Economic Recession? Depression? Impending Doom?

6SpeedTA95 · 02-10-2008, 11:42 PM

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Economic Recession? Depression? Impending Doom? | The Liberty Lounge

The United States is an economic powerhouse. The economic engine of the US has more output than any other nation on the planet. In fact only recently and due to the fall of the dollar has the EU surpassed the US in dollar output. The EU has 50% more people than the US and had the dollar not slid or had the slide stopped in mid/late 2006 the US would still be ahead of the EU in USD output as our real economic output has gone up considerably the last few years. However, this economic engine has begun to sputter.

I believe the government needs to take a series of steps to help smooth out the economic bumps in the road. The government is partially responsible for this current economic slowdown and as a result they need to help limit the impacts of the recession. We need to limit mortgage adjustments for loans that are resetting. The fed chairman needs to keep rates relatively low. Finally, it is imperative that corporations bear some responsibility for their bad decisions. More on my recommendations in a bit, first a brief history in how/why we’re in the mess we’re in.

bheld · 02-12-2008, 03:39 PM

Home values need to re-adjust no matter what. Unfortunately this means that many people will not be able to keep their homes. These aren't poor people, they're people that over-extended themselves, speculators, and other people that for some reason or another bit off more than they could chew. These people collectively forced home prices higher and should bear the brunt of the correction along with the banks that went along just to make a buck.

No bailout. The sooner we get all of this behind us the better. Lower fed rates, locks on rate adjustments, and all these other types of "solutions" only prolong the inevitable. The reality is that we will not go back to 2002-2005 growth rates for a very long time, if ever, and consequently the people banking on 10% annual growth are going to get flushed out sooner or later. There's no need to prolong the inevitable just to give irresponsible lenders time to pass the buck.

Phantom · 02-13-2008, 01:12 PM

Originally Posted by bheld

No bailout. The sooner we get all of this behind us the better. Lower fed rates, locks on rate adjustments, and all these other types of "solutions" only prolong the inevitable. The reality is that we will not go back to 2002-2005 growth rates for a very long time, if ever, and consequently the people banking on 10% annual growth are going to get flushed out sooner or later. There's no need to prolong the inevitable just to give irresponsible lenders time to pass the buck.

agreed 100%

I had you pegged in my mind as a bleeding heart liberal. I must have been wrong. Good post.

motivez · 02-14-2008, 02:36 PM

Originally Posted by bheld

Home values need to re-adjust no matter what. Unfortunately this means that many people will not be able to keep their homes. These aren't poor people, they're people that over-extended themselves, speculators, and other people that for some reason or another bit off more than they could chew. These people collectively forced home prices higher and should bear the brunt of the correction along with the banks that went along just to make a buck.

No bailout. The sooner we get all of this behind us the better. Lower fed rates, locks on rate adjustments, and all these other types of "solutions" only prolong the inevitable. The reality is that we will not go back to 2002-2005 growth rates for a very long time, if ever, and consequently the people banking on 10% annual growth are going to get flushed out sooner or later. There's no need to prolong the inevitable just to give irresponsible lenders time to pass the buck.

I don't think the companies should get any bailouts either, and I agree when Obama has talked about not helping people who don't actually live in the homes, and were just trying to play the market..

But as far as families and people who actually live in the homes in question go, I think something should be done so we don't have entire neighborhoods and maybe even some communities go bellyup because of massive amounts of foreclosures.

6SpeedTA95 · 02-14-2008, 11:08 PM

Originally Posted by motivez

I don't think the companies should get any bailouts either, and I agree when Obama has talked about not helping people who don't actually live in the homes, and were just trying to play the market..

But as far as families and people who actually live in the homes in question go, I think something should be done so we don't have entire neighborhoods and maybe even some communities go bellyup because of massive amounts of foreclosures.

Thats just it, banks people and government are all to blame on thsi deal. And as big a free market guy as I am, there are some rare instances, this is one where something needs to help ease the pressure on housing or it has a huge impact on us and really the world.

Donkey® · 03-23-2008, 05:39 PM

That's the problem with a "free market". Free market is all wonderful when profits are rolling in...but when companies like Bear and Stearns or the airlines need a bailout, who ends up bailing them out? The taxpayer...the government. The same people that are for these bailouts are the ones screaming "personal responsibility" at individuals who need a bailout.

Ardentfrost · 03-25-2008, 11:44 AM

why, again, are you saying "government bailout" is "free market?"

As I've said before, let those businesses die. They made poor decisions, and deserve it.

People might be screaming for bailout, but those people don't embrace the personal responsibility mantra.

Rouger2 · 03-25-2008, 03:04 PM

Originally Posted by Donkey®

That's the problem with a "free market". Free market is all wonderful when profits are rolling in...but when companies like Bear and Stearns or the airlines need a bailout, who ends up bailing them out? The taxpayer...the government. The same people that are for these bailouts are the ones screaming "personal responsibility" at individuals who need a bailout.

Like the old saying goes, capitalism for the poor or average guy and socialism for the rich or big business.

