How are we going to pay for the bail out? (insurance, real estate)
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It seems to me that the whole reason why the nation got into this terrible financial mess is because of NAFT and job sourcing to countries like China and India. We got rid of thousands of white and blue collar jobs here in the United States which offered a good salary. The positions taken away were replaced with jobs at Wal-Mart, Home depot and Star Bucks. For the last twenty years our nation has been struggling with underemployment in which salaries levels have declined. The truth is we have used credit to try to maintain the very life style our parents had and its hurting many of us. The American dream just does not work for many of us. The government has decided to continually invent new taxes in order to offset the loss in payroll income taxes they have been collecting to help support the nation. The lending institutions created these insane mortgages because many Americans simply could not afford or qualify for a traditional mortgage, especially because the value of many homes was greatly inflated. It is no wonder why they failed since many Americans are living on the financial edge these days. When the price of oil and inflation rose, it finally pushed many over the edge. Now the government has stepped in and has begun a program to some what nationalize the financial markets using tax payer money which has not been collected or ever earned by American tax payers yet. With some many people now out of work and a great number earning well under their salary potential how are we going to pay it back? Who is the government supporting? The U.S. Constitution says nothing about socializing big business, especially Wall Street. Our Congressmen have been taking special interest money for years and now they speak for big business and not the American people. What I can't understand is why the government wants the banks to start lending money to Americans who just in the recent past could not pay it back in the first place. If you ask me our nation is starting to look like France’s government before their revolutions. The Federal Government is the first estate, Wall Street and Corporate American is the second estate and the American tax payer and worker is the third estate. The first and second estates will use their power to override the third and demand we pay a tribute to them. Last week is when it first happened. Peace
Please break down your posts into paragraphs so that are easier to read.
In the sense that our economy is no longer based on manufacturing but FIRE (finance, insurance, and real estate), you are correct. Outsourcing manufacturing has contributed to the problem.
Listen to the radio show I link to in my "The New Kleptocracy" thread to get a better sense of where the money is coming from and who is it going to.
Inflation. That is how we pay for everything else.
The government does a pretty good job of masking the real rate of inflation. Inflation is in the range of 10-20% just look at the price of every basic commodity that you consume. Gas, food, housing, college fees etc. Inflation only 4%? Yea right!
That is why I say buy things that are real and tangible. Buy large quantities of food and store them away you'll get a return of at least 10% guaranteed on that. Buy gold/silver, rental properties (that aren't overpriced and has the potential for + cash flow).
Debt is the money, money is the debt. If they print 1 Trillion to pay for it the Fed will magically create the money and its paid. This will either do 1 of 3 things.
1. Fed keeps new government bonds and 1 trillion in new currency floats. This will cause massive inflation.
2. The Fed sells most of these bonds to try and draw the new money out of the system. Since 1 trillion will be hard to swallow the interest rate will have to go up.
3. The Government raises taxes to take the new notes.
Choice #1 taxpayers pay through inflation.
Choice #2 tax payers pay through interest rates.
Choice #3 tax payers pay through direct taxes.
The winner? Banks. The loser? Tax payers.
The only real way out is choice #2 if the rest of the world is stupid enough to buy Treasury Bonds at low interest rates. They are wising up.
I like the magic beans method. It seems the most positive since creating more taxes and selling more bad debt does not seem to be the answer. Why would any one want our bad debt? If we could not make payment when they were due, who would want to buy them?
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It works like this
