What caused the recession?

[mriddick]

Serious question, the President is running on the R's coming back and putting in the policies that caused the recession in the first place. Didn't a housing bubble collapse cause the start of the recession? And if that's the issue then wasn't it the Dems that pushed reduced requirements for federally backed home loans that did more to push us into the recession then anything else?

[Warhog01]

I would say your assessment is correct, that housing mess started this economic disaster them is spread to other areas then the donks made it worse by legislation, never let a good crisis go to waste.

[Richard Simmons]

I would agree with you mriddick. What you said as well as the fact that far too many Americans have been living above their means, mostly via credit card for far too long. If you are over extended financially, just about ANY crisis tends to have a harsher impact. Couple that with an ever increasing "entitlement mentallity" and you have a recipe for disaster.

[samiam]

the blame can't be laid solely on politics, when you have bankers behaving like casino pit bosses and homebuyers acting like drunks on a roll at the crap table and the taxpayers picking up the tab no matter who wins how can there be any kind of positive outcome?

[cciota]

I think Carter started the whole mess with his Community Reinvestment Act back in 1977. Forcing banks to modify their lending standards so that everyone can have a home and a part of the American dream. It was mostly aimed at low income families. The banks were at fault also. They got credits form the CRA and started giving loans to anyone who could lift a pen. Fanny and Freddie, who administered and regulated the CRA, turned a blind eye to the banks greed and let the banks continue with giving out junk loans.

[Mark Ducati]

And what caused the housing bubble to burst? ..... GREED!!! Plain and simple, the original motivator and man's sin.

[Warthogg]

...... the fact that far too many Americans have been living above their means, mostly via credit card for far too long. ANY

Yup

The US economy is driven by consumer spending - roughly 75% IIRC. The US consumer was spent out......we had not only max'd credit cards and personal lines of credit but also many had tapped deeply into home equity. There was just not enough fuel (borrowing power) remaining to run the economic engine at those levels.

Presently US consumers are still reducing debt. How long debt reduction will continue will determine if we are headed for a double dip recession. (Presently those odds are about 40% we will double dip.)

[El Jefe]

Loaning billions to people who can't come up with a decent down payment, let alone make their mortgage payments, is a recipe for disaster. There were regulations put in place that forced banks to make a certain amount of subprime loans, then they played hot potato with the bad paper trying to not be the guy left holding the bag. Bush sent his people up to the hill in I believe 2002 warning them that something needed to be done or there would be problems. Frank and Dodd basically laughed in their face and called them haters.

The Democrats never worry about the long term ramifications of their actions, they just love to play Uncle Sugar and keep kicking the can down the road. Now we see what happens when it all catches up to us. Even now there's the big debate about the Bush tax cuts, and hardly anyone will even mention spending cuts.

[Richard Simmons]

[QUOTE=Richard Simmons;42501]

...... the fact that far too many Americans have been living above their means, mostly via credit card for far too long. ANYQUOTE]

Yup

The US economy is driven by consumer spending - roughly 75% IIRC. The US consumer was spent out......we had not only max'd credit cards and personal lines of credit but also many had tapped deeply into home equity. There was just not enough fuel (borrowing power) remaining to run the economic engine at those levels.

Presently US consumers are still reducing debt. How long debt reduction will continue will determine if we are headed for a double dip recession. (Presently those odds are about 40% we will double dip.)

Very true. The really sad part is that most accrued the debt over luxury items they surely didn't need and obviously couldn't afford and won't accept the responsibility for their choices. If and when they get that debt paid down or just default on it, one way or another, they'll go right back to the same old bad behavior. Some lessons in life can be taught, others must be learned. Many seem to ignore the former and run away from the later. Society in decline.

[O.S.O.K.]

Barney Frank and Chris Dodd are the most to blame. The housing bubble did indeed initiate the current economic depression that we find ourselves in.

But that was only the trigger. If everything else was in balance, it wouldn't have had the effect that it did.

The greed of the investment houses and them taking out bets against their own losses is what contributed the most to the "event". That never should have been allowed - it is theft on a grand scale.

And lets not forget our good friends the Federal Reserve Banking system - which should be abolished and replaced with a truely public owned federal system. There is no way that our country could sustain the long term skimming that has been underway since the inception of the fed - every dollar that is printed they get a %... its fucking robbery IMHO.

