Germ, I would like to point out a few things to you abotu the Clinton Taxes of 96. http://www.taxfoundation.org/blog/show/22958.html Start there. Next I want to point out that tax cutting doesn't cause a recession. Spending at the state and federal level causes a recession. Lowering taxes allows more money to be invested back in the the free market. Read this. http://www.investopedia.com/terms/l/laffercurve.asp The Laffer Curve is a formula to figure out the proper rate of taxation based on spending. In no way shape or form does additional taxation during a recession save the economy. In no way shape or form does additional spending during a recession save the economy. Putting into place regulations that hurt business in no was helps the economy. Need I say more. The point that I'm trying to get to is the fact that NOTHING that this administation is trying to pass is going to help the economy. This fake drilling bill, Cap and Tax, Carbon Taxes, please research what he is trying to do and you'll see what I'm talking about. I made it through 800 pages of the Health Care Bill and in now way does it help it only hurts.
April 4, 2010 Op-Ed Contributor I Saw the Crisis Coming. Why Didn’t the Fed? By MICHAEL J. BURRY Cupertino, Calif. ALAN GREENSPAN, the former chairman of the Federal Reserve, proclaimed last month that no one could have predicted the housing bubble. “Everybody missed it,” he said, “academia, the Federal Reserve, all regulators.” But that is not how I remember it. Back in 2005 and 2006, I argued as forcefully as I could, in letters to clients of my investment firm, Scion Capital, that the mortgage market would melt down in the second half of 2007, causing substantial damage to the economy. My prediction was based on my research into the residential mortgage market and mortgage-backed securities. After studying the regulatory filings related to those securities, I waited for the lenders to offer the most risky mortgages conceivable to the least qualified buyers. I knew that would mark the beginning of the end of the housing bubble; it would mean that prices had risen — with the expansion of easy mortgage lending — as high as they could go. I had begun to worry about the housing market back in 2003, when lenders first resurrected interest-only mortgages, loosening their credit standards to generate a greater volume of loans. Throughout 2004, I had watched as these mortgages were offered to more and more subprime borrowers — those with the weakest credit. The lenders generally then sold these risky loans to Wall Street to be packaged into mortgage-backed securities, thus passing along most of the risk. Increasingly, lenders concerned themselves more with the quantity of mortgages they sold than with their quality. Meanwhile, home buyers, convinced by recent history that real estate prices would always rise, readily signed onto whatever mortgage would get them the biggest house. The incentive for fraud was great: the F.B.I. reported that its mortgage fraud caseload increased fivefold from 2001 to 2004. At the same time, I also watched how ratings agencies vouched for subprime mortgage-backed securities. To me, these agencies seemed not to be paying much attention. By mid-2005, I had so much confidence in my analysis that I staked my reputation on it. That is, I purchased credit default swaps — a type of insurance — on billions of dollars worth of both subprime mortgage-backed securities and the bonds of many of the financial companies that would be devastated when the real estate bubble burst. As the value of the bonds fell, the value of the credit default swaps would rise. Our swaps covered many of the firms that failed or nearly failed, including the insurer American International Group and the mortgage lenders Fannie Mae and Freddie Mac. I entered these trades carefully. Suspecting that my Wall Street counterparties might not be able or willing to pay up when the time came, I used six counterparties to minimize my exposure to any one of them. I also specifically avoided using Lehman Brothers and Bear Stearns as counterparties, as I viewed both to be mortally exposed to the crisis I foresaw. What’s more, I demanded daily collateral settlement — if positions moved in our favor, I wanted cash posted to our account the next day. This was something I knew that Goldman Sachs and other derivatives dealers did not demand of AAA-rated A.I.G. I believed that the collapse of the subprime mortgage market would ultimately lead to huge failures among the largest financial institutions. But at the time almost no one else thought these trades would work out in my favor. During 2007, under constant pressure from my investors, I