I Helped Destroy The Economy.

[RJM 0]

I've watched, I've listened, and I've read. I know what caused the credit market failure because I was NECK DEEP in it's build-up and it's collapse. Yes, you can blame me for a part of it. I'll explain later.

 

Now we are at a stage where we are taking drastic measures to secure our future. Are we taking the right steps?

 

Yes. And No.

 

Yes: We are investing money that will create huge government-funded construction projects putting people to work as they are being built and employing future work to keep them up and running. This makes jobs. Yay Jobs! Let's all have a job orgy!

 

No: We are investing in projects that won't create a single dime for the economy. Why? Because building government buildings and creating government jobs does not create wealth. It takes tax money to keep them up and running. So we just secured nearly a TRILLION DOLLARS in future taxes, PLUS TRILLIONS MORE that it will take to run them in the future. Now we are looking at a possible additional stimulus bill that will cost us nearly as much. A trillion dollars equals $2700 for every citizen. Another trillion puts that at $5,400 per person. That's per person, not per TAX PAYER. So if you have a family of 4, you're looking at $21,600! This is on top of the 40% the government takes form you now.

 

Worse yet: The stimulus bill doesn't address what went wrong: Congress FORCED the banks to give loans that were doomed to fail.

 

-Home Mortgage Disclosure Act (Carter) (Required banks to report the race and gender of applicants on home loans, added a plethora of regulations, made loan applications look like War and Peace, with footnotes.)

-Community Reinvestment Act of 1977 (Carter) (Required banks to lend to disqualified borrowers if they were a minority race or had bad credit:

"to encourage depository institutions to help meet the credit needs of the communities in which they operate, including low- and moderate-income neighborhoods, consistent with safe and sound operations"

)

-Depository Institutions Deregulation Act 1980 (Carter) (Reduced the amount banks had to keep in the Reserve)

-Alternative Mortgage Transaction Parity Act of 1982 (Reagan) (Allowed banks more flexibility in lending... meh, had an effect.)

-Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (Clinton) (Made it so advocacy groups could influence lending practices.)

-1995 revision to the Community Reinvestment Act of 1977 (Clinton) (Heavily revised the act, making it so banks could take money from securities showing a false AAA rating (which regulators ignored in the name of "affordable housing", and forced more bad loans, without any stipulation that they still be able to operate at a profit.

 

According to Obama, the sole act that created the meltdown was the Gramm-Leach-Bliley Act which allowed banks to do insurance. WTF??? This makes banks MORE stable by diversifying!!! What are you talking about Mr. Obama??? It resulted in mergers between insurance companies, and banks. But I'm real interested in hearing Obama's theory on how those mergers caused these banks to go down.

 

Bush and the republican congress warned of a possible financial meltdown as a result of lending policy as early as 2003, but were voted down. Congress, namely the Democrats were in denial:

These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,

said Rep. Barney Frank, then ranking Democrat on the Financial Services Committee.

The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.

The war-time economy may have actually postponed the meltdown several years. Still today, about the only hiring industry is the defense industry. Oh, but wait... Obama's cutting defense spending as well!

 

So if I was the president, this is what the solution would be:

 

Stimulus Package would be primarily a reserve account for banks to draw from gradually over 3 years free of interest, for the purpose of purchasing bad equity from other banks that are in the can. This makes the stronger banks healthier and relieves the unhealthy banks of bad equity.

 

That's about it. The rest would be fluff. Once you do this, the credit market would move on it's own and jobs would return as a result of private investment again. Private investment the engine that actually CREATES WEALTH!!!

 

And for those of you that point to his tax cuts as proof that it won't cost you anything, take a look at the costs of services when companies are forced to pay for you. Guess what? They just went up. Everything does. But your income did not. Know what that's called? INFLATION!

 

So F*** YOU OBAMA, NOT ONE OF THOSE EARMARKS WILL GET ANY OF MY PROJECTS OFF THE GROUND, AND WILL ONLY COST ME MORE!

 

So what did I do to destroy the economy? I designed the homes that are sitting empty now. I saw who was getting the loans, and knew I was designing homes for people that should not be qualified to live in them. Average homes went from 1,600 sq. ft. to 2,500 sq. ft.! But I designed them anyway. Sorry.

Edited March 14, 2009 by RJM (see edit history)

[rayzoredge 2]

Very well spoken, RJM. With what you put out, I'm assuming that you are a conservative at heart. I would like to see an educated Democratic point of view to counter this argument to round out the debate a little bit.One thing that you might have overexaggerated is the notion that government projects and jobs ONLY generate revenue which will be later paid back with taxes. But whether you have a government job, work at the local McD's, or are the CEO of a small business, you do spend money, right? You pump gas. You purchase necessities. You pay rent and the utilities. And once in a while, when you feel financially-comfortable, you go out to eat, or see a movie with friends, or buy yourself something nice. THAT would be the point where the consumer, now being part of the "job orgy," will be able to contribute back to the economy by purchasing goods and services or even other people for their goods and services, which means that they in turn will spend their money elsewhere. You have a point, but you might be missing this one.Also, you're not only to blame. Feel better in knowing that the American consumer is part of the squabble that made this mess. Just for the record, I don't claim to be anything politically, just because I hate political rabble. (But sometimes the rabble can be interesting.)

[Echo_of_thunder 1]

Oh so now we find out the truth of who is to blame. But yea everyone had there hand in all this mess. But as we all know and have learned in school. This has happend before and will most likely happen again and again. The economy is a funny game. Wins vs losses, everything has to be just right for it to all work out. Like a teeder totter it has to have 2 to make it work. Spending and Selling being the two. People don't sell, then you can't but and so forth. atleast this is how it was told to me many years ago by my brother.