[Spiderhole]

A complicated series of issues caused the recession. Illegal immigration, outsourcing jobs overseas, companies incenting their employees to drive cost out of their business e.g. layoffs, shopping long standing vedor relationships. The housing collapse is a symptom of these things to some degree, but the structure of the mortgages that defaulted is also part of the problem. Our trade deficits are crazy. Our markets are a mess, and our government is ineffective through and through.

[AK_Apostle]

I don't trust either party. I've learned over the years their patriotism ends when the media leaves and they go back to their office phones where wheel and deal to set themselves up for life by selling out America.

Both parties are guilty of the mortgage fiasco which one went first is immaterial.


Speech given by George W Bush at St Paul's AME Church June 17, 2002.

http://www.presidency.ucsb.edu/ws/index.php?pid=62687

Now, we've got a problem here in America that we have to address. Too many American families, too many minorities do not own a home. There is a homeownership gap in America. The difference between Anglo America and African American and Hispanic homeownership is too big. And we've got to focus the attention on this Nation to address this. And it starts with setting a goal. And so by the year 2010, we must increase minority homeowners by at least 5 1/2 million. In order to close the homeownership gap, we've got to set a big goal for America and focus our attention and resources on that goal.

And I picked a good man to help realize that goal, in Mel Martinez. I don't know if you know Mel's story, but it's an interesting story. Mel was born in Cuba. [Applause] Yes, Mel brought his cousins with him—[laughter]—all two of them, anyway. [Laughter] But Mel's mother and daddy— Mel's mother and dad put him on an airplane to come to America when he was a young boy, because they didn't want his son growing up in a country that wasn't free. Think about that; think about the courage of a mom or a dad and their love for freedom—love freedom so much that they would put their child in the hands of loving Americans. And Mom and Dad eventually came. And here he now sits, as a member of the President's Cabinet. What a great country we have.

My point is, Mel understands what it means to dream and then to work to realize the dreams. I've also picked a fine friend of mine from Texas named Alphonso Jackson to serve as the Deputy of HUD. And where are you, Alphonso? There he is. I appreciate you. These are can-do people. So when we set a goal, they understand their job is to work toward that goal.

I also want to thank the mayor of Atlanta, Georgia, for being here, Shirley Franklin. Thank you for coming, Madam Mayor. Much of the success of this program is going to depend—depends upon the ability for the Federal Government to work with State and local governments. And I know the mayor has got a strong commitment to housing for all people and to end the ownership gap. Madam Mayor, thanks for coming.

I appreciate as well Johnny Isakson and John Linder, members of the Georgia congressional delegation, for coming today. Thank you all for being here. I want to thank Franklin Raines of Fannie Mae and Leland Brendsel of Freddie Mac. Thank you all for coming.

Today I had the pleasure of seeing an entrepreneur's work firsthand, an Atlanta citizen who also dreamt a dream, and that is to develop a piece of blighted property so others could benefit from her vision and hard work. Masharn Wilson is here. She is a president and CEO—Masharn is the president and CEO of her own company. Part of the economic security is not only owning a home; part of it is, if you have the entrepreneurial instincts, is to own your own business as well. So I want to appreciate you, Masharn. I appreciate your hard work.

And one other person I want to announce is a fellow named Darryl Hicks. Where are you, Darryl?

Darryl Hicks. Right here.

The President. There you are. Darryl Hicks is here. I want to—Darryl is—one of the things I remind our fellow citizens, if you're interested in defeating evil, do some good. You see, we're going to fight with our military, but we can also fight with our hearts. And a country which has been under attack can respond by loving your neighbor like you'd like to be loved yourself.

And this man right here is a fellow, Darryl Hicks, who works for Habitat for Humanity programs. He's interested in lending his heart and his talents to helping a neighbor in need. America can be changed one heart, one soul, one conscience at a time, so long as we are willing to love a neighbor like we'd like to be loved ourselves. I want to thank you, Darryl. I want to thank Darryl for being a soldier in the army of compassion.

