ago and bought up the mortgages causing the problems, the government would have equity in the loans and responsabilty in the eyes of the world financial markets. Instead America flushed Billions down the toilet in give-aways.
Do not forget to add to the total another 1/2 Billion dollars in debt that Obama will cause as a result of forgiving his Campaign Finance Co-Chair Penny Pritker in forgiving her unpaid fines of $460 Million for her collapsed Sub-Prime Mortgage bank!
Listen to Obama’s call for infrastructure work as part of his Billions in new borrowings. Strange world that Chicago is in need of $27 Billion of capital injection for infrastucture for the 2016 Olympic games alone. Isn’t life grand having a POTUS that is so determined to keep his handlers happy?
Infrastructure investment should be a central part of any economic recovery package:
It will directly create new jobs, stimulating the economy by putting people to work and putting earnings into their pockets.
It will produce a tremendous demand for building materials, construction machinery, etc, which will produce still more jobs.
It will repair our long-neglected energy and transportation systems, essential for any competitive industrial society to prosper, and essential for national security. These are presently quite literally falling apart. Repair isn’t really an option; it’s a necessity.
If we’re going to have to live with increased deficit spending to work ourselves out of economic crisis–and no one of either party has suggested how else we can do it–we should be spending on something that promises a future payback. National infrastructure improvement and alternative energy actually do.
Obama apparently knows all of this.
Here is a little lesson on how well government works.
I am paying CASH for a foreclosed house. My closing date has been shoved back twice because Fannie Mae can’t hire a decent title company to prepare documents. If I don’t close on time, I owe $150 per day. If they don’t get their shit together, I have no option. Get it? When there is no competition, there is no inducement to perform. Government is a constant NO BID CONTRACT. And they suck.
Oh, and one more thing. Those infrastructure jobs require physical labor. Do you for one moment think that the UNIONS aren’t going to have their hands all over that? How many white men will it take to supervise a job site? And then when no one wants to do the PHYSICAL work that is mandatory for an INFRASTRUCTURE job, who do you think they gonna call, ghostbusters? Have you ever driven through Texas and looked at the faces of the people doing the WORK? You need to get out more.
Wow.
Just wow.
Speaking of Obama, did you figure the kickbacks, and such, into those numbers?
It’s the Chicago way…
Honestly, it’s just like living in Chicago, with the patronage system full of incompetent mediocrity, all looking for their handouts, and never any room for new talent, and new blood.
Fortunately, though, it’s federal, with enough people still able to slap down the Chicago style corruption, one way or another.
Chicago government wasn’t known for it’s real time intellectual brilliance…
I don’t figure we should be criticizing the deplorable state of the Obama presidency until the guy is actually president, or his economic recovery plan before we know what his plan is.
People seem to like blaming the government for everything that goes wrong, while crediting the private sector for everything that goes right. That’s a gross oversimplification and a gross distortion.
Just take away all levels of government organization, regulation, and services for a couple of months and see what happens.
While I agree with you in theory, my dealings with bureaucrats over the course of the last 24 years have left me with a distinct impression that they haven’t the foggiest notion of what is going on. Just my take on it.
Sorry, I look at how Obama got to the presidency, his connections, his complete lack of skill.
I wish it was different, it isn’t.
He hired the worst of the 90’s mediocrity to run the treasury, understanding the real situation on Wall Street, he should be outraged, instead he continues the criminality, supply side, enabling it.
At the very least, he is corrupt.
Best to stay realistic, no false hope.
His economic team, his reaction to the crime on Wall Street, and his campaign told me everything I need to know, about him.
Is it spelled “crooked?”
Reading is a needed thing on your list Cynic, as the only infrastructure I talked about was the need by Chicago for $27 Billion in order to host the Olympics, one of the major contentions the IOC has against Chicago hosting the games!
Obama knows this and will funnel funds in support of an event that his handlers from Daley to Jarret will prosper.
So don’t talk of and greatness of Obama’s plan when it has attachements to it that involve the crooks who amassed hundreds of millions to elect an unqualified puppet to POTUS and who has proven through his lavish expenditures for self promotion in times of financial troubles that he has the answers and knows what they are!
I’m a visiting extraterrestrial who has been observing humanity stumble and fall and I think am long overdue for a hiatus from your uncivilized “civilization.” In your vernacular, you are up shit’s creek without a paddle.
–Galt, Master Thrall of Planet Triskelion
Or perhaps with a paddle but without a boat.
Thank you Larry for sounding the alarm. I am shocked that these bailout proposals have become almost routine, without resulting in any questioning of their propriety. God save us.
LMAO I have all my monies as Quatloos at The Triskelion Intragalactic Bank.
Galt, get me a contact at that bank.
