The Myths Of The Recession

May I mention another myth of the recession ... that some banks are too big to fail:

http://blogdredd.blogspot.com/2009/04/too-big-to-flail.html

I survived the mortgage crunch. But what is hurting me most is the banks' knee-jerk reaction to it: jacking up interest rates on all credit cards, even those with a zero balance, to nearly 30%. Then my daughter lost her job so I'm covering her car payment (my mistake: I shouldn't have co-signed, even after she assured me she could cover the payments - if I could afford a car payment I'd already be making one, to replace MY car!), and my 17-yr old car needed two big repairs in successive months. I went from doing ok, although wary, to just barely hanging on. I'm thinking of either a mom-financed bailout or letting my daughter's car be repossessed. I'm even beginning to wonder about that evil "b" word I'd swore I'd never even consider, "Bankruptcy." There's just nothing else to cut, and nothing I can sell.

you make a statement and accuse but do not yourself back it up with facts and sources. when in fact the previous post is in the ballpark.
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Jameswilly
http://www.substanceabusecenter.com/

Your fact is not true. you grossly overstate the portion upper income people pay. was your mistake intentional.
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James
<a href=" http://www.substanceabusecenter.com"> Substance Abuse Center</a>

Get ready folks the next leg of the three legged stool will be kicked out. This time thing will really hit the floor, unemployment will climb rapidly to over 11%, markets will tank and retirement accounts will be wiped out. Then things will evel but not climb back all that TARP and stimulis payments we spent have to be repaid to all the bond holders, like Red China. Have fun..........

Ai yi yi-- another article from one of the genius economists who Labor Day thought the U.S. economy was a super engine and sky rocketing energy prices were a monor fly in the ointment we could easily absorb...

What bugs me most is this guy glazes over some very sobering facts and flat mistates others.

1) The U.S. dollar didn't start falling in 2008; it was in fact in unfettered freefall against the Euro, the Pound and the Yen for five noticable years. Despite what the majority of talking heads had to say about this at the time, along the lines of 'international travel is more expensive, but other than that, what's the problem?', most obviously the trade deficeit ran up even higher and the massive amounts of money we borrow from overseas swelled as the dollar fell.

2)"Debt", credit, corporate or governmental is a huge looming issue as there's far more of these kinds than all the mortgages put together. 2007 was the first year in history that Americans on the average spent more than they earned. Add to that the quantity of borrowed money necessary for the Federal gavernment alone to operate, you get the picture-- we are in fact a debtor nation.

3)Yes, gold is under $1000/oz. again, back to around $900, but three years ago it was trading for under $600/oz. Our currency hasn't been tied to "the gold standard" for decades so swings in the value of a dollar and the price of precious metals aren't directly correlated. However, the value of dollars and crude oil prices are.

4) In Sept., a run on money market accounts brought our banking system and therefore our economy within four hours of insolvency and collapse, and brought the global economy within 24 hours of failure. "Decoupling" always was a myth.

5) "Taxes", income and all the rest, aren't fun but they're a necessity. Be prepared to lose the individual tax cuts of the last 20 years; it's a necessity.

6) "Taxes" isn't a fun word and we've come to think of "oversight" and "regulation" as nasty terms, too. But as one of these geniuses ventured, "Maybe our bubbles shouldn't be allowed to expand so rapidly or so far so that the lows don't go quite so far down," which of course reqires regulation by governments. As far as the need for more oversight, well, everyone here can read.

SAVE THE TAXPAYER
1) Reduce permanently 10% of the federal and state work force - those left need work harder like most workers still working are forced to do,

2) Make all government employees INCLUDING senators, house of reps & the President /VP give up earning any more pension benefits (like most americans no longer have), INSTEAD give them a match of 50% on up 6% of their annual wage they contribute into a 403B plan - USE the TAX savings resulting from the dropping of new pension TO PROPERLY FUND SOCIAL SECURITY FOR THE TAXPES SINCE THATS 10 year from going BROKE

3) Have the FEDERAL government stop paying 80% for federal employee families health premium - drop it to 50%,

4) Increase the FEDERAL employee health insurance deductible to $1000 like most private employers now have,

5) make all senators and house of representatives serve NO MORE than 2 term limits - ends the power of long term senators, etc to force senators, etc to approve EARMARKS on bills alreday released from committee

6) Go to a flat tax Federal tax program so the IRS audits can stop (laying off 50% of that organizations tax payer supported staff)

7) after 1st child's birth to a single mom STOP paying for single mom's child birth , offer free sterilization - more than 1/2 the baby's being born in the US now being paid for by the government (TAXPAYERS in other words) and don't give these single mom's, who are abusing the free childbirth /single mom welfare system by having child after child out of wedlock, money to support more than 1 child

8) NO Social Security, Medicaid or Medicare benefits to ANYONE NOT A US CITIZEN even if their "citizen" child brings them into the US - as are all being done now for NON Citizens!