And I also want to thank Reverend Dr. Thomas Bess for opening up this beautiful church. You know, one of my passions is the Faith-Based Initiative. It is important that Congress not fear faith-based programs but welcome faith-based programs, so we can help change people's lives. I find it most interesting that we would be talking about how we help people in a church. After all, that's why churches exist.

Audience members. Um-hmm.

The President. And so I am—I want to thank the church staff for opening up this beautiful facility to the army which follows me around. [Laughter]

I do believe in the American Dream. I believe there is such a thing as the American Dream. And I believe those of us who have been given positions of responsibility must do everything we can to spotlight the dream and to make sure the dream shines in all neighborhoods, all throughout our country. Owning a home is a part of that dream; it just is. Right here in America, if you own your own home, you're realizing the American Dream.

You know, today I went to the—to some of the home—met some of the homeowners in these newly built homes, and all you've got to do is shake their hand and listen to their stories and watch the pride that they exhibit when they show you the kitchen and the stairs. So people like Ken Beatty, who is an environmentalist; or Al Smith, a probation officer; or Geary Jefferson, a database administrator; or Darrin West, an Atlanta police officer; Tamika Henry—Tomika Henry Cole: These are all people that I've met. They've come over here today. They showed me their home. They didn't show me somebody else's home; they showed me their home. And they are so proud to own their home, and I want to thank them for their hospitality, because it helps the American people really understand what it means.

And what we've got to do is to figure out how to make sure these stories are repeated over and over and over again in America. Three-quarters of White America owns their homes. Less than 50 percent of African Americans are part of the home-ownership in America, and less than 50 percent of the Hispanics who live here in this country own their home. And that has got to change for the good of the country; it just does.

And so here are some of the ways to address the issue. First, the single greatest barrier to first-time homeownership is a high downpayment. It is really hard for many, many low-income families to make the high downpayment. And so that's why I propose and urge Congress to fully fund the American Dream Downpayment Fund. This will use money, taxpayers' money, to help a qualified low-income buyer make a downpayment, and that's important.

One of the barriers to homeownership is the inability to make a downpayment. And if one of the goals is to increase home-ownership, it makes sense to help people pay that downpayment. We believe that the amount of money in our budget, fully approved by Congress, will help 40,000 families every year realize the dream of owning a home. Part of the success of Park Place is that the city of Atlanta already does this. And we want to make the plan more robust. We want to make it more full all across America.

Secondly, there is a lack of affordable housing in certain neighborhoods. Too many neighborhoods, especially in inner-city America, lack affordable housing units. How can you promote homeownership if people can't afford a home?

And so what I've done is propose what we call a single-family affordable housing tax credit, to encourage the development of affordable housing in neighborhoods where housing is scarce. Over 5 years, the initiative amounts to $2.4 billion in tax credits, and that will help. It will help a lot to build homes where people can— where when fully implemented, people will be able to say, "I own my home."

A third major barrier is the complexity and difficulty of the home buying process. There's a lot of fine print on these forms. And it bothers people; it makes them nervous. And so therefore, what Mel has agreed to do and Alphonso Jackson has agreed to do is to streamline the process, make the rules simpler, so everybody understands what they are—makes the closing much less complicated. We certainly don't want there to be a fine print preventing people from owning their home. We can change the print, and we've got to.

We've got to be wise about how we deal with the closing documents and all the regulations but also wise about how we help people understand what it means to own their home and the obligations and the opportunities. And so, therefore, education is a critical component of increasing ownership throughout America: Financial education, housing counseling, how to help people understand that there are unscrupulous lenders. And so one of the things we're going to do is, we're going to promote education, the education of owning a home, the education of buying a home throughout our society.

And we want to fully implement the Section 8 housing program, homeownership program. The program will provide vouchers that first-time home buyers can use to help pay their mortgage or apply to their downpayment. Many of the partners today, many of the people here today, many of the business leaders here today are creating a market for the mortgages where Section 8 vouchers are a source of the payment, and that's good. See, it's an underpinning of capital. It helps move capital to where we want capital to go.

And so these are important initiatives that we can do at the Federal Government. And the Federal Government, obviously, has to play an important role, and we will— we will. I mean, when I lay out a goal, I mean it. But we also have got to bring others into the process, most particularly the real estate industry. After all, the real estate industry benefits when people are encouraged to buy homes. It's in their self-interest that we encourage people to buy homes.

