Why It’s Worse Than You Think

This is How to Fix the Economy plain and simple:

1. Re-Establish Regulation on Financial Institutions.
2. Place Restrictions on their executive management.
3. Raise the amount of FDIC Insurance retirement funds.
4. Force Banks to Pay us back First with Interest.
5. Fix the Taxation System.

The way I look at it, raising the FDIC amount helps give people (who make investment decisions based on emotions) a feeling of security. A good deal of the middle class around 50 years old have retirement accounts that are 250k or more.

see http://howtofixtheeconomy.blogspot.com/

In 2005, for the first time in history, a serious Fannie and Freddie reform bill, S. 190, was passed by the Senate Banking Committee. The bill gave a regulator power to crack down, and would have required the companies to eliminate their investments in risky assets. If that bill had become law, then the world today would be different. But the bill didn't become law, for a simple reason: Democrats opposed it on a party-line vote in the committee, signaling that this would be a partisan issue. Republicans, tied in knots by the tight Democratic opposition, couldn't even get the Senate to vote on the matter.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aSKSoiNbnQY0



In support of S 190, also known as the Federal Housing Enterprise Regulatory Reform Act of 2005, John McCain said: "For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac--known as Government-sponsored entities or GSEs--and the sheer magnitude of these companies and the role they play in the housing market. OFHEO's report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO's report solidifies my view that the GSEs need to be reformed without delay."

http://www.govtrack.us/congress/record.xpd?id=109-s20060525-16

Federal Housing Enterprise Regulatory Reform Act of 2005 would have Amended the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 to establish: (1) in lieu of the Office of Federal Housing Enterprise Oversight of the Department of Housing and Urban Development (HUD), an independent Federal Housing Enterprise Regulatory Agency which shall have authority over the Federal Home Loan Bank Finance Corporation, the Federal Home Loan Banks, the Federal National Mortgage Association (Fannie Mae), and the Federal Home Loan Mortgage Corporation (Freddie Mac); and (2) the Federal Housing Enterprise Board.
Most importantly with regard to the CDS situation, S. 190 set forth operating, administrative, and regulatory provisions respecting: (1) assessment authority; (2) authority to limit nonmission-related assets; (3) minimum and critical capital levels; (4) risk-based capital test; (5) capital classifications and undercapitalized enterprises; (6) enforcement actions and penalties; (7) golden parachutes; and (8) reporting. Adoption of these regulatory provisions would have undoubtably affected the way CDSs were dealt with in "private" enterprises.
The bill would have also amended the Federal Home Loan Bank Act to establish the Federal Home Loan Bank Finance Corporation., and transfered the functions of the Office of Finance of the Federal Home Loan Banks to such Corporation. If this had been in place three years ago, this whole situation might have been averted.

http://www.govtrack.us/congress/bill.xpd?bill=s109-190&tab=summary

These "agencies have brought staffers out of retirement." That really burns me. I went back to school after my disabled child reached an age and caregiving level where I could get a higher education. I am a single mother certified to teach in three areas with a Master's Degree. I live in Florida and cannot get a job. I have to live close to a major medical facility because of my daughter's diagnoses. I am in debt thousands and thousands of dollars of student loans, that I have every intention of repaying...if I can get a job! We are barely making ends meet. 1500 teachers in Miami-Dade County have lost their jobs....many close to retirement. And these jobs are not being replaced. I don't know a lot about Wall Street, but on my street things are looking rather dismal. Where are our priorities? Thanks for letting me blow off some steam....

In a few weeks we will make a choice that will decide our future.
I follow an economist named Bob Proctor. He has called the top and bottom of every market crash since the 70s correctly.
Also, he perfectly predicted the current real estate market meltdown and the picture he paints about what will happen in the next couple years
is terrifying.He thinks it will be worse then the great depression.
The banks in the U.S. are going under one after the other. Countrywide the largest morgage bank in the world,Bear Stearns, Lehman Brothers and Merrill Lynch which are 3 out of the top 5 wall street firms. Also, Fanny and Freddy Mae which hold 50 percent of the home loans in the United States.
The government took them over because they are essentially bankrupt.If they didn't the entire financially system would virtually shut down, the stock market would crash and we would suffer beyond what any of us have seen before.

