Follow the money. Where did it all go? Mortgage companies made easy cheap loans to people that should not have qualified for any loan because they could never repay them. In turn those folks used the money to buy houses and to hire contractors to build houses, which in turn stimulated the economy. The Gov't supported this - growth at all costs. It was affirmative action for housing - no one could be turned down for a loan.
Seven years later the well ran dry.
The subprime debacle has been the largest economic stimulus plan in history. 700 Billion and counting. And now the Dems say the gov't needs to do something for the poor homeowners. Haven't you done enough already?
You can thank the "I support the bill.....NOT!" head fake by the Republicans for the latest market meltdown. To hear the initial excuse that 12 House Republicans were angered by the partisan speech Speaker of the House which prompted them to change their vote to no just boggles the mind.
ReplyDeleteTo make matters worse, congress is going on recess for two days while Rome is burning.
They all need to get the boot.
Our tax dollars at work........NOT!
Good luck in this environment- it's going to be quite a challenge.
This bill goes against everything that the GOP stands for. It is the mother of all gov't handouts.
ReplyDeleteIt was an ill-conceived band-aid put together by a dysfunctional, polarized government.
And now, several days later, it has become obvious that the market is going to burn regardless of the bills passage.
As for this upcoming financial challenge, I think it is important to keep the situation in perspective. As I see it this is nothing compared to what previous generations have gone through.
They had to do something to unfreeze the credit markets, although I disagree how they went about it by tagging the taxpayer with the burden. The Govt had little choice thanks to the failure of Bernanke and Paulson so see this crisis coming. That plan was just to help an economy in cardiac arrest....in does little for its other grave ailments.
ReplyDeleteUnderstand that this is a worldwide event, not just a US political issue. I like your optimism, but we really don't know where we're going with this- we are in unchartered waters. I can tell you this though, if we are lucky, it will just be the WORST recession in recent history.
As for previous generations, this has the potential to be much worse due to the fact that previous generations had the good sense not to live beyond their means via easy credit. Do a head check around you- how many people do you know have a decent amount of savings? I bet you'll find the majority basically just live for today with very little in savings beyond their 401k. How much debt do you think they have? As the economy grinds slower there will be more job loss and layoffs and these folks have no safety net. Now add the fact that our economy's GDP is driven mostly by consumer spending, which is drying up fast, you can see the potential death spiral we are in.
Is this the end of the US? Of course not, but a grave recession or depression is a real possibility.
We have never been in a more serious time since the great Depression...
Its been a couple of generations since this country has seen true hardship. The depression was preceded by the roaring 20's - a time of outrageous excess, speculation and little personal savings.
ReplyDeleteThe lessons from those days have been lost on many. Evidently it's time to re-calibrate.