I would, but their name is not easily translatable to English. OK here goes I’ll try anyway: Mr. Click-click-zoink-flonk-zoink at 1-8googleplex 3434245-4567443.
nickname:
Al Gore.
Kidding! Saw the ‘google’ and thought of him.
lol. but you got my extra large pizzas right, galt?
We’re screwed.
We’ve been screwed…
More like “sheared”.
Baa.
Hey, this past October we maxed out the digits on the National Debt Clock. No one can ever say we didn’t accomplish something of lasting significance.
(They recently added another digit, so we’re good to go until we hit a quadrillion.)
http://www.brillig.com/debt_clock/
Credit card interest rates are climbing no matter your credit rating; 401k’s and nest eggs are dwindling(we have a very small nest egg that just lost 4,000 last month and that’s in very conservative,supposedly low risk portfolio). Electricity, heating fuel, gas and food are wiping out our biweekly paychecks so we can’t save any more and the government now wants to take more of our taxes and give it to banks and Wall street to buy a little more time. Well, you know they have a name for this in the field of addiction–ENABLING. Enablers do everything for the addict or alcoholic in order for him or her not to feel the pain and to ’save’ them. Enabling does no good, sooner or later the addict must feel the pain to get better. Many a wife, mother, father husband has bailed their relatives out only to prolong the inevitable. The person crashes and usually by that time there’s no money left to bail them out. So I say let the economy hit the ground, it’s already fallen off the cliff. Let it hit now while a few people still have a job to cushion the blow. If we put a bandaid over a gaping wound without stitching it up it only gets worse and will eventuallly bleed out.
LJ,
As usual you are spot on. I had a conversation with a friend around the time of the first 700 billion, an Obama supporter. I told them in a few years we will be paying big time for this in terms of inflation. They agreed and voted for the guy anyway. I guess if we take five years at the outside before all this hits, we will be well into the second term, and then it will not be Mr. Obama’s problem. He will do a Bush and pass it on to the next guy.
There will be more pain felt as students try to get their loans in January which will also offset another round of mortgage failures, as the loans are tied to Fannie and Freddie, and foolish parents mortgaging their future for their lazy children’s addiction to entitlement. Anyone wanna bet about the one’s “citizen volunteer programs’, to take up the slack for unpaid loans, and trying to ensure an education? I recall we used to phrase that as a draft.
I wonder if we will end up back where we started, indentured servitude(formerly to tobacco plantations) Now to Citigroup and the likes
Just a little reminder to any FReeper types on board:
Your Republican Party has finally succeeded in wrecking our economy as they’ve been trying to do since your beloved Reagan. And in so doing, you’ve also caused the charlatan Obama to become president.
Now keep blaming Clinton as you are so trained.
Have you staggered off line and ended up here, bud? No one blames Bill Clinton here. We loved both the peace and the prosperity. But that doesn’t mean we don’t despise those assholes in DC and Chicago calling themselves “democrats.” No excuse for misappropriating a fine, old party designation to use to cover up lies, deceit and raping the electorate.
It’s a big ol’ internets and Republicans do peruse these boards. You see, you can do that without posting, bud. And btw, I despise those azzholes calling themselves Democrats – they’ve change me from lifelong Dem to a man without a Party.
Well then, sweetie ….
When you find yourself a “Freeper,” you address yourself to him or her. Don’t take automatic fire at people you don’t see. That’s called delusional paranoia. There’s enough of that in the water that greenery is drinking, get it?
That’s quite an unprovoked anger there hon – I’ll leave you to your board monitoring duties.
I lurk here all the time and so do lots of others. Your posts really rub me the wrong way. In my opinion, calling people you don’t know delusional and telling strangers what they should and should not do at a site that isn’t yours is presumptive and odd. You are an obnoxious ass, sweetie.
And “Freeper” is such a marvelous term of endearment in your world I guess?
Sorry, no Republicans here.
I have to come clean and admit… I am one. Well, I still have the card anyway. Though it may not really matter, as I don’t see the point right now in ever voting again… at least in the near term.
Borrowing money comes from two places. The first is the Federal Reserve. The government only needs to pay for the interest. But too much loans means that the currency loses value. That’s Bush’s legacy.
The other way toget a loan is to borrow it from the central bank of another country, likely owned by the same people who own the US Federal Reserve. But this time, the principal must be paid back as well. The benefit here is that this is external currency and doesn’t affect reduction in US currency value as much.
Larry is right though. If they let big companies fail, that would mean that a lot of currency would disappear. This would increase the value of the currency. And if the government gave the PEOPLE $25,000 each, you could kickstart the economy while not having to worry about inflation. Increased value would also mean that paying back loans from other countries would be cheaper.
So why won’t Bush do anything? What’s he waiting for?