And so one of the things that I'm going to talk about a little bit today is how to create a sustained commitment by the private sector that will have a powerful impact. First of all, we want to make sure that we help work to expand capital available to buyers and, as I mentioned, overcome the barriers that I've delineated as well as provide the education component. In other words, this is not just a Federal responsibility.

That's why I've challenged the industry leaders all across the country to get after it for this goal, to stay focused, to make sure that we achieve a more secure America by achieving the goal of 5 1/2 million new minority homeowners. I call it America's homeownership challenge.

And let me talk about some of the progress which we have made to date, as an example for others to follow. First of all, Government-sponsored corporations that help create our mortgage system—I introduced two of the leaders here today; they call those people Fannie Mae and Freddie Mac—as well as the Federal Home Loan Banks will increase their commitment to minority markets by more than $440 billion. I want to thank Leland and Franklin for that commitment. It's a commitment that conforms to their charters as well and also conforms to their hearts. This means they will purchase more loans made by banks to African Americans, Hispanics, and other minorities, which will encourage homeownership.

Freddie Mac will launch 25 initiatives to eliminate homeownership barriers. Under one of these, consumers with poor credit will be able to get a mortgage with an interest rate that automatically goes down after a period of consistent payments.

Fannie Mae will establish 100 partnerships with faith-based organizations that will provide home buyer education and help increase homeownership for their congregations. I love the partnership.

The Enterprise Foundation and the Local Initiatives Support Corporation will increase efforts to build and rehabilitate more homes in inner cities at affordable prices by working with local community development corporations. In my home State of Texas, Enterprise helped turn the once-decaying Ideal Neighborhood of Dallas into a vibrant community by building homes that were sold to residents at affordable prices.

The National Association of Home Builders will team up with local officials, home-builder associations, and community groups in 20 of our Nation's largest housing markets, to focus on how to eliminate barriers and encourage homeownership.

The Neighborhood Reinvestment Corporation will dramatically expand financial and home buyer education efforts to 380,000 minority families.

The Neighborhood Housing Services of America will raise $750 million to promote homeownership initiatives in many communities.

We're beginning to use the Internet better, so that realtors all across the country will be able to call up programs all designed to help minority home buyers understand what's available, what's possible, and what to avoid. The National Realtors Association will create a central databank of affordable housing programs, which will be made available to agents, real estate agents, to help people.

So these are some of the beginnings of a national effort. And I want to thank all those who are responsible for the organizations I just named for lending your talents to this important effort for America.

You know, one of the things Presidents can do is, they can call the old conference. So I'm going to call one—[laughter]—just to make sure people understand not only are we serious but to let them check in. If they've signed up and said they're going to help, this will give everybody a chance to say, "Here's what I've done to help." It's what we call accountability.

And so this fall, we're going to have a White House conference. It is a White House conference specifically designed to address the homeownership gap. It is a White House conference that will not only say, "What have you done to date"; "Have you got any new ideas that we can share with others," as well. I'm serious about this. This is a very important initiative for all of America. See, it is a chance for us to empower people. We're not going to talk about empowering Government; we're talking about empowering people, so they have got choices over their lives.

I want to go back to where I started. I believe out of the evil done to America will come incredible good. I believe that, as sure as I'm standing here. I believe we can achieve peace. I believe that we can address hopelessness and despair where hopelessness and despair exist. And listen, I understand that in this great country, there are too many people who say, "This American Dream, what does that mean? My eyes are shut to the American Dream. I don't see the dream." And we'd better make sure, for the good of the country, that the dream is vibrant and alive.

It starts with having great education systems for every single child. It means that we unleash the faith-based programs to help change people's hearts, which will help change their lives. It means we use the mighty muscle of the Federal Government in combination with State and local governments to encourage owning your own home. That's what that means. And it means—it means that each of us—each of us—have a responsibility in the great country to put something greater than ourselves—to promote something greater than ourselves.

And to me, that something greater than yourself is to love a neighbor like you'd like to be loved yourself. In order to change America and to make sure the great American Dream shines in every community—every community—we must unleash the compassion and kindness of the greatest nation on the face of the Earth.