liquidated most of our credit default swaps at a substantial profit. By early 2008, I feared the effects of government intervention and exited all our remaining credit default positions — by auctioning them to the many Wall Street banks that were themselves by then desperate to buy protection against default. This was well in advance of the government bailouts. Because I had been operating in the face of strong opposition from both my investors and the Wall Street community, it took everything I had to see these trades through to completion. Disheartened on many fronts, I shut down Scion Capital in 2008. Since then, I have often wondered why nobody in Washington showed any interest in hearing exactly how I arrived at my conclusions that the housing bubble would burst when it did and that it could cripple the big financial institutions. A week ago I learned the answer when Al Hunt of Bloomberg Television, who had read Michael Lewis’s book, “The Big Short,” which includes the story of my predictions, asked Mr. Greenspan directly. The former Fed chairman responded that my insights had been a “statistical illusion.” Perhaps, he suggested, I was just a supremely lucky flipper of coins. Mr. Greenspan said that he sat through innumerable meetings at the Fed with crack economists, and not one of them warned of the problems that were to come. By Mr. Greenspan’s logic, anyone who might have foreseen the housing bubble would have been invited into the ivory tower, so if all those who were there did not hear it, then no one could have said it. As a nation, we cannot afford to live with Mr. Greenspan’s way of thinking. The truth is, he should have seen what was coming and offered a sober, apolitical warning. Everyone would have listened; when he talked about the economy, the world hung on every single word. Unfortunately, he did not give good advice. In February 2004, a few months before the Fed formally ended a remarkable streak of interest-rate cuts, Mr. Greenspan told Americans that they would be missing out if they failed to take advantage of cost-saving adjustable-rate mortgages. And he suggested to the banks that “American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage.” Within a year lenders made interest-only adjustable-rate mortgages readily available to subprime borrowers. And within 18 months lenders offered subprime borrowers so-called pay-option adjustable-rate mortgages, which allowed borrowers to make partial monthly payments and have the remainder added to the loan balance (much like payments on a credit card). Observing these trends in April 2005, Mr. Greenspan trumpeted the expansion of the subprime mortgage market. “Where once more-marginal applicants would simply have been denied credit,” he said, “lenders are now able to quite efficiently judge the risk posed by individual applicants and to price that risk appropriately.” Yet the tide was about to turn. By December 2005, subprime mortgages that had been issued just six months earlier were already showing atypically high delinquency rates. (It’s worth noting that even though most of these mortgages had a low two-year teaser rate, the borrowers still had early difficulty making payments.) The market for subprime mortgages and the derivatives thereof would not begin its spectacular collapse until roughly two years after Mr. Greenspan’s speech. But the signs were all there in 2005, when a bursting of the bubble would have had far less dire consequences, and when the government could have acted to minimize the fallout. Instead, our leaders in Washington either willfully or ignorantly aided and abetted the bubble. And even when the full extent of the financial crisis became painfully clear early in 2007, the Federal Reserve chairman, the Treasury secretary, the president and senior members of Congress repeatedly underestimated the severity of the problem, ultimately leaving themselves with only one policy tool — the epic and unfair taxpayer-financed bailouts. Now, in exchange for that extra year or two of consumer bliss we all enjoyed, our children and our children’s children will suffer terrible financial consequences. It did not have to be this way. And at this point there is no reason to reflexively dismiss the analysis of those who foresaw the crisis. Mr. Greenspan should use his substantial intellect and unsurpassed knowledge of government to ascertain and explain exactly how he and other officials missed the boat. If the mistakes were properly outlined, that might both inform Congress’s efforts to improve financial regulation and help keep future Fed chairmen from making the same errors again. Michael J. Burry ran the hedge fund Scion Capital from 2000 until 2008.
