I agree, a depression is imminent. I disagree that "The New Deal" was a good idea. In fact, most economists are in agreement that it only
prolonged the great depression. The moves that the Fed are making now will do exactly the same. The government is reponsible for this...
The government mandated that banks give home loans to people who could neither afford them or would be able to ever repay them. The Fed lowered
interest rates into the cellar to create a credit bubble of historic proporations - again, making credit available and affordable to people who
neither deserved it or would be able to manage it if/when rates climbed. The Congress repealed safeguards and over-sight of the securities and
trading industry allowing them to create exocitc invenstment packages out of pure crap. The derivatives market was permitted to grow, unchecked,
beyond the scope of manageability. In short, they have done the OPPOSITE of what they shoudl have been doing for the past 20 years - that is provide
oversight and regulatory control and let the market do its thing.
Todays games; bailouts, quantitative easing, ZIRP, loans etc... are only going to make these problems worse. Businesses that fail due to poor
management decisions deserve to fail - no matter how big they are. In fact, how did they get so big to begin with? Why no anti-trust oversight?
These monopolies should have been divested to protect the American people - another failure of government!
In a free-market system, coupled with careful over-sight and regulatory safeguards, none of this would have occurred and if a business failed, it
wouldn't have been such a big deal! Now we are turning to a.) the government who allowed the problems, b.) corporate management who created the
problems and c.) the taxpayers who have already been squeezed into poverty to solve the problems. Can someone please help me make sense of this? If
you went to a doctor who misdiagnosed you, almost killed you by providing the wrong treatment... would you return to that doctor with more money in
hand and ask him to cure you???
A very smart "Bailout" would have been to put the dollars into the hands of the taxpayers - and I'm talking about some pathetic, paltry $1,000
"Stimulus" which stimulated NOTHING. Let's break it down - So far, our government has backed over $8 TRILLION dollars in tax-payer monies to
banks, investment houses, insurance companies and industry - and it has accomplished exactly NOTHING!
I'm not sure what the right mix would be, but would should have been done was to provide every taxpayer with a tax rebate of, say, $10,000 per person
earning less than $25,000 a year. Give $15,000 to those earning $25K to $75K. Give $25,000 to those earning $75,000 to $200,000. That would have
cost about $3.3 Trillion - about a third of what we've given out thus far.
Guess what this would have done... It would have allowed people to catch back up on their mortgages, thus putting money back into the housing market
and propping up the lenders. It would have allowed people to pay off debt thus propping up the banks and the creditors. It would have allowed people
to save thus giving the banks much needed liquid assets. It would have allowed people to invest thus propping up banks, investment houses and the
stock market. It would have allowed people to spend, thus propping up retailes and manufacturers.
See, economic theory is so basic that the idiots in Washington can't see its simplicity. When lots of people have money, lots of money is spent
meeting the needs of those individuals. When fewer people have money, less is spent and circulated because there are fewer needs to be met and
hoarding is likely to occur. When that happens... RECESSION! If the process isn't corrected from the bottom of the free market you get DEFLATION!
To correct deflation the stupid Fed will print money and debase the currency leading to Hyper-Inflation. Hyper-inflation leads to depression. Just
look at what happened to the Weimar Republic! Why can't the "officials learn from history - DOLTS
Yeah, a depression is coming and is hardly avoidable at this point. There are no bullets left in the gun save taking back the TARP money and
providing a MASSIVE stimulus directly to the American people. Couple that with meaningful tax cuts and more sound fiscal policy from Washington
(YEAH, RIGHT:@@
and maybe, M A Y B E we can turn this thing around/
In the meantime, since my knowledge of history tells me that our "officials" are too stupid - stock up on food and other valuables - you're going
to need them!