Bush has done things for nearly 8 years. Let’s not forget that all of the policy makers currently dealing with the national economic crisis are Bush appointees. We’re witnessing the culmination; the cumulative result. I’d just as soon he not do anything dramatic on his way out the White House door.
That’s true. But I wish we had someone with more gravitas. I don’t see the new boss as being any better than the old boss.
That’s what the buyers were thinking when they made their choice ….
True enough.
At least Obama has half a brain…. he has also surround himself with some very smart people…… it is always party time with the Republicans and the Democrats have to come in an clean up the mess… Reagan did exactly the same thing…
No, he hasn’t.
I hope youre not buying into that bullshit.
Too bad.
ROTFLMAO
“very smart people” who were complicit in this travesty during the Clinton Administration. Clinton continued these policies that were already set in motions. We need to be honest that Dems/Repubs all had a hand in this. Obama’s econ appointments seem to continue the legacy.
Agreed.
Rubin, for instance, was instrumental, along with Gramm, in deregulating.
Wondering if perhaps the business community was in need of some deregulation in the late 90’s, I thought maybe Clinton had good justification for allowing this, but he didn’t.
Though the political pressure must have been enormous –
I do seem to remember the “free market” garbage being thrown around, and the idea business leaders wouldn’t bankrupt themselves through greed and stupidity, the private sector being better run than government.
I was younger, then.
Clinton left the federal government with a budget SURPLUS. Remember that? And who exactly created the largest deficit in the history of this country?
I read somewhere that Bush has decided not to do anything and let the Democrats fix things. He has left such a mess along with the Democratic-controlled Congress, I don’t know who could fix it. I don’t have much confidence in this bunch of incoming Democrats.
What happened is that the Newt Gingrich-led House let Clinton know in ‘94 that he wouldn’t get what he wanted with them in control. So he in turn, stiff-armed them by threatening to veto anything the House put forward that wasn’t paid for either by cutting spending somewhere else or by raising the necessary funds. And veto he did. Newtie got boxed into a corner by the much brighter Clinton. I still laugh at that.
Well, they won’t have the Republicans to put the blame on. They have two years. They better understand that Americans have seen “shock and awe” and our attention spans are not terrific … even when we are told “Mission Accomplished” from the deck of a big, spiffy ship.
Ritamary. Clinton left the economy in such a strong state that even with 9/11, a war in Iraq and Afghanistan that Bush did not pay a penny for, Katrina, hellish forest fires all over the country, other hurricanes, etc. it still took Bush and his cohorts (Obama, repubs & dems) 8 years to completely TANK THE ECONOMY. TO ACCOMPLISH THAT TASK TOOK SOME SERIOUS f–k UPS.
What travesties were started ?
So says you. I haven’t seen much of a brain at work on That One. He is just another gasbag politician at work.
Those who can do, those who can’t say they are college professors … hahahahaha
Indeed. And those who shouldn’t, assure quality.
Then can you explain why BO and the thugs on the hill are saying squat about what Bush is doing. The only one saying anything is Bush and it sounds like he has already cleared it with BO. If BO had a problem with it, why isn’t he saying anything? Why isn’t anyone saying anything in DC, except we need more money.
I kind of think that whatever shrub does is going to get a big thumbs down and/or be ignored. Isn’t he on presidential life support while the media is all working on their bowing and scraping in Chicago with the Play President?
I think I’m gonna be sick…
You do know that when you take out a loan, you’re borrowing from yourself(taxpayers), and paying yourself back(taxpayers). Why don’t we just cut out the middle man?
Then who would collect all the interest? And what would be the point of that? This way we pay interest on both ends… for the transfer of funds that don’t actually even exist except on paper. No, the
sheepsheeple have been left to grow long hair… and now we are being herded in and being “sheared”. I hate to admit that my more radical minded friends were right all this time… but it looks that way from here.How many intellectual morons on the site today? If you listened to Dr. Savage’s show yesterday you know what I’m talking about.
Sarah Palin To Close The Deal For Chambliss In Georgia
Bringing in the ace in the bottom of the ninth.
http://patriotroom.com/sarah-palin-to-close-the-deal-for-chambliss-in-georgia/
Larry,
Your $7 trillion, although likely not even close to that in reality (much lower), is small compared the amount of wealth/value that has been wiped out of the economy in the last year.
With $8.5 trillion wiped out of the stock market,another $7.0 trillion wiped out of housing values, and consumer spending could be down as much as $5 trillion, it puts what the government is attempting to spend into context.
You can blame the Bush adminstration for all the money being spent to keep this country out of a depression. There is a lack of leadership in this country right now and the soon Bush gets out of town the better.
What would the cost have been to pay off all the mortgages?
the problem has moved well beyond just mortgages…. the housing bubble started this mess… the financial derivatives that were created that were supported by mortgages had a multiplier effect… the credit default swap market is about $40 trillion, although not all of that related to troubled mortgages…
hundreds of banks in this country are going down…
credit markets have completely frozen… some companies that need money are out of luck… there awill be thousands of company bankruptcies…
Thanks, Paul.