Was it 2001-2002? Yes after 7 staright years of growth we had a slight dip. If I recall W cut taxes and pulled us out, now if he only would have cut spending Then begin another time of growth 2002-2007, followed by the sub-prime loan mess, which started in 1999 when Republican Congress and Slick Willie past Community Reinvestment Act. Somewhere there is an article a guy wrote right after the passage where he called it, he knew exactly what would happen. As an independent/conservative voter these are my choices Democrats Who spend(more than they have) and tax Replicans Who spend(more than they have) and cut taxes 2001-March through Nov. Where do you guys come up with this stuff? Rec in 1999, LOL
I am pretty sure that the previous Democrat started the housing mess: The beginning of the mortgage mess came from the Carter era, and it was with Fannie Mae and the push to get more people, especially those that were of the lowest income earners into homes. Did Reagan do anything to change the Carter mess? No and neither did Bush Sr. But then came along Clinton and that program was extended to allow Fannie Mae and the relatively new Freddie Mac to use certain types of "income" if you will to be used when financing a home. This would allow more people into homes that otherwise would not be allowed to or could not finance a home. Then George W. is elected and for a few years it appears as if nothing will change. Then in 2003 members of his cabinet along with a few senators made this known and tried to point out that some thing should be done, however that was in 2003, and much too late. By that time hundreds of thousands of homes were sold to those that could not afford them. Add that to the way that these loans were bundled and sold, without any real value because so many were sold with "no money down" or were greater than the value of the home. Yes, this was coupled that too many homes were for sale than there were buyers. Then add the rest of the economic mess, and.... But, the housing mess began with Carter, and extended with Clinton. And on the note of taxes - proof is in the history, tax cuts result in more money for consumers (who are the real drivers of the economy, not the businesses or the government) and for businesses to invest in capital investments and for innovation and for employees. Takes have the same effect as minimum wage, a reduction in the workforce. Here is another article explaining the actual effects of tax increases (regardless of the party) and the real effects of tax cuts. http://www.house.gov/jec/growth/taxpol/taxpol.htm
U.S. Economy: The Case for More Stimulus The worst thing about the uptick in hiring? It could undermine a second wave of federal spending that may be needed to stave off a double-dip recession By Peter Coy President Barack Obama would have been forgiven a few high-fives on Apr. 2 after the Labor Dept. announced the U.S. economy generated 162,000 jobs in March. Instead he was cautious. At a speech in Charlotte, N.C., Obama did say, "We are beginning to turn the corner," then added that the job numbers "leave us with a lot more work to do." Chief economic adviser Christina Romer was even more circumspect, issuing a statement that said, "the American labor market remains severely distressed." And over the weekend, National Economic Council Director Larry Summers drove the point home on CNN, saying, "We've got a long way to go." It's not modesty, false or otherwise, that's making the Obama Administration so reticent. It's reality. With 10 million Americans out of work, Obama's team knows that the employment growth in March (a quarter of which was driven by the hiring of federal Census workers) actually makes its mission over the next year or two more difficult. Here's why: The positive jobs report reduces the political urgency for fixing the U.S. economy. If voters and lawmakers decide the economy is healing on its own, it becomes harder to justify more infrastructure spending, aid to stressed states, extended unemployment insurance, and the like. Even before the report, the Administration had begun to focus on smallish fixes like the $14 billion HIRE Act, which encourages hiring of the unemployed, and new measures to discourage foreclosures. "Stimulus has become a dirty word in Washington," says Augustine Faucher, macroeconomics director of Moody's Economy.com (MCO). That's understandable, but it could be a problem if the economy begins to sputter. The nonpartisan Congressional Budget Office estimates that as of the end of 2009, last year's $787 billion stimulus package had created 1.4 million to 3 million full-time-equivalent jobs that wouldn't have existed otherwise. In other words, the recession would have been even worse without it. Now that stimulus is going away; by September, 70% of the funds will have been spent, the government estimates. While most forecasters see gross domestic product growth of 3% this year and next under current policy, there remains a risk that without more support, the U.S. economy will sink into Japanese-style torpor. David Rosenberg, chief economist of investment manager Gluskin Sheff + Associates in Toronto, predicts U.S. growth will slow from 3% this year to 2% in 2011 and just 1% in 2012. He sees a 35% chance of a relapse into recession at some point. Says