Some people have caught on to the new government approach to economic stimulation. If you have a credit card, you can still borrow, courtesy of the banks and the Federal Reserve. This is spending to stimulate the economy. I know people who have over 100K in credit card debt.
If you can’t pay off the principal on your credit card and it is way beyond being absurd; why not add more on to it, until they cut you off? It’s not like you have to work for what you’re buying. Be happy and consume. If you are broke, max out the card. Get what you can while you can. Plus if you are over 65 you get a bonus, you don’t need to file for bankruptcy. What wages can they garnish if you don’t work? Give your kids everything they’ve always wanted.
Somehow I don’t think that this concept of maxing out credit cards, has been appreciated for what it is, by the credit card companies. Unsecured debt is free money. Tarp funds are letting a very large credit card bubble grow even bigger. If the banks all got together and sorted accounts by address. They would realize that 15 different cards at one location, doesn’t indicate the residence is an apartment complex. It might indicate things are a not quite as they appear.
Unemployed? Start your own business. Buy a color Xerox laser printer and some linen paper and print up a couple of thousand 20 dollar bills. Let’s lend a hand, and help our government get this money printed. If we could get the unemployed set up to print dollars, we could be out of this mess by Christmas(Employment suggestions are for entertainment purposes only, talk to your probation officer for employment advice).
Poor old Barney Madoff has been put in jail for using creative Congressional financing practices. Congress is mad as hell. He spent a lot of that “rich people” money that they were going to tax. They are going to put him away for 150 years. That seems a little steep for impersonating a Congressman. There is a difference though, when Barney ran out of money, he went to jail. In our case Congress still has a check book, so we can’t be broke.
Below is 4 years of pictures from the past.
The Democrats with this "Cliff thing" are clueless. The Republicans know what will happen to our savings if Obama isn't stopped. The billionaire will end up just as broke as the guy sleeping in the park. The middle class will be destroyed. Our retirement savings will be wiped out. It's kind of a Grimm Fairy Tale with a bad ending for everyone. Of course, it couldn't happen here, could it?
13 comments:
You still don't understand......
Nearly all the TARP money has been paid back....TARP can already be judged a brilliant, yes brilliant, program.
Credit card debt? More complicated. Overall, there is a time to borrow and a time not to borrow.....plus, there is called the multiplier effect.....a person borrows to buy something and it results in others being employed, more profits and livelihoods helped, plus tax returns to the taxpayer.
That said, just a part of the way the economy works....for the individual, banks have tightened loaning standards, except for people who don't need loans......so,it figures credit card debt would be up and with unemployment still high, mostly good for the economy......for people who misuse and are hurt by it, that's why government help for the poor, etc is necessary and helps everyone, again, by the multiplier effect and a thing called morality.....which, incidentally, makes for a more prosperous result for everyone.
Dear Joseph
I'm not going to convince you whatever I say, but there are two things going on here.
Congress taxes and spends money and also borrows money if it doesn't have enough.
The US Treasury can arrange the financing of the loans by selling Treasury instruments. Normally an individual or a country buys these bonds. And that's OK.
Then we have the Federal Reserve that prints our currency.
Between the two entities, the Treasury sells a million dollar bond to the Federal Reserve and gets a million dollar entry to spend. On the books it's a zero sum game. Theoretically at any time, the Fed can call the bond and get it million back. In the meantime the Treasury takes this book keeping entry and issues checks with the funds. The national debt increases, but no actual money was borrowed.
Then in order to control interest rates on Treasury's, someone has to be a market in them. The less tradable they are, the more interest they will pay. In this case, in order to keep rates artificially low, ALL bonds presented have to be bought for almost face value by the Fed; otherwise interest rates would rise to find buyers.
On top of that, the Fed is now buying an additional 40 billion dollars a month of real estate loans. This helps maintain the low interest since no one is buying the paper at these ridiculously low rates.
Technically I consider what the Fed and Treasury are doing as illegal and immoral. The people who saved for retirement counting the interest rates to keep them going are being ripped off to save a bunch of homeowners that never deserved to own a home.
The Federal government cannot pay the interest on the national debt if interest rates were to rise to 8.5 percent. Technically we are broke. So this issuing of bond and buying by the Federal Reserve has to continue, to keep the ball rolling.
So what you are looking at in Congress are a bunch of Tea Party reps that understand what is going on, and are going to fight to keep from increasing the national debt level.
We need to stop the Federal Reserve and the Treasury from doing the same thing Germany did in the 1920's. They trashed their currency.
What we are dealing with in Congress are a bunch of people saying "if it ain't broke, don't fix it." I don't have the time to wait until it's broke.