This may put things in perspective:
Jim Bianco of Bianco Research crunched the inflation adjusted numbers. The bailout has cost more than all of these big budget government expenditures – combined:
• Marshall Plan: Cost: $12.7 billion, Inflation Adjusted Cost: $115.3 billion
• Louisiana Purchase: Cost: $15 million, Inflation Adjusted Cost: $217 billion
• Race to the Moon: Cost: $36.4 billion, Inflation Adjusted Cost: $237 billion
• S&L Crisis: Cost: $153 billion, Inflation Adjusted Cost: $256 billion
• Korean War: Cost: $54 billion, Inflation Adjusted Cost: $454 billion
• The New Deal: Cost: $32 billion (Est), Inflation Adjusted Cost: $500 billion (Est)
• Invasion of Iraq: Cost: $551b, Inflation Adjusted Cost: $597 billion
• Vietnam War: Cost: $111 billion, Inflation Adjusted Cost: $698 billion
• NASA: Cost: $416.7 billion, Inflation Adjusted Cost: $851.2 billion
TOTAL: $3.92 trillion
http://www.ritholtz.com/blog/2008/11/big-bailouts-bigger-bucks/
your point shows you how badly economically mismanged this country has been by the Bush adminstration…. he is costing our grandchildren plenty… a nice parting gift by the Republicans and Bush… a economic tsunami….
A lot of the money that is going to the financial institutions are either loans or equity stakes. Much of it will be paid back and the government could actually make money, as they did when they bailed-out Chrysler.
The systemic risk, shock and cost to the country would be far worse if the government did nothing. If either AIG or Citigroup went down, we would be in a far worse economic tsunami right now.
The cash is being used to stabilize the financial system.
And is GM goes down at this point in the economic cycle the economy would fall much much further down a hole.
The government bail-out is likely to be money well spent. Almost all the countries on the planet are having to go into big deficits right now. Without the government we would be in far worse shape.
However, you can thank Bush for mortgaging our kids future.
A lot of the money that is going to the financial institutions are either loans or equity stakes. Much of it will be paid back and the government could actually make money, as they did when they bailed-out Chrysler.
Whatever you are smoking buddy pass it over here.
No really. I know obarry told you that but he lied to you. Get over it.
One tiny example out of many:
A separate Treasury program for buying debt linked with home loans has already quadrupled, from about $7 billion, a government official said on condition of anonymity.
http://www.bloomberg.com/apps/news?pid=20601103&sid=ai_aErzotzx8
How many mortgages that are now considered bad debt were for properties that were way over valued to start with? Got it? Even for an overheated housing market plenty of people paid too much. The houses were not worth the mortgage from day one. And since the property price collapse how many defaults were for properties whose valued has now dropped and may never return to what it was. You do not make money buying that kinda debt.
Also more just for the hellofit outside of the mortgage/housing price collapse: You can kiss those hundreds of billions of dollars in loan guarantees good bye.
I was not talking about the cash being used to buy back debt, although the government could make money there.
I was talking about the cash going directly to the financial institutions. Read what I wrote. The government is taking equity stakes in AIG and many banks.
http://online.wsj.com/article/SB122156561931242905.html
http://seekingalpha.com/article/103858-increased-government-investment-in-banks
Your point is a different point.
However, the government is still making an investment in buying the bad debt at a discount. There is still a chance that if they buy the debt at a deep enough discount and things were to improve in the future, they could make money. It depends on what they pay for the debt? That is the debate.
No doubt it is likely that the bailout is going to cost the government and tax payers a lot of money, but in some of their investments they will likely make money. My point is that you just can’t look at the costs as a 100% loss to tax payers, which Larry’s article seems to imply.
Read this article by one of the most highly respected money managers on the planet.
http://www.washingtonpost.com/wp-dyn/content/article/2008/09/23/AR2008092302322.html
7.7 trillion dollars certainly seems like a lot of money. I wonder how much of that amount is going to pay for money owed by financial institutions to pay for derivatives they are supposed to be covering. If this country is using real wealth to pay off gambling debts of investors and risk takers, then why don’t we all just lay our heads on the guillotine and get it over quickly.
Personally, I like the idea being promoted by certain out-of-the-mainstream political figures to (1) cancel derivatives; and (2) declare universal bankruptcy of a universally corrupt financial system and restructure it.
Easier said than done, I’m sure, but I don’t see anybody connected to Obama expressing any ideas along those lines. To the contrary, they all seem to be enabling players who have quietly stood by while the current crisis came into full force.