Mizuho Securities USA Chief Economist Steven Ricchiuto: "Since the [March] payroll data came out the growth optimists are taking a victory lap. But the risk of a double dip remains significant." All this puts the Obama Administration in a tricky spot. The President wants to continue priming the pump, at more modest levels. The 2011 budget requests $266 billion to fight the slump—$166 billion for extended unemployment insurance, more aid to states and localities, etc., and the rest for targeted jobs programs. "We are very much of the mindset that more needs to be done," says Jared Bernstein, Vice-President Joe Biden's chief economic adviser. Yet Obama also wants to reassure voters and the markets that he's serious about deficit reduction. That's the purpose of the new deficit commission and the scattered tax hikes in the 2011 budget. There's a risk of coming down in the muddy middle and achieving neither goal. The conservative Orange County Register editorialized in February that in conveying his dual message, Obama sounds like the young St. Augustine, who prayed: "Give me chastity and continence, but not yet." As a student of the Great Depression, Christina Romer studied what happened in 1937-38, when ill-conceived fiscal and monetary contraction killed a fairly strong recovery, sending the economy back into a slump that didn't end until World War II. As the current recovery begins, Romer says she continues to worry whether private demand will come back strongly enough as federal spending falls. "We are on track for normal trend growth, but we need much more than that. When you're down so much in jobs, you need a period of very rapid job creation," she said in an Apr. 6 interview. You don't have to go back to the 1930s to find a nightmare scenario for the American economy. In 1997, Japan was gradually beginning to recover from a downturn that began with the popping of a huge real estate bubble in 1990. Then deficit hawks pushed through an increase in consumption taxes equal to 2% of the nation's GDP. Output, which had been growing, abruptly shrank. Unemployment began to rise. The downturn caused the Japanese people to lose confidence in their government's ability to restore growth. More than two decades later, the funk in Japan still lingers. "After 1997 it was like a funeral in Japan," says Richard C. Koo, chief economist of Nomura Research Institute. "Once people start feeling there is no cure, you're in trouble." Japan suffered for so long because it failed to find a new source of economic growth. Twenty-eight months after the U.S. recession began, in December 2007, and most of a year after it probably ended, the U.S. may be in a similar fix. No single engine has emerged to pull along the $14 trillion economy—not consumer spending, not business investment, not exports. Clean-energy apostles argue that the transition to a green economy could become the driver, but the Senate seems unwilling to impose a price on carbon emissions, the necessary trigger for massive private investments in alternative energy.
Despite the welcome return to growth and the sunny economic reports of recent days, the outlook remains uncertain. The March jobs report contained the worrisome news that average hourly earnings fell by 0.1% from February, a rare decline, leaving them up just 1.8% from a year earlier. Workers have scant bargaining power. The housing bust left them feeling poor, while near-10% unemployment has them fearing for their jobs. Bankruptcy filings were up 23% in March, to nearly 150,000, from a year earlier. The Conference Board's measure of consumer confidence is as low as it was in the dark days of September 2008, after the collapse of Lehman Brothers. Yes, personal consumption has been rising, but it has been propped up by a drop in the personal savings rate (from 6.4% to 3.1% over the 10 months through February), and the savings rate can't keep falling forever. Consumers want to be more thrifty, not less, so "households will not be able to continue to spend at this rate in the coming quarters," Capital Economics' U.S. economist Paul Dales wrote on Mar. 29. You would think businesses could lead the economy because they are flush with cash to invest and hire. (Nonfinancial U.S. corporations held $1.8 trillion in liquid assets at the end of 2009, according to investment firm AllianceBernstein.) They aren't doing so because they still have excess capacity and they don't see enough demand from consumers, who remain cautious because they fear for their jobs. A mini-boom in capital spending late last year is already fading. For the medium term, "we're basically in a structural slump," Edmund Phelps, the Nobel Prize-winning economist at Columbia University, told Bloomberg Television on Apr. 2. Obama is pinning some of his hopes for growth on trade, vowing that the country will double exports in five years. That requires trading partners to play along by growing robustly and buying more American products. Instead, China and India have raised rates since last year to stave off inflation. Southern European nations are cutting government spending and raising taxes. Many trading partners, from Britain to Germany, intend to pump up their economies via exports. What's left, then, to accelerate growth? Government. The Keynesian prescription