Why It’s Worse Than You Think

One solution I can offer Joe Q Public in paying his mortgage, monthly bill and the day to day expenses
such as food and gas.....Everyone pays all debt every other month for 24 months. This is done by odd and even social security number on the main creditor. The would fee up a lot of cash for operating day to day expense and relieve the stress and give all concern a breather and time to solve the Financial Crunch and The Oil Crises, Although may seem way off base in the long run the Feds would not have to keep lowering the interest rates. There would be less foreclosure and stop the financial bleeding. I have lived thru all the the chills and fever of our economy from the start in 1973 to the present. The public has a way of correcting itself, we just dont need another Recession like we had in the 80's where the banks and saviings & loans go belly up with a glut of foreclosures just sitting and draining all concern. Paying bills 6 times a year is fast, and will have a positive effect on those who are living right now paycheck to paycheck that is now evaporating before they can get it deposited into their accounts. I like to hear people response to this idea
and takers?

Since the House and Senate made sure no new energy supplies in America will be available to drive down energy costs and gas lines are less then 2years away I don???t see any chance of recovery in the short term. Go Dems.

I'm bullish on America

Actually, our 3% inflation could be in the ballpark with the 13% in the stagflationary '70s.
Twice since then, the U.S. Government has revised the method it uses to calculate
inflation. Each time, the resulting measure was roughly halved.

Actually, our 3% inflation could be comparable to the 13% in the stagflationary 70's.
Twice since then the U.S. Government has revised the method by which it calculates
inflation, each time the result more or less halved the measure.

If China and India are picking up the load that the U.S. has dropped, in terms of keeping the global economy chugging along, what happens to inflationary pressures once the U.S. economy emerges from its doldrums? It seems like a formula for hyperinflation and tight credit to boot on the part of the Fed.

The writer of the article needs to get his fact correct regarding who the CEO of Wachovia actually is (or was). Gross is grossly incorrect on this point. Gross writes "...The latest victim: Wachovia CEO G. Thompson Kennedy..." WRONG! The CEO of Wachovia was Ken Thompson not G. Thompson Kennedy.

Newsweek has a special talent for full-on negativity. If there was even a hope of positive results Newseek would not be able to find the words to express it. Is this politically driven?

The biggest threat to the economy right now, is credit cards. People use them like money that comes from nowhere and don't worry about repayment. College kids are given cards BEFORE they graduate, and get jobs, and have college loans to pay. The US govenment is living on credit, also. The Bush administration has borrowed and spent its way into a recession. People can't seem to live without thier "toys". iphones, HD TV's, constant connection to the internet, etc. Unfortunately, this is a trend that will take decades to stop, let alone, reverse, Living within your means is "old fashioned" and "out of date". The bill is coming due sooner than you think. I think another "Depression" is the wake up call for those who think they will be young and rich.

Yah well I'm sure we can all say "What were they thinking?" about the lenders in the home mortgage industry. It's kinda scary when you think all the people who were getting approved for huge loans, without showing much of an ability to pay the money back. Especially those adjustable rate loans. I live in Southern California and houses in the ghetto were going for 500 g's. It seems like anybody and everybody were getting loans, and it was the fault of the people in the industry getting 6% of a 500, 000 dollar house, (over 25 grand) these people ruined the economy and deserve to be punished for it. They purposely drove up the market, gave loans to people that we all knew couldnt afford them, and now have started to put the economy in a melt down

Newsweek has been promoting a " Bad Economy " for years now. Sooner or later, they might get it right, especially when the economic cycle goes in that direction.

The interesting question is, " Why " does Newsweek keep pumping these articles out? Have they got more than just an objective interest in the upcoming election?

Heismann certainly is a bearer of bad news. Wishing us all the best. Wow. What type of car does he drive? How big is his house? Does he buy carbon credits? Seriously, if its that bad in America, why bother. Let's just hit the lifeboats. r/ Bedrock Guy

Regardless of whether or not Mr. Gross is correct in his statements, we should take a look at his background given that this is an election year. So, how does he vote in terms of party? What is his association with people like Soros? What does a record of his past articles on the economy indicate, particularly in election years. I'm not saying he is wrong in this article - I just want a full review of his previous columns and a review of his associations with various political and economic types. r/ Bedrock Guy

This is an outstanding article that should be mandatory reading for all families. Mr. Gross nicely covers the impact of dramatically increasing food, fuel and commodities costs and the restrictions on credit. But the situation is far worse than even Mr. Gross presents.
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One of the underlying reasons for this is that the Fed has been manipulating the economic numbers for years -- a fact widely known but rarely discussed. For those interested, this was finally and nicely detailed by Harper's last month in an article by Kevin Phillips, a former Republican strategist who pulls no punches in his expose.
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The credit crunch and declining home prices are creating real problems for consumers. But if you think that's bad consider this. We've been told that the economy was pretty good since 2003. It wasn't. We were handed a numbers game.
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The reckless lending that Mr. Gross speaks of created a shadow economy, one driven not by production, productivity and salary increases, but by money extracted from wildly inflated home prices. If we subtract the percentage of our gross domestic product (GDP) that came from the cash we took our of our homes, the officially reported 3 to 4 percent point GDP growth since 2003 was, in reality, a pitiful one half to one percent. That's right, we've been in a mild recession for the past 5 years masked by credit cards and home equity cash outs. Now that all of this is gone, there's little left to save the economy.
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Mr. Gross mentions the prime foreclosures in California, but these are rapidly spreading across the nation, as late payments among prime borrowers are increasing faster than subprime. Given the huge number of prime mortgages, this one statistic is terrifying. For many, if you run into hard times, you can't sell and you can't refinance.
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Finally there's 5 dollar gasoline, and heating oil pain this coming winter. Global demand is high and it will just go higher. There's enough oil, it just can't be pulled out of the ground or refined fast enough. New Saudi refineries are 5 years away from coming on line. Expect more pain.
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We may pull through, but the odds are long. I wish all of us the best.

Jack Heismann

And we are drinking way too much gasoline, too.

Right with you, sperkgs, except the part about being Republican, not my party, no criticism implied. And I share your question, "What will we do?" Do we patch the tires or buy a new set? Hard to know, but I don't rule out that a Democrat might get us set back up in a decent economy. Time is our educator on this.

I couldn't believe it when I learned that people were borrowing money against their homes as the price rose on the real estate, and then using the money as added income. Then, one day Greenspan, when he was the Fed honcho, tried to reassure us that things were still good in our consumer driven economy because "there is a lot of homeowner's equity still out there". Then, he lowered the rates to make it easier for people to buy into homes and continue this grasshopper philosophy. I smelled doom in the air and hoped that I was wrong. Now, it looms. This reeks of the early days of the big depression when dollars sought refuge in gold, helping the economy shrink. The only remedy was finally for Roosevelt to make it illegal to own gold. Will we now have to make it illegal to buy oil and grain futures, so that we can still eat and drive our Humvees? We continue to use the recipes for economic failure. Come on new candidates. Do something.

Obma