I'm not going to convince you whatever I say<<<<<<<
That's true, but also true about others.....I have ALWAYS relied on myself for major decisions.
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Technically I consider what the Fed and Treasury are doing as illegal and immoral<<<<<
Illegal? Nonsense. Please document laws which have been violated.
Immoral? Morals are personal.
As for what they are doing, it has been effective 1) Housing is needed to lead a recovery from a recession...proof of the Fed's effectiveness on this is that Housing is now up and doing well. 2) US corporations are now the most flush and profitable in history.....another key component for an economic recovery, and proof that what the Fed has done has not harmed corporations, and helped in capital formation.
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a bunch of Tea Party reps that understand what is going on<<<<<<<
Understand? Nonsense. They are clueless. Elsewhere in the world where austerity has been used during this mess has just made matters worse and delayed recoveries. This was pretty much the same thinking which handcuffed FDR and brought on the second drop during the Great Depression and ended up delaying the recovery. On the good side, wise ones in our government have learned from that. However, now that the economic recovery is now likely self-sustaining, it is an appropriate time to put in place some major long-term debt reduction plans, which are almost certain to happen....either Bush tax cuts end and sequestration happens automatically or some compromise....either way is fine. The risks for major inflation during the next couple of years is low, as major assets are still undervalued, like homes and stock prices......neither is even close to bubble territory....so for now, debt has a place to go without inflating the economy.
Hi Joseph
I think you need to cross me off of your list of blogs to read.
You haven't really read anything that I have written.
Here is an excerpt from my last blog:
"The Democrats with this "Cliff thing" are clueless. The Republicans know what will happen to our savings if Obama isn't stopped. The billionaire will end up just as broke as the guy sleeping in the park. The middle class will be destroyed. Our retirement savings will be wiped out."
If you can't see that the government has messed up bad,
I would suggest you find a blog that shares your views. Thank you for your comments, but don't wear out your welcome here.
I skim what you write, enough to understand what your thinking is and I do like to track it over time......I like to hear all sides on issues......my thinking is always open (heck, I'm a private investor, I want to do well and so am always challenging my thoughts and part of that is knowing what other thoughts are around) - I came up with behavioral economics long before it became popular and also see things like behavioral math, behavioral everything, where people are involved - psychology.....I look at facts and compare them with what thoughts are. If I annoy you, I don't want to do that, so if you want me invisible I will honor that.
On the "fiscal cliff," believe it or not, sooner or later I think things will work out OK.....these arguments between the Right and Left have their roots with Jefferson and Hamilton, even before.....maybe that is even our strength.....there was a civil war while Britain was able to end slavery w/o war......but, we ended up more successful on most things compared with the British.....as for your thinking about the middle-class and retirement savings will be wiped out, I do know my net worth has grown over my whole life, including during this financial mess and I AM middle class......and I do see great investment opportunities NOW.....in many ways the little guy has advantages the wealthy don't, even now, especially now.....life is complex, yet also simple....that's life, that's people.
Hi Joseph
Your last remarks were well written and I must admit a good read.
This time,I didn't feel like a student being admonished by his teacher.
What we are viewing here is a puzzle with more than one way for the pieces to be put together. We can both be right, but not at the same time.
I've got no problem with people that want to express an opinion different than mine, its phrases like "you don't understand" or the word "nonsense" when reviewing my opinions, that hits a nerve.
Part of the problem in the country today is one of perception. We see what we want to see. Reality is when you get the divorce.
Keep commenting if you want, I just try to keep the commenting from taking on a personal nature.
To steal a quote from Alan Greenspan, I'm often wrong but never in doubt.
If Joseph would tone down his admonishments he would make a fine addition to this blog. I like his thoughts, just not the conveyance. I hope he stays.
Remember those wing nuts that tried to turn this blog into a revolutionary site a while back? I am very glad those militants found their way to the exit. I helped them find the door, as I recall.
Hi Anon 10:39
What some people don't understand or comprehend about the comments section, is that it is a place to disagree to a point. But really we are joined together as a think tank on what can happen next.
Joseph's last blurb, tends to reinforce my belief that discussions enlightens us. We don't have to all agree, but we need to be heard.
Thank you for your comments.
The Republicans know what will happen to our savings if Obama isn't stopped. <<<<<<
And, what is that? They've been all wrong so far....the budget was balanced and national debt on the road to being paid off in 10 years, when Clinton left office. Then, the GOP took over, and disaster, until Obama came into office and the Great Recession stopped receding. Those are FACTS.....I like facts.
