The Economy (NOT POLITICAL)
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Our economic recovery will depend on a million decisions, just as its downfall was caused by a million decisions. In my mind it began when the U.S. began shipping manufacturing jobs out of country. With no jobs, or lower paying jobs, less money was available to buy goods and services. That was hidden for a while by credit buying, but was present.
Glass-Stegal, which was passed in the early thirties to prevent the type of financial activities on the part of banks that deepened the Great Depression, was undone in the late 1990's. Interest-only loans with adjustable percentages came into being. Real estate agents started jacking up the prices of homes. People, eager to make a profit went along with that. Loans were made to people who couldn't afford them. People bought property they couldn't afford with the idea that they'd make big bucks back in five years. Credit buying became a way of life for millions. Houses became an investment whose value was counted on to increase. Democrats insisted on sub-prime loans being made by Freddie and Fannie. Republicans and Democrats, for differeing reasons, rejected efforts by Bush and McCain, among others, to stop sub-prime loans. Banks decided that holding bundled mortgages was a good way to make money (see Glass-Stegal). Those holding Adjustable Rate Mortgages were caught when rates went up and their income didn't. Banks holding those mortgages, bought as investments, were screwed when people couldn't make payments.
In the meantime we were borrowing billions from China and anyone else available to finance our military activites. That ran our national debt to astronomical amounts.
The whole bubble fell apart when energy costs, driven by speculators after maximum profits, skyrocketed. Suddenly the cost of doing business rose along with prices of just about everything. People went into conservation-of-money mode, stopped buying, stopped going places, stopped driving as much and the economy tanked.
The idea that one person caused all that, as well as the idea that one person can cure it, is ridiculous.
It's going to take a million decisions by a million people to overcome it all. A good start is to re-enact Glass-Stegal and regulate banks. Go back to the idea of loaning money only to those who can afford to pay it back. Pay real estate agents and loan officers a flat fee instead of a percentage. Give incentives to manufacturers to build things here. Regulate speculation in food (I missed the grain bubble when listing problems above) and energy.
But the most difficult of all and least likely to happen: millions of people from all walks of life have to realize that instant gratification, keeping ahead of the Jones, and maximum profit in all transactions are counterproductive.
I'm not holding my breath. But I'm hoping.
Glass-Stegal, which was passed in the early thirties to prevent the type of financial activities on the part of banks that deepened the Great Depression, was undone in the late 1990's. Interest-only loans with adjustable percentages came into being. Real estate agents started jacking up the prices of homes. People, eager to make a profit went along with that. Loans were made to people who couldn't afford them. People bought property they couldn't afford with the idea that they'd make big bucks back in five years. Credit buying became a way of life for millions. Houses became an investment whose value was counted on to increase. Democrats insisted on sub-prime loans being made by Freddie and Fannie. Republicans and Democrats, for differeing reasons, rejected efforts by Bush and McCain, among others, to stop sub-prime loans. Banks decided that holding bundled mortgages was a good way to make money (see Glass-Stegal). Those holding Adjustable Rate Mortgages were caught when rates went up and their income didn't. Banks holding those mortgages, bought as investments, were screwed when people couldn't make payments.
In the meantime we were borrowing billions from China and anyone else available to finance our military activites. That ran our national debt to astronomical amounts.
The whole bubble fell apart when energy costs, driven by speculators after maximum profits, skyrocketed. Suddenly the cost of doing business rose along with prices of just about everything. People went into conservation-of-money mode, stopped buying, stopped going places, stopped driving as much and the economy tanked.
The idea that one person caused all that, as well as the idea that one person can cure it, is ridiculous.
It's going to take a million decisions by a million people to overcome it all. A good start is to re-enact Glass-Stegal and regulate banks. Go back to the idea of loaning money only to those who can afford to pay it back. Pay real estate agents and loan officers a flat fee instead of a percentage. Give incentives to manufacturers to build things here. Regulate speculation in food (I missed the grain bubble when listing problems above) and energy.
But the most difficult of all and least likely to happen: millions of people from all walks of life have to realize that instant gratification, keeping ahead of the Jones, and maximum profit in all transactions are counterproductive.
I'm not holding my breath. But I'm hoping.
#15
#17
yea before all this bailout business some experts were saying that this could be a natural cycle and would eventually bounce back
now that we've interferred with these bailouts and stuff who knows what will happen
no one knows if the bailouts will hurt or help, but to me it seems like it will end up hurting in the long run. and if theyre gonna bail someone out, why dont they bail out the middle class? the ppl who lose their jobs and cant pay bills
if they bail us out, we'll have money to spend and stimulate the economy
instead of giving money to ppl with millions already
now that we've interferred with these bailouts and stuff who knows what will happen
no one knows if the bailouts will hurt or help, but to me it seems like it will end up hurting in the long run. and if theyre gonna bail someone out, why dont they bail out the middle class? the ppl who lose their jobs and cant pay bills
if they bail us out, we'll have money to spend and stimulate the economy
instead of giving money to ppl with millions already
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