But with inflation it will be less than that. Inflation is “built into the system”. There will always be inflation because there is never enough money in existence to pay for the debt and the interest on the debt.
Nobody listened to Savage? An intellectual moron is someone who’s smart but let’s ideology get in the way of their thought process. The example was Noam Chomsky.
Why don’t we stop loans and credit and make everything pay as you go? Obama can call it the Pay As We Go Deal.
Savage is just a moron… no intellect there. Far worse.
Flat tax and pay as you go. Wanna drive? Gotta pay tolls. Send your kids to school? Gotta pay tuition – even from kindergarten. Firefighters and police? Gotta pay a local crime protection fund. Health care? Pay for each procedure. Food? If the farmer had a good year -it’s cheap. If the farmer had a bad year – an apple’s $10.00.
What are you going to do under that system if you Bob lose your job?
There is a reason government was created over the last 3,000 years.
And there is a reason to keep a government clean.
Russia, and China, don’t function, in part, because there is no real brake on graft, and the like.
That alone makes them a bad investment.
There are many who would disagree whether Russia and China do not work. About 1.8 bn people. Maybe it does not work up to your standards, but it works. And there is a good chance these will be the powers of the future, not the U.S.
Get another one. I have a diverse skill set. Your parents asked you-what do you want to be? You chose one thing. Mine asked me-what do you want to do? I can do many things.
Can you get paid for it, though?
ROTFLMAO
If the economy goes, worldwide, doesn’t matter if you’re a wannabe PR man in a PR Washington –they can’t pay you…
How about a farmer? When you’re starving, are you gonna find a way to pay me for the food I just grew? How many of you grow some of your own food? If you don’t better learn while you can.
Grow my own, and some people DO starve.
I remember my father telling me of the depression, and making a soup out of pickle juice. (He was young, born in 1930).
They had no food, or would go without eating, for any length of time.
My Russian grandfather was a chef, had opened a restaurant, in Chicago, my Polish grandmother, a cleaning lady.
No work, for quite awhile, and they didn’t always eat.
It can happen again…
Great, good luck when the unemployment rate creeps to 10%…. then you can be paying $10 for you apple and paying for your private security forces… may be huge areas of this country that are no-go zones though.
the sum of the parts has tended to equal more than the whole… that is why society and humans have succeeded.
Anarchy or a society solely run by corporations as your argument seems to imply will benefit some, but not the many…
Great explanation, Larry. You have scared the living daylights out of me. What can we (I) do to change things? Seems like the route has been chartered and we the citizens are just bystanders on a sinking Titanic.
Thanks to ALl of you for the most cogent intelligent commentary on the entire internet. You all have more sense than everybody in DC put together. It keeps me sane to read these comments. When I watch the news, and see all of the media fawning over the “wise heads” who are ruining our country and spending us into a hellhole, I wonder if I’ve gone crazy. Thanks for helping me realize I am not alone. What a disaster. And I always loved America.
Robot, sorry I haven’t been “programed” to kavetch about the Clintons…it’s something I figured out how to do on my own. This s**t started with Bill Clinton’s aggressive enforcement of the CRA & became exasperated when Phil Graham, during Clinton’s term, repealed The Glass-Steagal Act. That’s how this mess started & yes, GWB gets his share of the blame for knowing about all the abuse & doing nothing & pissin’ away billions in Iraq… We’re so screwed, FUBAR, no solution in sight. If immigration patterns remain the same i.e. millions more poor folks a year to further tax the system, we will sink to 3rd world status in a decade. If the Chinese decide to dump treasuries it’ll happen sooner. Welcome to being “regularized.”
If we divvy up the blame, is it: Clinton 40%, Bush 50%, Obama 10%? Or Clinton 30%, Bush 60%, Obama 10%? Or Clinton 20%, Bush 20%, Obama 60%? Or?
Or is it just plain greed 60% and prevalent stupidity 40%?
I would look at the wealthy people who finance our political parties, here, and abroad.
Didn’t it used to be they couldn’t finance candidates from both parties, they could only give to one?
Wealthy people take 50% of the blame, Bush 30%, Clinton 15%, Obama 5%.
Looking at it in that context, that may be close. However, my question was from a different angle. I’m just wondering how much of our current situation is due to greed and how much is due to stupidity or ignorance.
Follow the people who pushed for deregulation of through Wall Street, beginning with Clinton, maybe even Reagan.
If I were the conspiracy theory type, I would then trace it even further, to see which governments financed the politicians pushing it, and whether or not they had hostile intentions.
People speak of, say, AlQueda, or the ME or Asian oil money being used to finance terrorism, it can also be used to finance economic terrorism, say, via hedge funds, stupid, greedy CEOs, political parties, and politicians.
Look at Chicago –
If I were the Tom Clancy type, I might explore the scenario.