I have been a lifelong student of great minds and Obama's mind, although still too early to conclude, so far is truly remarkable. Necessary for a great mind is ability to change as situations change, that is, being adaptable, and he does that with such poise, testimony to his outstanding emotional make-up.
He has already shown a deft legal mind, being president, the first Black one, of the Harvard Law Review. What distinguishes top legal minds is the ability to understand all sides of issues and figure out a way to react. Ambulance chasers and other mediocre or lesser lawyers rarely have such an ability.
Hi Joseph
If you examine presidents in power, being a Republican or Democrat has just about nothing to do with policy put in place by Congress.
Bill Clinton had a Republican Congress for both terms. You want to give him credit for what the Congress accomplished??? I think not!
Let's let history judge Obama, I'm still laughing over a Nobel peace prize for accomplishing absolutely nothing. This guy has pretty much said "My way or the highway." It's going to take the Supreme Court to set him straight.
After the way he snuck his health care bill through Congress, he has no leverage left. Congress knows a piker and will deal with him accordingly.--Translated, he's screwed.
If you examine presidents in power, being a Republican or Democrat has just about nothing to do with policy put in place by Congress.
Bill Clinton had a Republican Congress for both terms. You want to give him credit for what the Congress accomplished???<<<<<
Sorry, it isn't just Congress.
Treasury Secretary is also a big part, economically and FED CHAIRMAN, SEC CHAIRMAN, etc, etc......and the president IS who the WHOLE nation elected to ADMINISTER (EXECUTE)the laws in the CO-EQUAL way our gov't was set up in the CONSTITUTION....with the LEGISLATURE, and JUSTICE (Clinton had TWO SUPREME COURT appointments (Ginsberg and Breyer), plus ALL appointments to different judges and other positions (FBI, etc, not to mention the ATTORNEY GENERAL......the BUSH administration INTENTIONALLY downplayed regulation of the financial industry because of his free market ideology and crony capitalism - if you want details, I can provide them.....and if I had to name just one person who was most responsible (of many involved) for the financial meltdown was CHRISTOPHER COX, Bush's SEC Chairman......SEC is most responsible for ADMINISTERING the financial concoctions (credit default swaps, SIVs, financial derivatives, CDO's, tranches of CDO's, etc, etc, etc sold all over the world and affecting the global economy.
Plus, when Clinton first took office, since because of Perot he wasn't even elected with a majority, he immediately met with Greenspan and Rubin to bring down interest rates and strengthen the bond market.....plus his main campaign message was "It's the economy, stupid.".....heck, even the GOP during this recent presidential campaign was saying how good Clinton was regarding the economy. Clinton "triangulated" the GOP Congress, plus negotiated in a way which allowed him to govern.....Clinton was a master politician, maybe the best ever....he did leave office with the highest approval record of any outgoing president.....Obama is different, but has even more potential than Clinton, in my opinion....I think he can be a transformational president....time will tell.
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Yes, it is too early to judge Obama. However, I would argue that the reason he won the Nobel Peace Prize is because the world looked to him to affect the world, specifically because he campaigned on ending the IRAQ War and had been against it from its inception (unlike Hillary or McCain.
AS for Obamacare, if you think "snuck" is the word to use then the GOP House was pretty stupid to allow such an important piece of legislation through. Anyway, it wasn't "snuck." It occupied headlines for over a year, plus tons of lawsuits and most importantly, the CONSERVATIVE Supreme Court chief justice, Roberts. Plus, the entire plan was modeled after Romney's healthcare in MA which Romney, himself had recommended for the nation before he began running for pres.
That said, the GOP is screaming about JOBS, JOBS, JOBS and the really important thing is it will require more doctors, nurses, etc, etc and more educators to teach them...at precisely the right time with so many unemployed or unemployed and new HS and college grads AND military coming home from wars, GI benefits which can help pay for the education, etc. Plus, it will allow corporations to concentrate on performance, rather than a workers need of healthcare (large family, age, etc).
Hi Joseph
I stand by what I said. Congress writes the laws. Its a group effort of give and get.
All spending bills have to originate in the House. Lets see how Obama does when he needs money to fund his health care. IMHO he has a payback coming big time.
You can pass any law, its the funding that becomes a problem later on. Social programs are currently consuming most of our budget. I think that the Republicans are more aware of the long term cost issues. Whereas the Democrats figure, try it and see if it can be made to work. There is no right or wrong here, but I kind of hear the whisper of "I want it now."
Congress writes the laws<<<<<
Even Boehner and other GOP congressional leaders constantly say they are looking to the president to LEAD Congress....he has....you call it "snuck" and worse......I do worry he could be assassinated.
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