for a prolonged, economywide shortfall of demand is to spend money to get the economy functioning. The idea is that priming the pump now will yield lots more GDP growth (and tax revenue) in the future. Stimulus can be a long-term money-saver. John Maynard Keynes may stand right next to Karl Marx in the eyes of Tea Party activists, but there's a long history of Keynesian stimulus by both Democratic and Republican Administrations. In 2008, President George W. Bush pushed for and achieved a $152 billion stimulus package that he described as a "booster shot" for the economy. True, Obama has less spending leeway than Bush had. According to the White House's Office of Management & Budget, gross federal debt will reach 94% of GDP this fiscal year, up from 69% in 2008. Research by economists Carmen I. Reinhart of the University of Maryland and Kenneth Rogoff of Harvard University shows that growth slows in advanced economies when their ratio of gross debt to GDP exceeds 90%. Citing numbers like that, Republican economists say it would be a mistake to spend any more now on juicing the economy. Douglas J. Holtz-Eakin, an economist who advised Republican Senator John McCain's Presidential campaign in 2008, predicts that "we'll begin to see fairly steady job creation" by summer. "I think it's terrible advice to a Congress to put off getting its fiscal house in order." Holtz-Eakin is right that the federal debt will be a huge problem over the next decade and beyond. But trimming back on recession-fighting remedies won't solve it. The deficit is growing primarily because of ballooning expenses for entitlement programs such as Social Security and Medicare, as well as national defense. Obama's budget office estimates that even at the peak of stimulus spending this year, more than 70% of the federal deficit is accounted for by noncyclical factors—i.e., fundamental imbalances. The good news is that the deficit is more of a long-term threat (albeit an enormous one) than a present danger. The yield on 10-year Treasury bonds remains below 4%, vs. over 8% in 1990. Inflation, likewise, is a remote concern: Prices for personal consumption expenditures rose just 1.8% over the past year through February. And there's reason to be encouraged about America's debt-paying capacity over the short term: The increase in the national debt has been slowing. Since 2006, increased federal borrowing has been partially offset by more savings by households and businesses (although households have been less frugal recently). As a result, overall national savings have fallen less than the big federal deficits might lead one to expect. That's a good thing. Another factor that's taking the pressure off U.S. financing needs is that national investment has declined in the economic downturn. When there's less investment, there's less need for savings to finance it. The result is that the U.S. is importing less savings from abroad. Net national borrowing fell by nearly half between 2006 and 2009, Federal Reserve figures show. Contrary to popular perceptions, then, Obama may have some fiscal elbow room for measures to boost the economy over the next few years. It will need to do so, argues Nomura's Koo. "If the government refuses to borrow money to compensate for the private-sector pullback, this economy will start contracting in a deflationary spiral". The Obama Administration might have an easier time selling stimulus if it could convince Americans that the money is doing what it's supposed to. That hasn't always been the case. Tax cuts, which constituted most of the Bush stimulus and one-third of the 2009 Obama plan, are especially ineffective in generating growth when there's lots of slack in the economy, according to analysis by macroeconomic forecasters such as IHS Global Insight, Macroeconomic Advisers, and Moody's Economy.com. Businesses won't hire an extra employee, even with a tax incentive, if there's no work to be done. Most consumers will save rather than spend a tax rebate if they can afford to do so and are intent on repairing their household balance sheets. For instance, Moody's Economy.com estimates that cutting corporate income taxes raises GDP for one year by only 30 cents for each $1 of tax cuts. Infrastructure spending may be the most underused tool to fight the slump. It offers lots of bang for the buck (a $1.58 rise in first-year GDP for every dollar spent, Moody's says). It benefits a sector—construction, mining, and energy—whose March unemployment rate was 24.6%. And it builds things that society needs anyway, like roads, levees, and sewer systems. It works slowly, but that's O.K. because the economy will have lots of spare capacity for years. Rosenberg, the bearish Gluskin Sheff economist, dislikes most stimulus measures but does support more infrastructure spending, in particular "totally revamping the energy grid." Says Rosenberg: "That's something you could really rally the population around." (When the Senate turns to energy legislation in the coming weeks, stimulus will be lurking in the pages of the bill.) Princeton University economist Alan Blinder imagines a million-person Works Project Administration that would clean parks, repair facilities, and so on. Right now any productive investment would help. Labor and capital are sitting idle because the private sector remains depressed. If Obama intervenes in a way that sustains the recovery, then it will surely be time for high-fives. With Roger Runningen