Heres Johnny · 10-05-2008, 12:58 AM

The part that sucks is that we're damned if we do and damned if we don't support this shitty bill. Because the corporations will take out of our pockets. AIG probably has the most life insurance policies in America and God only knows how many funds have been created by lehman brothers. It's not just about defaulting on realistate investments, they've got us by the balls. It just sucks that no matter what, we're the one held accountable for Corporate America. We're being held at randsom by our own companies. It's just legalized extortion.

Photon1001 · 10-05-2008, 03:16 AM

If anyone's interested, here's who voted for and against the final bill in the senate.

The Senate bail-out vote tally, complete list

goldenponderbob · 11-11-2008, 10:53 AM

The three question premise blooming here sidesteps a few others that perhaps could use some sunlight and fertiizer (which apparenly we have in abundance). As long as we're here, why stop at three?

Unemployment at 6.5% is worst since 94' (fourteen years ago according to this week's figures). That matches up with when Clinton's massive tax increases began, yet another simulus shot [equivalent to taxcut) is the most commonly proposed short term medicine? Didn't 94' + tax increase lead in short order to economic good times? Wasn't even on the table by 96's Clinton-Dole tussle.

How many illegal immigrants, exactly, lie at the bottom of the economic food chain, and how do they cope with recession? Have they asked their cousins "down there" to stop coming over the border til' things turnaround?

The economy over the past eight years has had its ups and downs, so why did it tank so perfectly for Democratic purposes, and what would been Obama's main issue, had the economic situation not been so handy? Are socialists around the world powerful enough to tank the U.S. economy for political gain? Look at how much they coughed up for O's campaign last September alone? 08' as aDejaVu of 02' is striking?

When the nation's attention was focused on Clinton's dalliances and the impeachment business (98' thru 00') the economy, getting a breather from new spending due to where the nation's attention was focused, performed well enough to put the government into positive cash flow and created a surplus in the treasury.
Why is that not fair game for discussion?

Nobody supposes The $700 Billion is not tied to the decline in property values, and everybody seems to believe property values will recover, so why isn't the taxpayer stake in this secured by "real property" with the government holding the deeds?

Do taxpayers understand that the wealth created by the rise in property values wound up in the pockets of silk suited gamblers who used the dough to setup a ponzi scheme that paid off bigtime as long as new cash kept flowing in. It ran exactly like the illegal pyramid scheme it was. In no way was the money used to finance the scam secured by real property, that's just where the cash originated.
It would be the same as an insurance saleman gambling his commission at a craps table in Vegas. Money he lost would be his, not the insurance company's. The point is we're reimbursing the gamblers caught at the bottom of the pyramid when the cash from rising property values stopped coming in. Somebody was bound to be stuck, that's why its call it a scam and that's why pyramid schemes are illegal. We became the suckers at the bottom of the pyramid. The questionis how many out there know that?

Photon1001 · 11-11-2008, 11:47 AM

very interesting, although with the American economy now so in the tank, or so I've heard, record numbers of immigrants be heading home of late.

Mexican laborers giving up, going home | The San Diego Union-Tribune

Economic Self-Deportation: Mexicans Leaving the U.S., No Longer Just Because of La Migra « Feet In 2 Worlds

goldenponderbob · 11-11-2008, 04:55 PM

I want to add a followup to the post above. I didn't finish the thought I was trying to make (probably because I'm still surprised at last month's baldfaced taxpayer ripoff). I hope readers will excuse the grammer as it's flaws pale in comparison with the subject matter (and anger ought to excuse journalism skills when, like profanity, they accentuate the point, albeit unintentionally.

I was comparing the insurance saleman with the mortgage insurance lenders who speculate (gamble) on the rise and fall of mortgages in a manner people in the twenties gambled on the stock values of major corporations without ever involving the NYSE or actually purchasing a negotiable security.

I had intended to make the point that the $700 Billion that congress reluctantly approved last month and "Wimpo", as our Bush League leader ought to be known in the history books, signed into law, did not bail out the people who hold mortgages, but the gamblers who speculated on the value of the paper the mortgage lenders held as security for the loans they made (in other words the integrity of homeowners to honor their debts). Unlike an actual mortgage, Real Property is not involved, and no collateral exists except the integrity of debtors to honor their debts. It's pure gambling and our bailout is as silly as asking the people of Nevada to cover the casino losses of that salesman who gambled away his paycheck. You could, I suppose, feel sorry for the saleman and his now homeless family, and possibly send him some cash if you had it to spare, but first you ought to know the facts. The saleman in this scenario is fictitious, but the situation and the $700 Billion is quite real.

Bottom line: when you hear the phrase "mortgage backed securities" or the more recent euphemism "instrument" remember its intended to sound legitimate, but it's real name is "a derivative" (a legitimate math term hyjacked to sound impressive) and the entire business is smoke and mirrors doubletalk to cover the fact that it's gambling mixed with stealing. In the end some unsuspecting sucker will be left holding the bag (remember, in the game he played there never was a deed) which is why the practice of speculating on stocks was made illegal back around the turn of the century. All that has to occur in the absence of a deed, is for the debtor, whom the sucker has never even met, to decide to walk away from his financial obligation.