[RJM 0]

One thing that you might have overexaggerated is the notion that government projects and jobs ONLY generate revenue which will be later paid back with taxes. But whether you have a government job, work at the local McD's, or are the CEO of a small business, you do spend money, right?

That propagates money already generated. Revenue is generated by making a product. Take a natural resource, add labor and sell it for a profit. Service-based businesses allow manufacturers to do so more efficiently. The government jobs take a large cut of the profits, and add bureaucracy. Saying having jobs and spending money is what makes the economy work is what the basis of socialism is about and it doesn't work.

Oh so now we find out the truth of who is to blame. But yea everyone had there hand in all this mess. But as we all know and have learned in school. This has happend before and will most likely happen again and again. The economy is a funny game. Wins vs losses, everything has to be just right for it to all work out. Like a teeder totter it has to have 2 to make it work. Spending and Selling being the two. People don't sell, then you can't but and so forth. atleast this is how it was told to me many years ago by my brother.

The difference this time is that it's not part of the natural fluctuations. It's a credit crisis. You want to sell? Fine. Try to sell. But no one can buy. You want to buy? Fine. Try to get a loan. It's not going to happen. Same goes for if you want a business loan. Tough luck, buddy.

[sonesay 7]

OK I've read this over twice just to be sure I didn't miss anything. I would like to stress you make clear the topic title and include the economy in USA to be more specific. Don't forget this is an international forum and being more specific helps SEO and such. I have very little knowledge of economy but I was interested in all this talk about how it is effecting everybody so I did some searching and came across an interesting number of videos on youtube.com by a guy I still have not found out his name. The series is titled "the money masters" and is split into 22 segments. I have watched 1-12 (9-10 minutes each) last night and learned so much about money and how it works in this world. The history of it and how it has become a problem because people who have it are always wanting more. They want control, money = power. You can control the masses with money and have very powerful influence. It powers war and pretty much everything. I have no idea how accurate it is but I trust this guy is telling the truth since it does seem logical when you think about it. This problem has been around for a long time and did not just start in the USA.In the early ages people used gold and silver to trade for goods. I think the reason for this was because the metals were rare and much easier to carry around then other items. Everything had a value so people would trade flour for fruits or gold/silver pieces etc. If you were just exchanging produce then you would have to eat it right away or it will spoil so having precious rare metals was another form of value. Bare in mind that the only reason money has value is that we all agree that it is valuable. It is nothing more then paper when you think about it but it is valued because we all agree it is. How money came about is because it was a much easier form to carry then heavy gold coins.The earliest bankers were the gold smiths. They would take your gold and issue you paper with printed money on it. You would then use this money and buy or trade what ever you like. Now if you wanted your gold back you just go bring those notes back to the gold smith and he would give you your gold back. The gold smiths quickly learned that not everybody came for their gold and they can issue notes more then was available in gold safely without worrying about people coming back for their gold and not being able to give them it back. They made money of course by loaning out money they did not have and earning interest. They quickly became very rich and powerful groups. These bankers who issue money control it. They determine how much money is in circulation and therefore control the economy. They reduce money in circulation and do not give out loans so that you will be forced to sell your land for cheap and they make a killing of that. There were how ever leaders kings/queens/emperors in that time that understood this problem and tried to remove it but money influences people and corruption/assignations etc happen. A country that has it's money being controlled by privately owned banks are at their mercy. I believe all countries today owe money to private banks.. I could be wrong but I doubt it. This just didn't happen over night its been repeated over and over in the past. When America was colonized it was issuing its own paper currently for its own people. It was circulating enough as needed currency for things to be traded fairly they were prospering Now the bankers back in Europe didn't like this and wanted control over it. This caused war and many problems for America. Eventually the power of the banks got control so now all your money is controlled by them. The federal bank of America is not government but private. I bet they didn't teach you that at school because they don't want you knowing about it. The power switch from private banks to America a number of times but now private banks own it. Its not hard to see how money affects us all when we all depend on it so they pretty much control us. I'm sorry if my writing seem jumbled but I think that covers the main points about the world economy and who controls it. The Banks own us all. Please view the you tube videos and tell us what you think.

[RJM 0]

OK I've read this over twice just to be sure I didn't miss anything. I would like to stress you make clear the topic title and include the economy in USA to be more specific. Don't forget this is an international forum and being more specific helps SEO and such.

Our economy has it's fingers all over the world. Our debts are financed by foreign countries. So really there is no "Economy in the USA".

I looked at some of the videos and it portrays the Fed being private like it was some big secret. It's not. There's a lot of truth to those videos, but it IS distorted. Our banking system has way too much influence by Congress and the White House. That didn't really happen until the Great Depression made FDR and Hoover think the government controlling the banking system is a good idea. And THAT is what we have today. TECHNICALLY it's a private corporation, but the Fed Chair is appointed by the president and the rest are private bankers. That sounds like, "OMG, PRIVATE? So they are trying to make a quick buck off the public???" But who are you going to have run the most important bank in the world? Someone who never ran a bank?? Of course not.

The first thing I saw in the video that makes me question it's veracity was the statement: "Wealth can never be destroyed. Only transferred." That is absolutely not true. Depreciation is a perfect example. You buy a car for $40k and the next day it is worth $35k. Where did that money go? Thin air. No body gained $5,000. Same goes for real estate right now. The value is what someone is willing to pay. Not what it is "worth".