I'll have a lot less time to spend writing and goofing around at hatrack when the economy catches up to me and I have to get in line for government work projects. Can't wait to move stones from one side of the road to the other and back again... better grab my orange vest.
But the key word is retirement. I won't be able to cash in for some time, and the losses of the past few weeks will be made good by then. Keep in mind that the economy is cyclical, and that bad times are followed by good times---and that if you sell now, at a loss, you'll lose money, but if you hang on, you won't.
(And my mortgage is paid up---as are ninety-four percent of the mortgages in the USA. There's more depth to the economy than Wall Street would indicate.)
But you're right, I over reacted.
There is an easy reason that everyone ignores. Without it, a 700,000,000,000 dollar buy out wouldn't have been painfull at all to our economy. Actually, the problem probably wouldn't have happened at all.
A 10 Trillion dollar debt
I don't know what that annually interset rate is on government bonds, but a meger 5% equals 500 billion. That's 500 billion that right out of our taxpayer pockets and into the trashcan.
Every politician (with the possible exception of Ron Paul who votes against everything) that has been in office since the second world war, is responcible for that outrageous number. We have borrowed the equilivant of a million dollars for a 100 grand home. We need to balance every budget from here on out and start paying down the princible on that debt. That means some really ugly things need to be done, like cutting Social Security and Medicare.
Lets face it, regardsless how you feel about the occupation (the war ended years ago) of Iraq, we need to withdraw because we can't afford it!.
The retirement age needs to be raised to 66 now and 67 three years from now because we can't afford it!
All future projects must be put on hold because we can't afford it!
Every item of the budget needs to frozen at the current level, at a minimum because we can't afford it!
Screw the Republicans, screw the Democrats. Protest them both and vote Libertarian, the only ones the are committed to addressing this credit card mentallity on government spending.
And thanks for the rotten tomatoes, they help the complexion.
I hope more people are held accountable now that the spending didn't go through
Good luck Americans!
.
Seriously, this economy is scary. I very nearly got laid off. Well, my job is still tenuous at best. My bank (WaMu) got bought up, and we're paying hand over fist for health insurance. I haven't checked my retirement savings. To say they will recover in a few weeks is a bit... optimistic, in my opinion. Several years, maybe. Luckily, I don't have to retire in a good long time.
Meanwhile, my house needs a new roof, my garbage disposer is backed up, and I have some serious structural issues... ack!
So, Zero, maybe I'll see you in line at the New New Deal projects!
My husband just got approved for the 13 week unemployment extention. Once that runs out, we will be paying what my paycheck won't cover with funds that were earmarked to help with our retirement. I don't know what will happen if he doesn't get a job before our money runs out. We have enough to live off of for at least through next year. Surely, something will break before then and we won't be looking at bankruptcy. We still have 5 years to go to pay off our home.
So, yes, what's going on in the American economy is scaring me to death. It's terrible when you have no idea what the future may hold.
quote:
I don't know what that annually interset rate is on government bonds, but a meger 5% equals 500 billion. That's 500 billion that right out of our taxpayer pockets and into the trashcan.
So yeah the debt is a bad thing, but it's also seemingly impossible to quantify.
I wanted the bail-out because it is a push for some fiscal policy. In my opinion we're in a liquidity trap, and the way out of it is to kickstart the economy with government expenditure, kinda like the 30's. Bailing-out out these businesses would also unlock some credit and help bolster investor confidence around the world.
Or would have, rather.
I was always for huge oversight and pay limits for the executives. They need to take whatever we let them have with deepest gratitude.
But for reasons purely unrelated to the fates of the bankers as people, I wanted the bailout to help us help ourselves.
But, of course, it didn't happen.
As for voting Libertarian I'm not going to. Government expenditure and government debt aren't necessarily bad things, but are always misunderstood and misrepresented by the media.
I don't like congressman Paul because I think he's like Bush in one very specific way. He's willing to charge into something with his eyes closed. Bush doesn't think about the consequences of his actions, he just acts--according to his principles, and everything else can go to hell, right?
Paul's attitude is the same way. If it's not in the constitution it's gone! Regarless of how many millions of people would be in the streets over night, to hell with social services (even the effective ones), and the military, and the FBI, etc.
Drastic and abrupt changes, made thoughtlessly, in ignorance, tend to be bad. They leave us in Iraq or with no middle class.
Also, if there is any one thing this crisis has taught us, it's that the free market cannot be trusted without regulation.
Regulation could have easily prevented the bad loans that began all this mess.