I'm honored to be here today. I want to thank you for your interest. God bless you all, and God bless America.

[mriddick]

I wonder what the precentage of American are that lay the blame solely on GWB's feet for the recession? I got to believe it's not as large as obama would hope (or tries to say). I also wonder based on the above number if very many Americans take obama's word that the policies of one single administration were the reason for the recession.

[AK_Apostle]

George Bush is long gone, the truth is the only thing that matters. Did your read the whole article, it's not a Rush Limbugh sound bite?

[mriddick]

If I read it right it's not a article but a speech given by GWB, which I take as a continuation of policy from practically every President before going back to FDR (help bring the little guy up into mainstream society and give them a piece of the American dream). I'm not saying GWB didn't continue or even have policies of his own that might of help spur the recession but whether him and his administration are the sole blame of it as the current President seems so fond of saying (over and over again).

Do you blame GWB solely for the recession? I'm getting the feeling that atleast 90% of the responders here see other things in effect well before GWB that laid the ground work for the recession we are now going through. My own personal opinion is that the Dems want it both ways, they want to claim the recession is world wide and not just a US problem then they want to a US President's policies for it...

[AK_Apostle]

I voted for George Bush both times and certainly do not solely blame him for what's happened. But we Americans are going to have to start thinking for ourselves and quit letting Global Special Interests with their vast resources and connections pick the candidates we vote for or our children and grand children are going to be living in squalor.

Obama sucks, he's by far the worst president this nation will ever have elected.

[Kadmos]

The Community Reinvestment Act did NOT cause it. It's a total red herring that is popular with TV talk show hosts because it lets them mostly blame the democrats. It's bullshit. The numbers show that houses that effected that were a tiny percentage of foreclosures, and those houses actually dropped the least in value anyway, since most weren't exactly high dollar houses to begin with.

Frankly the fact that a huge percentage of the foreclosures were on commercial properties completely dispel that idea.

You can't blame this on democrats, nor the poor.

But nor can you blame it on republicans or rich bankers.

In reality it was everyone, and frankly it was mostly middle America more than anyone else. Middle America kept buying houses at overinflated dollar amounts. Middle America compounded this problem by taking on extra home loans to "dress up" their now inflated house prices (or to pay off other loans, bills, etc.).

When the problem hit is was middle America who decided to dump an "asset" that was a losing proposition. They went from paying on time every month and being the bulk of the cash flow to banks, to walking out on a mortgage.

That was the sweep to the legs that killed the banks at least.

But the why was building up mostly since about 2000, it was the over inflation of real estate prices, and some belief that those properties were actually worth that much.

For some stupid reason people bought houses for that much money, and as they did the economy turned more and more into building, rebuilding, rehabbing, updating, and furnishing those houses.

You cannot base an economy on the "home industry", and that is exactly what we did.

Nearly everything was geared toward making real estate as valuable as possible, which would have been ok to some degree, but when it was bolstered with ridiculously low interest rates it led to even more overinflated prices.

It could have been prevented quite easily, just raise interest rates, slow the growth, make people think a bit harder about buying property or investing more into the property they owned.

This we can blame on the government and to a degree the banks, but it actually in my humble opinion really goes back to 9/11.

After 9/11 everyone was highly worried the economy would tank, which to a degree it did. But the housing market (and thus the thinking about the long term outlook) was ok. So interest rates got lower to try to bolster that sector of the economy. The also bolstered business as money was cheap to borrow, but since real estate was doing well that's what the business mostly geared towards.

As the market plateaued as it should have, interest rates got lowered even more to "continue growth". That put us on the path to crash. At that point you can blame Bush or the FRB, as Bush pushed for lower rates and the FRB complied. But of course you still have to blame the people making the loans, the people taking the loans and the people who are in general supporting the industry (everyone).

In the end it doesn't much matter, you just have to say "well that happened" and then move on.

[Warthogg]

Serious question, the President is running on the R's coming back and putting in the policies that caused the recession in the first place. Didn't a housing bubble collapse cause the start of the recession? And if that's the issue then wasn't it the Dems that pushed reduced requirements for federally backed home loans that did more to push us into the recession then anything else?