so maybe the celebration of the 'end of the recession' may be a bit premature... http://finance.yahoo.com/news/Mortg...2.html?x=0&sec=topStories&pos=6&asset=&ccode= Mortgage Defaults May Be Driving Consumer Spending On Monday April 12, 2010, 12:59 pm EDT Hate to be an "I told you so..." Lender Processing Services just put out its "Mortgage Monitor Report," and we have a new record: The nation's foreclosure inventories reached record highs. February's foreclosure rate of 3.31 percent represented a 51.1 percent year-over-year increase. The percentage of new problem loans also remains at a five-year high. The total number of non-current first-lien mortgages and REO properties is now more than 7.9 million loans. Furthermore, the percentage of new problem loans is also at its highest level in five years. More than 1.1 million loans that were current at the beginning of January 2010 were already at least 30 days delinquent or in foreclosure by February 2010 month-end. Okay, so 7.9 million Americans are not paying their mortgages. Are we really thinking about the implications of that? I've already reported studies that show Americans are now far more likely to pay their other bills first before their mortgage (which is a big turnaround historically speaking.) That means they pay off their credit cards, cable bills, car loans in place of their home loans. Some are forced to, while others are doing so strategically. Don't get me started again on strategic defaults... Paul Jackson, publisher of Housingwire.com, wrote a fascinating article last week that put this into real cash perspective. He cites an older stat of 7.4 million delinquent loans, but you'll get the picture. First he describes a case study of someone who applied for the government's Home Affordable Modification Program. The person had an $1,880.00 monthly mortgage payment on which they'd defaulted, but said person's monthly bank statement showed payments to a tanning salon, nail spa, liquor stores, DirecTV bill with premium charges, and $1,700.00 in retail purchases from The Gap, Old Navy, Home Depot, Sears, etc. Writes Jackson: Even if you assume that just half of the current 7.4 million currently delinquent mortgages fit this sort of 'spending profile' (that is, they are spending their mortgage) and you assume a $1,000 median monthly mortgage payment for most U.S. homeowners - you get a $3.7 billion boost per month to consumer spending. It's certainly enough spending to matter in the overall scheme of things. Other studies have shown that borrowers are more likely to default on loans if they have friends or neighbors who have. On top of that, the rate at which formerly current borrowers are defaulting now is rising. I guess it's just another, innovative way of using your home as your ATM. It currently takes well over a year, in some cases nearly two years, to go from missing a payment to being chucked out of your home. That's a lot of time to go shopping.
I don't think anyone is celebrating the end of the recession. I also don't think that a case study of one irresponsible person translates into assuming that 3.7 million mortgage defaulters are doing the same thing. Mighty big assumption based on the actions of one person.
anecdotal I know... but I've seen this exact behavior from 3 of my former neighbors over the past 2 years... defaulting on the mortgage?? COOL!!! quit payin it and buy a $2000 leather sofa, trade in the car before it hits our credit rating, buy the kids new video games, take lavish vacations (yes those are real examples from my neighborhood, we are friends with them and were disgusted by their behavior)... you are also making an assumption that because the article cites one example that this was the only one they saw... I'm sure that there is more than a nugget of truth to this, and I'm fairly confident that there was more research done on this than one case as they just cited one particular example...
http://www.housingwire.com/2010/04/05/for-consumers-time-to-shop-until-the-mortgage-drops/?wpmp_tp=1 Here's the actual article. It wasn't even a case study, he just says "Consider the following individual as a case study....". The whole article is based on broad assumptions about the spending habits of homeowners with mortgage trouble and then he assumes that not paying mortgages is why consumer spending is up. Using that logic you could also look at the anecdoatal evidence of spending by members of this forum. They are buying new vehicles, atv's, boats, bows, guns, etc. None of that stuff is small dollar and none of the members is being foreclosed or not paying their mortgage. Shoot, from all of the spending we can see being done on these items you could assume there is no recession :D . As in the article I posted earlier states, there has been an increase in hiring. This hiring isn't because people aren't spending money on their mortgages. It's because there have been some minor improvements. do you really thing that 3.7 million people (if that were even remotely true) spending their mortgages would cause a significant rise in consumer spending in a country of over 300 million?