Oh well. At least the media's jobs are secure.
[This message has been edited by Zero (edited September 30, 2008).]
Does Zero represent Zero growth? The Free Market is the solution to this problem. Its because of the governments desire to spend without caring about the consquences is the reason why we are in this mess. The reason why we don't have any credit is because the government has borrowed so much money that there is not enough left to invest in worth while assests.
Banks and investors wanted some better than a 3 - 4 percent return on their investment. APR/ sub-prime mortgages seemed like a good idea becasue the value of property was rising so much it appeared to be a can't miss propersition. After all, so what if a home buyer can't pay the exceedingly high balloon payment they weren't aware was coming in year two. The bank will get the house and sell it for a higher price because prperty values were rising faster than inflation and any other investment prospect.
Well, well, much like the stock market crisis, they were way over valued and the poor slobs that were suckered with an attractive monthly payment (funny how mortgage brokers neglected to tell them how large the payment is after the prime rate gets adjusted) couldn't make them anymore. Now, like those stocks of the 30's, they're not worth what they backed. Property values fell and investors lost in this risky venture, which is what this was a risky venture.
The bailout helps only the fatcats a**holes that couldn't help looking a gift horse in the mouth. They didn't have a problem kicking overwhelmed home owners out in the street when they couldn't make a payment that was doubled what they thought they were paying. All this 700 billion dollars will do is allow any lender that owns a undervalued piece of property to dump it on the government and walk away with their hands clean. Their not going to hand over anything of really value, just the stuff thats worthless!. This bailout would have been the equivilant of FDR's government buying all that worthless stock and telling the American people that 'they could make money on this deal' (he didn't do that, to his credit).
It was risky, the people that made those loans must learn that on their own, it's called risky for a reason. Here's a solution I have to those lenders, renogatate with your borrowers. No one wants to be kicked out in the streets and the banks could still make money on the deal. How about offering a five year that freezes the princible and charging in a sense a renters fee for families to stay in their home? This could be done without a handout by Uncle Sam.
Let the value of the property fall. It will level out and start to rise on its own. Getting the government involved with an influx of money (which we don't have) to artificially stablize the values just sets us up for another crash. The stock market has already stablized. The bailout does nothing to help crystal stevens husband job.
Government is not the solution, its the problem. There is no way to regulate stupity in the pursuit of profits other than failure. If the banks were smart enough to get themselves in this mess than should be smart enough to get out.
I feel for all of you with a shaky economic situation.
Since Zero isn't leaving after all, maybe I should close this topic?
But I was winning the argument!
Oh, that makes all the difference in the world, then, snapper.
I believe everybody has a fork stuck in this poisoned pie. To blame one person or party displays considerable naivette. I try to find the facts behind anything that highly matters to me, politically. Unfortunately, the facts are very convoluted. I can check to see who voted for or against a particular bill, but then I have to figure out why. Have you ever looked at one of those bills? I doubt half the people in the commitees who introduce any bill know what all's in it after it reaches the floor. I sincerely doubt very many of the congressmen actually read any of these bills; they probably get interns to read them, tell them how to vote, and then highlight for them whatever part they want to talk about for thirty minutes! Most of these bills are full of payoffs or misguided uses of power along with whatever they were originally designed for.
In the end, businesses need to borrow money to operate, which gives us jobs, which allows us to buy things (with cash or credit), which makes money for businesses, all of which makes tax-revenue for government. Isn't it interesting how that works. Let's not be rash in our decisions; let's figure out why the bull has horns and the bear has claws; and let's not depend on any one channel, statistic, or party to convince us it represents absolute truth.
And I like keeping the topic open because it's a place where I can vent my fear and frustration regarding the economy which directly effects my stability as a writer.
Cheers.
If you (the gov't) choose to buy something, expenditure, then you'll have to pay for it no matter how you do it, and that will make you poorer in a sense. (Though the service you're purhcasing might be worth the price tag, but all too often it's a war in iraq)
There are basically 2 ways to finance it.
1. Pay for it, aka raise taxes immediately.
2. Get a loan, aka defecit spending.
The argument for the former is that it leaves no debt, but the argument against it is that it shrinks the economy immediately.
The argument for the latter is that it does not shrink the economy, so it allows it to grow unrestrained. But small interest payments have to be made on a regular basis - perhaps forever.
At the end of the year, with option two, the economy will have grown moret (the same way your bank account grows with interest payments as you let your money sit there).