McCain just like Bush " doesn't understand the economy".
That not just my opinion its his own words. Not only does he not understand how to fix it but he does not understand exactly what is broken.
It is no surprise that he doesn't. The people that make up these securities use complex mathematical models very few people understand.
Bush and McCain both can take the credit for this mess since they helped deregulate the laws that were protecting us.

Bush's economic advisor Phil Graham wrote the deregulation bill that allowed banks to take huge risks with all of our future.
Now, Phil Graham is the head of McCain's economic policy.He is also McCain's choice for the next secretary of the treasury.
No one in this country can afford for that to happen. The last time Bush met with his economic advisors was in March. He either didn't care or didn't realize that anything was wrong. Phil Graham had the guts to say that we are in a mental recession after he helped create the worst economy meltdown in our lifetime.
It will take the best and brightest minds in the world to get us out of this nightmare. As bad as Bush has done, McCain would be
even more destructive because things are in much worse shape. The next president will not inherit a surplus like Bush did but a tanking economy and a 11,600,000,000,000 (trillion) dollars deficit. Most of it Bush created and it will take decades to pay it back.
If you do what you have always done then you will get what you have always got.
When it comes to policy Bush and McCain are the same 90 percent of the time.
So why are the polls even close then ?


The chairman of McCains campaign recently said that people don't vote on issues they vote on a personality composite. Which means he is trying to sell you personality instead of results.

He believes people will vote against their own interests.

Let's teach him we are smarter than that .

Hold them accountable NOW! while it will still help.

Elect Obama Biden 2008

I don't think the whole economy is going to implode. Awful...........without a doubt.
Appocalyptic....probably not.

Time to reinstate regulations and controls for the essentials like energy, healthcare, financial markets and other industries that cannot be trusted to pure, human greed as evidenced by recent events.

Make CEO pay even remotely comprehensible to the Avg. worker's, reign in bonuses for CEO's taking risks a crack head wouldn't take and restore some faith in America.

The degredation has gone on long enough, now. The Repubs have already shown what they can do. Anyone impressed?

Our debts levels has exceeded tolerable limits. More money must be printed. There is no way to finance Mr. Paulson's proposal by selling bonds because they are worthless(TOXIC). Why would foreignors by our (TOXIC) assets? The only resolution is $200 bill w/ Big Ben' s face.

Looking forward, the rescue package appears doom to fail because households are fully leveraged.
But unlike the government, households cannot print money. Our economy has become so liberalized that people cannot demand higher wages to meet inflation.

In addition, the real estate scandal has effectively wiped the upper middle class. This, along with the inability to demand higher wages, will ultimately trickle down to the majority in the middle class. As this happens the governmen't debt burden will increase even more due to lower income tax revenues.

Sooner or later, the middle class will begin liquidating assets in order to meet living expenses and financial obligations. You know the rest. Zimbabwe here we come.

When this recession is over will this be another jobless recovery? In the 2001 recession, companies used the opportunity to outsource and offshore everything. While GDP picked up, jobs did not which is why it was called a jobless recovery. There is no reason to think that this recovery will be any different. The high priced consulting firms are still telling corporate America to outsource and offshore everything. We may look back at the current state of the job market as the golden years. In the future it would not surprise me if unemployment exceeded 10% and one third of the workforce was forced into part-time or contractor status. Then even the upper middle class will complain about being hollowed out.

The cycle of depression has always impacted the human race. We learn nothing from history. Good luck to those who face impoverishment. It sucks from the bottom up. For all it's brilliance goes along with the height of folly. Just because a new label is placed on the Office Door does not mean any real change takes place. Tighten your belt because it is going to get much worse.

With a Weak Economy, We Need Smarter Policies

The old tricks aren???t working any more. The government???s tools for a weak economy have been to lower interest rates, borrow and spend, or have a war. Now, interest rates are so low that you can???t earn enough on your savings to keep up with inflation, the government owes $31,666 for every man, woman and child in America, and we have two of the longest running wars in U.S. history. We need something new, something smarter.

Let???s stop collecting taxes in ways that hurt us. We need two simple changes to our existing system.

Start with capital gains. Right now, people who earn more money in a year than you could dream of making in your lifetime pay only a 15% tax on most of that income, which is less than the Social Security and Medicare taxes that any middle class wage earner pays on their income. With patience and good planning, they pay no tax at all on their gains. Why do we have such a strange system? Economists will cite two reasons.