I see two parts to the housing collapse:

1) dimocrats had forced freddy, fannie and commercial banks to finance mortages to unqualified (defined here as those who could never have paid their mortgage) individuals and those mortages would have collapsed even with no recession.

2) Other mortage defaults were 'caused by the recession'.........not the cause of the recession.

(IMHO of course but I am pretty confident of my answer here.)

[mriddick]

So is it the general idea that the world collapse was due the US market tanking and taking the rest of the world with it, or was it a world wide problem that only needed a trigger to fail across the board?

[Warthogg]

Most (if not all) of the so-called first world country's economies tanked.....I hesitate to say "world wide" but financially speaking probably the answer is YES. (From a world financial standpoint does not much matter if, for example, Fiji tanked is why I avoid saying world wide.)

[Richard Simmons]

So is it the general idea that the world collapse was due the US market tanking and taking the rest of the world with it, or was it a world wide problem that only needed a trigger to fail across the board?

I'm not sure. If this had happened 20 years ago I'd say our market was the main culprit but since the EU started I don't know if we really have as much influence in the world as we once did. I'd like to think we do but the truth may be closer to us just being the trigger to an existing problem

[tank_monkey]

I blamed television shows like A&E's "FLIP THIS HOUSE", where some douchebag buys a budget house, fixes it up and sells it for double. It was a total ponzi scheme that millions of people tried to get in on. California's Property values skyrocketed between 1999 and 2009 by a factor of five in some places, and it was all bullshit, mostly developers jumping on the bandwagon (can't really blame them, when buyers were paying more and more and more for idiotic houses, a developer sees that and says "I can build houses that these moron buyers can buy").

But MOST of the people who really got into trouble right away were the greedy morons who took variable rate loans with a really LOW introductory rate which ballooned to a HUGE rate in 12-24 months depending on the loan. But a lucky few managed to fix up their dump houses they bought and resell it BEFORE the huge interest spike happened and they would go do it again, and again. Some guys (very few) got hella rich doing this. The problem is when EVERYONE does it, the triangle scheme or ponzi scheme collapses.

I yelled at idiot friends (sometimes you just got buddies who are stupid with money and nothing you tell them will convince them otherwise, oh well, as long as they don't ask to borrow any $$ from you its their problem...) who jumped in on those variable rate loans with crappy low income and "Behold" they lost their house. Dumbasses...:loser:

Notice how the show "Flip this House" isn't on the air any more? Those guys would be LYNCHED by a mob right now. :mad:

[Kadmos]

I blamed television shows like A&E's "FLIP THIS HOUSE", where some douchebag buys a budget house, fixes it up and sells it for double.

Life imitates art.

but

Art imitates life.

Part of the reason the show was made was because so many people were doing it.

But I mostly agree, just on a larger scale. It wasn't so much the guy flipping A house as it was the developers stopping building dozens or hundreds of houses as soon as the prices dropped and he knew it wasn't quick cash anymore.

He could walk away scot free, file for bankruptcy (or just skip town), and let the banks take the partially built houses and all his equipment.

That was the first fatal cut. When those guys saw no future, they cut, which they could do easily. This left their guys out of work, and left their suppliers with no business.

In reality we were the victim of our own success.

With money so cheap and easy to borrow, too many people bought their "last" home. Also too many people just bought a home, or refinanced their own. Unless everyone bought a new home (or refinanced) every other year, it just wasn't sustainable.

We ran out of customers.

That's why prices fell, that's why developers stopped, that's why it spiraled.

So if you bought a house before 2000 and still haven't sold or refinanced than you are part of the problem. If you bought a house after 2000 or did refinance then you are part of the problem. If you didn't buy a house you are part of the problem. That's why I say everyone contributed.

[matshock]

Most (if not all) of the so-called first world country's economies tanked.....I hesitate to say "world wide" but financially speaking probably the answer is YES. (From a world financial standpoint does not much matter if, for example, Fiji tanked is why I avoid saying world wide.)


Pretty much every country in the EU (and the UK) had/has to some degree the same problems that we do. So did/does Japan. We're just bigger.

It drums down to balance of trade- it was/is completely unbalanced.