I would think “nah,” but then I look at this financial carnage, and as Eisenhower said “our strength isn’t in our military, it’s our economy…”
Obama is a product of corrupt Wall Street, btw…
Sorry Mary, I like you and all but you’re an intellectual moron like Dr. Savage said. You’re letting your ideology get in the way of your common sense.
Can’t you just disagree with her without the insults?
There’s 300 million Americans, right? Then why not take the little sum of 300 million from the 700 billion and send each citizen a check for 1 million? Wouldn’t that solve alot of problems? Small businesses would flourish, again, people would have money for savings account and retirement nest eggs and everything would be fine. Why not?
Check your math, please.
[...] claiming they need a cash infusion stretches out the door. As I pointed out earlier today (see Mortgaging America), the Federal Government already is on pace to spend more than 50% of the total Gross Domestic [...]
The only reason anyone thinks it’s “impossible” that we’ll ever be able to climb out of this hole is that they’ve all been brainwashed over the past 30 years into believing that taxing rich people destroys the economy. I think the folks who lived through the Eisenhower, Kennedy, Johnson, Nixon era could tell you otherwise. (Note that under Eisenhower, the top marginal rate was 91%. And dude was a Republican, but back then, that actually meant “fiscally responsible” and there was a big war debt to pay off.) These days if you were to raise rates on the Bill Gateses and Warren Buffets to only half that rate, you folks would be jumping up and down and screeching about “socialism” – even though there’s not a chance you’ll ever be in that bracket, and there’s no doubt they are the ones who will benefit most from the bailouts. So it’s real important that we don’t ask them to pay off the lion’s share of it. Because doing otherwise would “destroy the economy” and be “evil socialism”.
Ok, let me get this straight, you would rather that Bill Gates paid taxes at the 91% tax rate and let the Government decide how to spend the money because they have a proven track record of innovation, job creation, satisfying shareholders and positive financial growth?
Had you ever lived in a socialist country? I suggest you live in one for a few years before you try to sell it.
And I don’t mean China, they are no even close to being socialist.
The tax system is structured to cater to the rich and at the same time create a middle class that will have a livable live, not very for the people. The problem with your view is that by taking away from the wealthy and discourage people to work hard, since it don’t pay to work hard or work smart, everyone will live like everyone else-poor. Like I said, if you don’t believe me, live in one of those country for a while.
When the time is right, this country will move a bit more to socialistic society, and this is not the time.
Regarding taxing the rich.
The middle class is the largest slice of income earners and the most heavily taxed. Our total tax burdon can not get any higher. Add up all the federal. state, and local tax fees we pay and then look at our meager expendable (after tax after expense) income, most of which we get tax on via sales tax etc.. We also have a negative savings rate.
Put that new $7.7 trillion dollar debt this bailout is going to cost aside and look at the $10.7 trillion dollar debt we already have. What is that something like 74% of the that %14.4 trillion dollar GDP Larry mentioned?
About $4.7 trillion of that was added by Reagan with trickle down part I. Sraight number right from the CBO. The promised revenue growth fell short of what Reagan budget team promised and we had 3 presidential terms of consecutive budget deficits as a result. It became the “starve the beast” policy. Rack up the debt to squeeze very last cent out of social spending. Reagan got around 85% of the budget cuts he wanted so at best he still would have added $3 trillion even if he had gotten all the cuts.
Clinton and the last sane congress we’ve had repealed Reagan’s cuts on the top 2% income earner and had Pay AS You Go, and the Balanced Budget ammendment. The ND was $5.5 trillion when he took office with a defict economy. It took about a term to reverse the bleeding and by the end of his second term he left office with two consectuvibe nudget surpluses and onl added around a billion to the national debt.
Dubya’s trickle down II have added to date around $5.1 trillion more to the debt.
Consumer spending accounts for some like 2/3 of the economy and consumers are defined as the middle class. It is our labor, our taxes, and our spending that generates the wealth for those above us on the food chain and the son of bitches are bleeding us dry.
We need a progressive tax policy. We need an economic Marshal plan and since you get blood from rock, the very wealthy in this country need to pay more.
I don’t disagree with your view of the rich. I am just having problem with defining someone making 250k as rich and estate tax over 1 million. If you live in city like San Francisco, you are only making a good living.
What I have a problem with is the fact that politician had use the system in place to further their career and benefit their friends in corporations. They can’t be trusted. They had use class warfare to get elected, and once elected will give crumbs to those supporters and take car of the rich(since that’s where all the money is).
You and I both knew that no matter the tax rate, the rich will find way to shelter their money and middle class will be screw. All I had hear so far is politician running their mouth without a solution. Why can they increase tax on people who make over a million a year as a family (anything less would not be rich)? Why can’t they get people to work instead of keeping them down by the use of Affirmative Action? Why can leadership in the minorities help people instead of use people? Why can’t the politician let big corporations fail just like every day people? If you are talking personal responsibility, level the playing field for all.