First, if we tax these earnings from wealth as heavily as we tax earnings from work, then the wealthy will tend to spend more of their money instead of investing it. But the government just went deeper into debt sending out billions of dollars in checks to try to get people to spend money. So why are we bribing the wealthy to NOT spend money?

Second, because people can avoid having taxable gains by simply not selling their stock, having a normal tax rate on gains will tend to keep dollars from flowing to the best investments, which is bad for the economy. But what if instead we got corporations to pay out all of their earnings as dividends and then have to ask people to reinvest the cash? That would be a much more effective way to make money flow where it should.

Now consider corporate tax. Under our system, if a U.S. corporation earns $1.00 in Switzerland and keeps the cash out of the U.S., it keeps $1.00. If it earns the same $1.00 in the U.S., it must give $0.35 to the tax man. So where do you suppose companies will put their most valuable activities? That kind of incentive is what has been killing U.S. jobs and keeping down U.S. wages. There is less demand for U.S. workers because this is a bad place to invest, so employees can???t demand as much pay.

What is the simple solution? Give corporations a deduction for paying dividends, and make up the lost tax revenue by getting rid of the capital gain benefits on the individual side and raising taxes a bit on people earning over $500,000 a year. On average, the over $500,000 group would still pay total federal and state income tax of only 37.6%. Cash would flow and jobs would grow. Wouldn???t that be smarter?

We are seeing the death of the old economy and waking up to the new economy as written in the book "$500 Startup" (you can only find it on the book's website www.500DollarStartup.com). Much to the dismay and disbelief of farmers when we had a changing of hands when we went from an agrarian society to an industrial society, there is pain with change. We are now going from an industrial society to a global society. Power, money and jobs are no longer held as a strong hold in America but now everywhere. That said we can not be surprised that other countries are enjoying prosperity when we are sending our dollars out of the country and not spending them here. Even our dependence on foreign oil is ridiculous. We are at the mercy of our oil lords. Americans need to have American made energy that doesn't pollute. The problem with our current solar, wind, thermal, biofuel is that we are still slaves to corporations and its expensive or it won't come on line for years to provide the energy we need. An immediate solution is biomass gasifiers that every person could have at home providing all the electricity they need to power their home, job site or car. I found out that with recycled parts and "trash" like coffee grinds, yard waste, corn husks, grass, wood scraps etc.... and a weekend you can have clean energy. I found out how iat the gasification social network at www.VictoryGasworks.com

Seventy five years of FDR socialistic money policies have caught up with our spend your way into wealth.system. There is no backing for the dollar. No GNP can be shown as there is no wealth in the U.S.A.
All our resources have been squandered to the rest of the world. Carter gave the Panama Canal away, Johnston robbed the S.S. trust fund after FDR made the dollar worth 59 cents. Name 1 right thing the demos have done to help the United States of America

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Stop hiring Americans, LAYOFF Americans, Offshore all the jobs, and sell your products to countries you have offshored to. Move your corporate headquarters offshore, and leave us alone. We are ready to start over without you. Shame on HR and CIO's in the U.S. I think it's time for you to leave this country, or retire with all the greasy cash you've gotten. We really don't want you here. We are not as asleep as you think we are.

Good.......American's need to taught a lesson in ecomonics. But then again, the US Congress will probably bail you out for your stupidity. What's next......rewarding murders for thinning out the population?

What I want to know is just what these "economists" are smoking,
This economy is in for a long long decline and will not recover anytime soon.
We are a cunsumer driven economy, the one thing the trickle down economics has ignored and to a large extent destroyed is the middle class IE: the consumers.
You cannot send the jobs overseas and tell an unemployed steelworker if he wants to stay in the middle class go back to school and get a law degree.
This war against the middle class driven by greed has been going on for some 40 years with the effort to kill the one thing that raised skilled labor to the middle class the labor unions, all only a shadow of what they once were.
Housing construction is now done largely by illegals or what remains of the housing industry.
Bush, Gramm, Fiorina all tell us the economy is great, and I'm sure it is in thier small circle of friends but for the rest of America it's not so great. Except Houston of course where the economy is better than great.
We see smaller municipalities suffering because of the dependance on sales tax, which of course is dependant on consumers,
This economy has a long way to fall yet due to the incredible shortsighted economic policies initiated by Reagan and now shoved down our throuts by Bush.
When we get a bottom up economy restarted as has been suggested by OBama the economy in due course will recover but not before.