If I were a Chinese I'd be pretty pissed right now. OTOH I should have known better than to keep lending money to people who were sharing in the profits of my country's labor.

Think about it- the US takes out a loan from China, gives Apple a tax break so they can design I-Phones that are made in China then takes half or more of the profit and then turns around and asks the US for another tax break.

Heap snowballing entitlement spending on that and viola- Global Economic Model 1.0 (GEM 1) is a total failure. Start over.

[American Rage]

Please, this is the result of many things.

1st. 78 years of socialism. Social Security is a great example. Through mathematics, they've always known that it is unsustainable. But the goal was power, not sustainability.

2nd. The goals of the UN. Goal A: one world government. Goal B: the destruction of the US as was originally founded, otherwise there would be no Goal A.

3rd. The democratic, i.e., marxist-socialist, party's "nudging" the economy over the brink. Note: we've known forever that Social Security was unsustainable, and yet virtually every democratic president has had a huge increase in social/entitlement spending. If you can't pay for the first, why buy the second? The community reinvestment act is a perfect example, especially after Clinton 'perfected' it. Like I said, it's all about power. Now, their chickens have come home to roost, and their blaming the repubicans! And for good reason, many republicans today don't know shit, having been indoctrinated by liberals in our education system from K thru Phd!

4th. With the US reduced in power, due to our financial suicide, it will have no choice but to join the global currency and accept global governance. This will mean a much less powerful America, a much less free America, and a much, much, much more expensive America. And the justification will be the payment of our national debt and the massive crimewave that will come with the unemployment.



Rage

[Kadmos]

Please, this is the result of many things.

1st. 78 years of socialism.

2nd. The goals of the UN. Goal A: one world government. Goal B: the destruction of the US as was originally founded.

3rd. The democratic, i.e., marxist-socialist, party's "nudging" the economy over the brink.

4th. With the US reduced in power, due to financial suicide, it will have no choice but to join the global currency and accept global governance.




Rage

I don't think that tracks right.

First 78 years ago we were hardly a superpower. Just think of all the progress we have made in that time.

Second, I don't think anyone wants us on a world currency. The US bankers don't, the federal government doesn't, US merchants don't, nor does the US public. Come to think on it, nor does most of the rest of the world. Contrary to the opinion of some, Fed notes are still a premiere currency. It is to the benefit of nearly all that it stays that way.

[serf]

What caused the recession was the false credit prosperity that preceded it. That was caused by sustained below market interest rates which created a boom in credit which ballooned assets like houses, other luxury items, autos, and stocks. The only one that sets interest rate policy is the central bank, our Federal Reserve.
The recession is a correction of prior excesses. Trying to stop it from correcting only lengthens it. Bush tried that, then Obama. No doubt McCain would have done likewise.
Both political parties worship at the altar of the central bank, because both are spending beyond our means and need to inflate away our unpayable debts.
Artificially low interest rates for any sustained period will spur the banking industry to create inflation via fractional reserve banking as everyone makes money by staying fully loaned out. Hence the policy at the peak of lending to anyone who could fog a mirror. Both parties did it and both erred in preventing it from correcting. Now we engaging in reflation - and via overt fraud, the monetization of our own debts.
Anyone thinks the Big One was avoided should think twice.

[American Rage]

I don't think that tracks right.

First 78 years ago we were hardly a superpower. Just think of all the progress we have made in that time.

Second, I don't think anyone wants us on a world currency. The US bankers don't, the federal government doesn't, US merchants don't, nor does the US public. Come to think on it, nor does most of the rest of the world. Contrary to the opinion of some, Fed notes are still a premiere currency. It is to the benefit of nearly all that it stays that way.

1st. America was recognized as a world power at the time of the civil war. You don't put that many men on the battlefield and not be a world power. WWI confirmed this. The socialists really took over with the New Deal. They were in power throughout WWII. Who was America's representative at the foundation of the UN? A man named Alger Hiss. Mr. Hiss was our representative to the founding of the UN. Mr. Hiss was a "fellow traveler" which meant a secret communist. The UN was in fact founded as a communist global government.