But if you use option two, then while you escape "debt", your economy will not generate as much "interest" as it would have otherwise, because it was shrunk early on.
[All interest is, is the value of having money immediately rather than some time later.]
So how something is financed is not the issue, because either can be the better option depending on several factors, the real problem is the expenditure in the first place. Is what you're buying worth it or not? That is a much better question to gripe about than how it ends up being financed.
For clarity I will construct a simple example. Let's say you have a bank acount with 1000 dollars, and you want to buy 100 dollars worth of clothes. Let's also assume that the interest rate for your credit card is 10%, and the interest yield on your bank account is an additional 10%. [I realize that banks give more like 2% and credit cards can exceed 10%, which is why debt is such a bad thing for an individual consumer. But the truth is, the growth of the economy is more than 10% per year, and the interest rates on t-bonds is less than 5%. But for fun we'll have the error in your favor, and see how that goes.]
Now you have two choices. You can buy the clothes outright with your debit card. Or you can purchase them on credit.
If you buy the clothes outright then you have $900 left in the bank, and over the course of the year it yields an additional 10%, which leaves you with $990 at the end of the year.
If you purchase it on credit, you set aside $100 as a fund to pay the interest. So your bank account is $900 plus an additional fund to pay off the $10 per year interest payment on the debt.
But that 100 also grows. So your bank account yields $1100 at the end of the year, but you lose $10 for the interest rate owed for taking the loan, and you then pay the $100 to remove the debt, and you're left with $990 at the end of the day.
In other words, it's a wash.
But in both cases you have less than the $1100 you would have had, had you not spent anything at all.
So it isn't so much about how you finance the expenditure, it's that you choose to make the expenditure in the first place.
[This message has been edited by Zero (edited October 01, 2008).]
1) the economy will choke and shrink now and we will have a smaller deficit and the problem will still be there
2) Runaway inflation will be the result of the market dealing with a debt we can't pay in the future (it happened to every third world nation that borrowed too much in the 70's)
The major problem is we elect the wrong people. Laywers, doctors, and military service. all honorable professions but maoney management is secondary to them. We need accountants in office. Not silver spooned sons of the people that set us on this path in the first place.
Can you technically have a recession when the nation still produces sixty-five different kinds of cereal (that's dyed and flavored popped rice with marhmellows, we're not talking nutritional staples)just because we can and don't forget our reality TV? Notice how you never see Sudanese Idol anywhere. I think America has a little way to go before we hit the rocks at the bottom. I live in hurricaine central and after watching how effective the government buy-out in New Orleans was, I'm hard pressed not to picture more big screens, Wii's and black Ford Expeditions rolling around, just waiting for the money to run out, the school clothes to get too small and the dryer to break down so people can start whining again about the bad thing that happened five years ago. I mean, Sally Struthers isn't walking up to my neighborhood yet. I know we're bad off and all, but ... In my experience, floating a check until payday just isn't a good idea. And I'm talking about ten dollars for gas to make it to classes, not a kajillion dollars to keep us until the next buy out.
I think folks just better get strapped in, because we have an election coming up and the media is about to start spewing armageddon every time you turn it on. I'm an L-word (No! The other L-word, as in the political party we're not mentioning.) at the most basic level. There's only 4 things that really matter to me, and they all live under my roof. Every decision on a political front comes back to 'how does this affect my homefront' for me. I served my country and I'll take what I can get back from it, but the other side of that coin is: I was in the military, I'm not gonna have my family hanging on, witing on the government's follow-through, either. The more the government owns that should be held in free market, the closer we get to rations.
(Soap box is empty if anyone wants a go.)
As long as it doesn't turn into a flame war, and as long as it stays IN THIS TOPIC, I won't shut this down.
But, please, keep it down to a gentle roar?
Of course, the other point was not to get panties into too tight a wad. We have been through much worse as a nation and the media is just obnoxious at the moment. We need to stick together as Americans and not be so eager to turn to the easy out. Local Eccumenical action will never need a bail out, because at some level, as long as one American has an extra can of spam, nobody will starve to death. Some may just have to forego this years must-haves.
quote:
thumbs up from KDW
Not hardly. More like throwing my arms up in the air, or washing my hands.
I still don't want this discussion to get political, and though it is verging, it is behaving so far. Please keep it that way?
I appauld RG sentiments. I have one other question I would like someone to answer.
If the bailout is approved, 700 billion will need to be borrowed. usually the banks loan us the money. Are we going to borrow money from the banks to hand back to the banks?