It has to be those 3.7 million people:p I predict the same thing happeing as it in the 30's. As soon as Obama stops the goverment programs we will dip again. It appears GDP went up 1933, the President before I believe did nothing or cut taxes This Recession was way to deep IMO for the standard Tax cut line. That is what our last President did, he cut taxes, put in the worst education reform in the history of USA, and started a war. I voted for the SOB twice
just last week state of IL was reported to have 11.4% unemployment... up 1/10th from the previous month... things are not rosy out there, are they improving? maybe, I haven't seen anything that indicates a turn around other than a (imho) over inflated DJIA... we have a temporary influx of employed people and an uneven level of consumption that suggests 'pent up demand' (people waiting until the absolute last second to make purchases)... truly I hope we are in recovery at the moment, but my fear is that we haven't begun recovery yet but merely stopped falling and that we will have 'lateral' growth profile for a while until a real recovery begins... in the meantime it is prudent for me to continue paying off debt, delaying major purchases for an indefinite period, and being mindful of my "defensive" posture on my investments... I still have a distrust of the financial talking heads (ie. Jim Cramer and those like him) that helped all of us overheat the markets and, imho, contributed to the market crash... as I've said many many times, when the job market recovers, I'll jump on board with this recovery, right now I'm not seeing it and people in my industry are still waiting for a job after being laid off for 12+ months... talented guys with a fantastic resume'/experience... jobs are just tough to come by right now, unless you don't care to take a 50% cut in salary...
Brucelanthier/Germ, After reading the past few post I have a feeling that you both believe that the only way we can get out of the current economical situation is with the help of the Federal Government. I'm very afraid that this type of feeling is becoming the norm. The short term decline in the unemployment numbers come from the hiring of IRS employees for the Health Care Enforcement and Tax season. Question, who pays for Federal Employee's? What happeneds to these people when the IRS no longer needs these employee's when tax season is over? Why is it that the Fed needs to get involved for this problem to go away? Why can we not cut spending, cut taxes, GET OUT of health care and fix what is really the problem with Insurance, get out of the way of oil exploration in the US, look at the alt. power generation sources and let the private sector do what it needs to do so we, the USA, can get back to what we do best, invent, invest, and drive a better tomorrow for everybody. Just like we were doing a short 50 years ago. Too many things that made America, America has been deemed as "Evil" and now there is some sick feeling that we shouldn't be first in everything. That US Citizens need to be brought back down in size.
Well lets look at history shall we. From 1929 until 1933 the sitting administration did nothing, and it got way worse. I am not in favor of Goverment getting involved, but in the case of the Great depression and current situation I believe a level of Goverment involvement was called for, I also bellieve Obama and congress spent way to much on on their stimulas bill, and GW and the boys paid some banks to much coin in Tarp. We gave way to much leverage on the TARP funds. Yes the IRS is hiring right now and the Job are mostly temp Jobs, but do you think the guy who has been out of work for over a year cares at this point? After reading your post I feel you believe private business and corp America can solve this problem if left alone. IMO they cannot and have proven they cannot time and time again. For small busniess Obama has cut taxes, I work for a small company.
haha... for all the economic talk goin on here, you should know that businesses do not pay taxes... any tax levied against a business gets passed on to the consumer in the form of higher prices... the net effect is zero on businesses... to spur employment consumers need to be able to spend, when products cost more (ie. thru a regressive tax on business) or when more money is removed from consumers pockets there is a decrease in spending... its kind of a death spiral thing... we need jobs in order to spend, but we also need to be able to afford what we are spending our money on... one thing feeds the other... there are a million and one causes for the current recession, from lax lending practices, oil prices shooting up, over valued real estate, and over eager consumers spending themselves into oblivion tryin to keep up with the joneses... govt can't fix it over night and private industry can't either... it took us 15-20yrs to get here and the pain we are feeling now NEEDS to be felt, we need to clean our financial houses, both personally and collectively...
At the time I read this post you had posted only 40 times. I can say for sure the at least three of those times were the best posts on this forum. Guys, what built America to be the greatest industrialized nation in the world was NOT the Federal Government. It was not regulation by the government. It was not social programs. It was the private sector (business). It is the massive investment in capital resources, innovation and invention funded by the private sector. What drives the private sector? Consumers, with their buying habits and confidence. Taxing business or consumers to high only translates into reduced consumer confidence, which means less spending and reduced revenue for businesses. The Federal Government has no business dealing in this, and we are all better off financially when they do. We are all better off when the reduce taxes to the most most efficient part of the tax curve.