2nd. They won't be premium for much longer. And when they turn to toilet paper, millions of Americans will beg to be saved from economic ruin. The answer? A buy out. Deals will be made. Government agencies and even businesses will be created to handle the tsunami of debt. In the end, we will all trade in our greenbacks for a global buck at a ratio that most can understand, i.e. for every 10 dollars turned in, you get a global dollar. Look for them to put all sorts of taxes on homes and anything to do with fossil fuels. They will "necessarily skyrocket" in the words of our president. That's when you'll know how fucked this country really is, regardless of who is in power.


Rage

[Kadmos]

Rage,

The Yugoslav Wars probably involved as many people as the Civil war, and it's tough to think of them as a superpower.

Yes we entered the true world stage during WWI, but we were hardly a "superpower".

As much as we like to think we ended WWI, you gotta remember everyone else had been fighting for years, what we had was fresh troops and lots of them, we didn't bring much more to the table than lots of warm bodies.

Not to run us down, just saying.

Sure WWII really saw us start to shine, but whats been built here afterward are the real changes. A massive highway system, real air travel, major infrastructure in just about every way.

On point two, that's the same story that people have been saying since we first started making paper money during the Civil war. We have NEVER re-monetized since then. A dollar bill from the civil war still has a face value of $1.

That is a pretty amazing thing, something nearly no other country can claim. Even England re-monetized going to the base 10 system.

Not just that but after all this time we are still making pennies

Although to be fair they cost more to make and ship out than they are worth

Eventually we probably will need to re-monetize, just about everyone else has, yes it will be sad, but there is no reason that it would mean the end of the dollar. Countries do it all the time and still continue to grow.

[Warthogg]

Pretty much every country in the EU (and the UK) had/has to some degree the same problems that we do. So did/does Japan. We're just bigger.

It drums down to balance of trade- it was/is completely unbalanced.

If I were a Chinese I'd be pretty pissed right now. OTOH I should have known better than to keep lending money to people who were sharing in the profits of my country's labor.

Think about it- the US takes out a loan from China, gives Apple a tax break so they can design I-Phones that are made in China then takes half or more of the profit and then turns around and asks the US for another tax break.

Heap snowballing entitlement spending on that and viola- Global Economic Model 1.0 (GEM 1) is a total failure. Start over.


So did/does Japan

Yup

Japan continues to DEFLATE. A year ago I feared the US was also on that track.. Maybe, just maybe, we will not be struck by the deflation train in this cycle.

[matshock]

Yup

Japan continues to DEFLATE. A year ago I feared the US was also on that track.. Maybe, just maybe, we will not be struck by the deflation train in this cycle.

Kind of- Japan is coming off of a fresh cycle of hyperinflation in the late 90's though. Ours was in the 70's.

The houseing market has obviously already deflated here, IMO the consumer market started to deflate 6 months ago but no one with a large audience will admit it.

It's hard to tell what will happen- there are only 3 basic options:

1. Default, depression, reconstruction

2. Hyperinflation and then face the same problems again in 10 years (your Japan scenario)

3. by some miracle a succession to entitlement inflation, spending, institution of long-term debt payment and a government willing to impose law & order against the welfare state

IMO 2 is the most likely because even with some new blood coming in, congress is still deep in personal debt and hyperinflation keeps them in power for a while longer.

[Warthogg]

Kind of- Japan is coming off of a fresh cycle of hyperinflation in the late 90's though. Ours was in the 70's.

The houseing market has obviously already deflated here, IMO the consumer market started to deflate 6 months ago but no one with a large audience will admit it.

It's hard to tell what will happen- there are only 3 basic options:

1. Default, depression, reconstruction

2. Hyperinflation and then face the same problems again in 10 years (your Japan scenario)

3. by some miracle a succession to entitlement inflation, spending, institution of long-term debt payment and a government willing to impose law & order against the welfare state

IMO 2 is the most likely because even with some new blood coming in, congress is still deep in personal debt and hyperinflation keeps them in power for a while longer.



Hyperinflation

China agrees with you. China believes they are PORKED. China believes we - the US - will inflate the dollar and repay their debt in increasingly worthless currency.

We gonna see......

[Warthogg]

Mr. Roubini is the economist I listen to most. He called this recesion about one year ahead of anyone else.

Roubini costs about $3,000 per year to be a subscriber but he also puts out a decent amount of information free.