I think the scare could be good for the economy. This is far from the great depression but our bail outs are increasing exponentially. We are resilliant as a people and it could be a good thing for individuals to learn the value of a dollar, save, make better decisions, and find a rational return to investment enviornment and fundamental value shift.
I'm not speaking as a completely uninvolved party, either. This started scewing with my families plans back in August. Trust me. My house is on the market!
Oh! Now I see your question. Yeah, sell loans to these guys to give to those guys who have proven their money management skill level -- and I think the current plan requires that the securities be paid back within something like 30-40 days. I say go to vegas and put it all on black! If we win -- every one gets a new Prius, if we loose, we give vegas the IOU. (that's option five)
[This message has been edited by Reagansgame (edited October 02, 2008).]
Seriously though, every billionaire with an opinion has come out against the bailout. Now if they love Wall Street, and they do, then why are they so against this? It's because IT WON'T SOLVE THE PROBLEM!
This banking fiasco is ultimately the fault of the banks. Sure, a bunch of ignorent (and I do mean "lacking sufficient knowledge") people signed loans that were destined to default based on fluctuating rates and property values that inflated like a 90's tech stock, but the banks made the deals. They fought against the limits in congress, and got what they wanted (by apparently padding various congressmen's back pockets). We should let them take the hit.
I promise you that "there is always a bigger fish" to swallow a failed bank. If congress does anything, they should increase FDIC insurance on banks, so there isn't a bank run. Hopefully, it would be money they'd never have to spend.
Regarding the deficit, we often do not realize what our country's budget is (much like some people don't know what their own personal budget is). In 2007, our country's revenue was $2.568 trillion with expenditures of $2.73 trillion. If my math is right that puts us about $162 billion in the hole. Of course then we have our national deficit that is around $10 trillion.
Now imagine you made $25 thousand a year, and you bought a $100 thousand home. You paid your house bill each month, but you racked up a little over $2 thousand in extra bills each month. That's where we are.
FYI, we have a $847 billion trade deficit, much of which is oil (13.15 million bbl/day = times how ever much oil is that day).
All of this in consideration, it would make sense to me to decrease dependence on foreign oil and cut spending ASAP, instead of further destroying our economy by raising taxes on businesses that supply JOBS, so we don't end up FUBAR.
[This message has been edited by philocinemas (edited October 03, 2008).]
[This message has been edited by MrsBrown (edited October 03, 2008).]
JPMorgan, Citigroup, and Wells Fargo are willing to assume billions in obligations (the depositors cash assets) if they're free of these other obligations (the mortgage / debt end). It would suggest that end of the banking business is fine and the problem is all at the bad debt end.
(I'm with Wachovia myself. It's not something I went to---they inherited me when they bought out my local bank. Not the first time this has happened to me, too---one checking account that I used to have, long closed out now, went through four names before winding up with Bank of America. I always find these mergers unsettling, especially when I get stuck with old checks with the old bank name...when I get back from vacation, I may look for a local bank to start a new account with.)
In other words, the individuals who pushed the wall street banks into risky investments have already taken their cut and moved on, so to speak, while the institutions themselves are crumbling apart. So failing to assist them does nothing to "punish" those responsible for the mistakes, it only allows the institutions themselves to be crippled and fall into extremely dangerous disrepair.
Let's all riot and burn everything--it'll feel good and keep you warm if you can't afford fuel.
--Sets fire to a car (not mine, of course--that's in the garage out of the rain)--
[This message has been edited by skadder (edited October 06, 2008).]
[This message has been edited by skadder (edited October 06, 2008).]
quote:
--Sets fire to a car (not mine, of course--that's in the garage out of the rain)--
--Goes into garage and torches car.
800 point drop. (Shaking my head) Well, at least we have the pharmacueticals and liquor sales to balance that out. See you guys on the other side of 45 days, when we have to bail out for the bail out.
Was the extra 150 billion really necessary? I mean how can you add that kinda cheese in just a few days? Not doing much for my confidence. Oh well, I'm really glad I have my armegeddon roster in the works already.
I'm off to watch The Village again, take a few notes. Plenty of openings if there are any takers.
[This message has been edited by snapper (edited October 08, 2008).]
...because I like being a trouble-maker every now and then.
This rings of conspiracy!
[This message has been edited by philocinemas (edited October 03, 2009).]
RFW2nd
I think it's about time we got back to a Monarchy. Someone like King Arthur, maybe Oprah.
I thought this was already a monarchy, or at least a dictatorship.
signed,
She