9) Give the President Line Item Veto rights

10) Give life in prison to ANY politician find guilty of any abuse of power or corruption while in office

11) OUR prisons - lower the taxes to care for the Prisoners - no more coffee or juice, let them drink water at ALL MEALS, feed them oatmeal/toast for breakfast, peanut butter/jelly sandwiches with crackers for lunch and inexpensive stew (easy to make and serve requiring less kitchen labor) And for medicines make them pay the FULL COST of medicine - why reduce their costs out of taxpayers pockets ? I didn't unjustly put them in prison THEY BROKE the law - suffer the CONSEQUENCES


STOP THE MADNESS


P.S. Anyone running on the above platform will WIN any FUTURE elections, so Go for IT you TRUE AMERICANS!

How about the coming onslaught from energy taxes? An estimated 800 BILLION in new taxes for 2010. That will hurt the working class and send millions of jobs overseas. We can't do this without further massive damage to the economy.

A few years back, thousands of people got their doctorates in Latin. They are now asleep. Looking at the FED???s for the past years, it is time for the MacroEconomists to go to sleep.

It is true that crisis revealed flaws, taught us accurately many very important lessons, make us more vigorous. But reaching to that point where we are be able to collect fruits of crisis it takes long long time, hardships.There are challenges: how the world is facing unemployment, poverty, hunger, health care and more important their breed terrorism? the result does not seem satisfied.

Could have agreed with you on everything but the "Buy American" argument. Every country does this and to say we should be sheep and continue sending our money ($800 Billion trade deficit) out of our country where it does ZERO for our economy is a good thing is stupid. If they weren't there would be Chevys and Fords all over Japan and Korea and Maytag refrigerators all over Europe, which there's not. I get tired of everyone bending us over and sticking it to us and we're supposed to take it and smile.

We shouldn't have allowed banks to get so big in the first place. As I have quoted from another person on USAToday "To big to fail means too big to exist, PERIOD!" We should have been encouraging a lot of SMALL banks in this country, not a bunch of super-large, super-banks.
Bubblehead.... the top 10% do NOT pay 90% of the taxes. Cut that lie out right now, they pay about 15% of the taxes, not 90%.

Obama had created his own controversy by warning the American public and pressuring Congress that an economic catastrophe would occur if the stimulus package was delayed ??? then taking off the President Day's weekend to fly to Chicago with his family and dining with his wife at a trendy restaurant.
The process that generated the legislation reflected Washington at its worst, with the dominant Democrats pushing through a package that received limited public airing and virtually no Republican support.
The American Recovery and Reinvestment Act will not create or save the 4 million jobs Obama has repeatedly promised, and if so how do you measure success? The cures being offered by the government should have only limited positive impact on the economy, but they do offer the promise of much higher inflation.
The current crisis has developed and evolved during the last four decades, as trade and economic policies ??? counter to the interests of much of the U.S. citizenry ??? have resulted in the significant loss of high paying domestic production or technical jobs, where production operations have been lost to offshore competition, or simply moved offshore.
The U.S. Treasury is preparing to borrow up to $2.5 trillion in 2009 to cover the anticipated 2009 federal budget deficit, followed by borrowing another $4 trillion in 2010, with the prospect of increasing the current $10 trillion U.S. national debt by 65 percent in the first two years of the Obama administration.
According to the 2008 Financial Report of the United States Government put out by the CBO the true current obligations of the federal government, as determined by the U.S. Treasury using GAAP, or Generally Accepted Accounting Practice, rules, totaled $65.5 trillion in 2008, exceeding the gross domestic product of the world.
The magnitude of deficit spending required by the American Recovery and Reinvestment Act of 2009 will create hyper-inflation in the United States no later than 2014.
Hyperinflation occurs when currency devaluation dramatically reduces purchasing power.