I don’t care if they are DEM or REP, they are only using ideology for their own political gain, nothing more, nothing less.
I had supported the Clintons, because they know how to balance between the rich and the poor. They had raise tax to balance the budget, that’s something I can support. The problem was the politician. The ignored the balance budget amendment. They can do what ever they want because most American lack critical thinking capacity, which clearly demonstrated in this election.
To tax people and give to those who don’t pay taxes, sorry can’t do. I came from China in their socialist days, and it wasn’t pretty. People live on ration of 30 lb grain, 6 oz of oil, 2 lb of meat and 6 oz of fish each month. You can’t buy more even if you have money, because of shortage of goods(the discouragement of productivity). So, socialism is not the way to go. The top 10% already pays 70% of total tax in this country, and 80% of those top 10% are just upper middle class people like us. You need to define a acceptable threshold for rich, and the politician aren’t about to do it, ask Obama if you don’t believe me.
The all talk and no action liberal are just as bad as the right wing nuts (I am sure that you can tell I am independent by now). Middle class had let the rich and politician use them by participated. They live on credit, don’t save and live from pay check to pay check. How can you demand for anything when the credit card company owned you? Year after year they go to the voting booth and casted their vote, hoping the next politician will be the ONE, can you say Obama supporters? Until people become responsible adults, things aren’t going to change! I hope for more social justice, but it won’t happen until we pay off our debt(national and personal).
Also, I was in the Navy and worked for the Government. Trust me when I say that wasteful spending is everywhere. I am sure that they can cut spending by 20-30% easily if they want to. But they won’t, since they want to maintain their influence in their positions.
You can restating the fact of what a loser Bush is (an undisputed fact), and how bad Regan messed up ( I am in full agreement here. He ran inflation up the roof and drove interest rate up the roof with huge debt, and killed the economy on his spending, no his tax cut policy). It won’t change one bit with Obama.
Bottom line, don’t hold your breath if you are waiting for politicians to do the right thing. If you don’t take care of yourself, no one will.
Regarding taxing the rich.
The middle class is the largest slice of income earners and the most heavily taxed. Our total tax burdon can not get any higher. Add up all the federal. state, and local tax fees we pay and then look at our meager expendable (after tax after expense) income, most of which we get tax on via sales tax etc.. We also have a negative savings rate.
Put that new $7.7 trillion dollar debt this bailout is going to cost aside and look at the $10.7 trillion dollar debt we already have. What is that something like 74% of the that %14.4 trillion dollar GDP Larry mentioned?
About $4.7 trillion of that was added by Reagan with trickle down part I. Sraight number right from the CBO. The promised revenue growth fell short of what Reagan budget team promised and we had 3 presidential terms of consecutive budget deficits as a result. It became the “starve the beast” policy. Rack up the debt to squeeze very last cent out of social spending. Reagan got around 85% of the budget cuts he wanted so at best he still would have added $3 trillion even if he had gotten all the cuts.
Clinton and the last sane congress we’ve had repealed Reagan’s cuts on the top 2% income earner and had Pay AS You Go, and the Balanced Budget ammendment. The ND was $5.5 trillion when he took office with a defict economy. It took about a term to reverse the bleeding and by the end of his second term he left office with two consectuvibe nudget surpluses and onl added around a billion to the national debt.
Dubya’s trickle down II have added to date around $5.1 trillion more to the debt.
Consumer spending accounts for some like 2/3 of the economy and consumers are defined as the middle class. It is our labor, our taxes, and our spending that generates the wealth for those above us on the food chain and the son of bitches are bleeding us dry.
We need a progressive tax policy. We need an economic Marshal plan and since you can’t get blood from rock, the very wealthy in this country need to pay more.
Socialism for the rich, laissez-faire capitalism for everyone else. Redistributing tax burden is not “socialism” in and of itself. We don’t need the obscene wealth by a few we see today as an incentive for an individual to excel. Bill Gates would have been just as motivated with his start-up and Microsoft would be in the same position competitively if he was only worth 10 b today and not 40 b+. Add to that, most of the wealth we’re seeing today is not generated by producing something tangible (as Microsoft) but in creating and milking debt. I don’t want to reward that.
Your option is limited so long as you are relying on the same politician that had been screwing us since day one. Bloody revolt is justify only in case of unspeakable oppression, and without economic cloud, you are reduced to whiners. It’s what both party wanted. Even the rich was happy to provide more tax to keep this system in place.
FDR ran as a candidate of the progressive party at one point. What did he do after elected? keeping the same insanely wealthy people wealthy. What did JFK do after his elected? Not a thing for the Native American and minorities other than lip service.
Everyone have to take care of themselves. Don’t rely on those crooked politicians.
I being milking debt on credit card companies for years. I took their offer of 0% for 12-24 months, and but the money in a money market account to earn interest. I pay them off before the end of the promotion. When they try to jack up my interest, I’ll just call and tell them I’ll send them a check for the whole amount, that turn them around most of the time.
Like I said, you can take advantage of the credit card companies as much as they can do to you. The thing is that you need have your finance in order to do it.
Good and important Topic Larry..
Q. How do we know there really is a Financial/Market crisis that requires our Government to buy all this Bad debt and give these financial Institutions all this money without regulations ..??
Q.. Why has the Crisi affected so many Institutions and Areas of Our Economy all at Once..??
Q. What has the financial crisi gone Global..They say Europe is worse off than the United States..??
What does all this have to do with Sub Prime Loans..??
Q> Is it a Coincidence..?? How can The Bush administration and Hank Paulson just give away Trillions of Dollars…Buy Trillion of Dollars of Bad debt..adding to the Debt of the Bush Administration POGROM..There was chaos when G.W. Bush became President…he created MORE Chaos…and Now…by Coincidence..he is leaving the united states in More chaos..adding to The Massive debt the Bsh administration created..
HE was in Charge of this Government and This economy…His administration Has been Nothing but a DISASTER..Start to Finish..
and Obama is being Set Up as the MESSIAH…so he can spend Trillions More ..Creating HOPE…Helping America through the Depression..and No One in government cares what You..I or Lou Dobbs says..
This is Controlled Chaos…
What got us into this mess is greed. Nobody twisted anyone’s arm to buy these mortgage securities sight unseen along with unregulated credit swaps derivatives.
The current economic thinking as I understand it was that the New Deal under FDR was too late and too small. By the time FDR took the oath of office unemployment was at 28 percent. Doing nothing and letting “the markets fix it” will result in the same Depression Era scenario. Twenty plus percent of unemployment is a huge burden on the government and would swallow us anyway as we wait for the “markets to fix it”. Ohio’s unemployment fund will soon be out of money and we haven’t even started the auto lay offs or the 9k plus DHL layoffs.
I really don’t know the answer here, but I know that doing nothing will be a disaster.
As an American manufacturer that drives an American car, I’m just appalled at the race to National Suicide.
I know some could care less about what happens to the car companies and some of you have been driving foreign cars for years being oblivious to the long term ramifications
Now those ramifications are here!!!
The car companies like others I manufacture for are suffering the same collapse of demand and are not responsible for their situation. Are we to blame every business now that is in debt regardless of the economic model.
My suggestion would be to invest heavily in the auto companies as this is a National Security issue. The automobile is the reason for the problems facing the planet and needs to be the solution.
Relax everyone. As my bankerette said a few months ago:
“Don’t worry. They’ll just print the money.”
Looks to me like more deflation for awhile, than a pretty quick turnaround to inflation, perhaps REALLY BAD inflation. Time to spend less and pay down debt (that means you too, Washington). And buy gold.
yeah, outsource jobs & then tax the hell out of us to create new ones, this is b.s.
taxes are not a zero sum game…. taxes pay to support you and the country.
if taxes go up you can though Bush for the huge deficit he ran up and the huge deficit he is about to run up because of this economic tsunami.
Lets cut spending and lets start with these wars and the military.
http://bigpicture.typepad.com/comments/
Barry Ritholtz sez,
In doing the research for the “Bailout Nation” book, I needed a way to put the dollar amounts into proper historical perspective.
If we add in the Citi bailout, the total cost now exceeds $4.6165 trillion dollars.
People have a hard time conceptualizing very large numbers, so let’s give this some context. The current Credit Crisis bailout is now the largest outlay In American history.
Crunching the inflation adjusted numbers, we find the bailout has cost more than all of these big budget government expenditures – combined:
• Marshall Plan: Cost: $12.7 billion, Inflation Adjusted Cost: $115.3 billion
• Louisiana Purchase: Cost: $15 million, Inflation Adjusted Cost: $217 billion
• Race to the Moon: Cost: $36.4 billion, Inflation Adjusted Cost: $237 billion
• S&L Crisis: Cost: $153 billion, Inflation Adjusted Cost: $256 billion
• Korean War: Cost: $54 billion, Inflation Adjusted Cost: $454 billion
• The New Deal: Cost: $32 billion (Est), Inflation Adjusted Cost: $500 billion (Est)
• Invasion of Iraq: Cost: $551b, Inflation Adjusted Cost: $597 billion
• Vietnam War: Cost: $111 billion, Inflation Adjusted Cost: $698 billion
• NASA: Cost: $416.7 billion, Inflation Adjusted Cost: $851.2 billion
TOTAL: $3.92 trillion