Economic Crisis; Solutions

[Overdog]

What are some ideas as to ways we can solve the current economic crisis?

Seems to me we've had this problem before. The government subsidized agriculture back in the 60's and 70's and created huge agricultural surpluses and about 100,000 farmers that the free market would never have created. To solve the problem Regan stopped the subsidies and paid farmers in surpluses of crops. It was called Payment in Kind. Eventually, those excess farmers all went out of business and we had the "Farm Aid" concerts, etc., that some of you may remember.

It seems to me the best way to address the economic problem we now face is for the government to buy up the foreclosures and sell the properties back to the construction industry over time (at some discount of course) in exchange for them not building new houses. This would be similar to the Payment in Kind program.

The market is adjusting to a housing surplus, and it cannot be stopped. The current financial rescue plan just passed by the senate will not stop it, and will just be a huge waste of money.

Now, this idea would probably be even more expensive than the 700 billion, but it would be a solution.

What are your ideas?

[Buffy]

Originally Posted by Overdog

It seems to me the best way to address the economic problem we now face is for the government to buy up the foreclosures and sell the properties back...

The current financial rescue plan just passed by the senate will not stop it, and will just be a huge waste of money.

Well, actually, that *is* the plan. The only issue is that the holders of the mortgages will only sell the most "toxic" (i.e. over-valued) mortgages to the government. That's why the Senate bill included provisions for acquisition of *equity* in the firms that are selling these mortgages: they have to give up some of their equity in order to have the privilege of getting more for those mortgages than they're worth.

It's definitely *far* from ideal, but this is Governmental Sausage Making in action: its better than the alternative!

Those that are against the plan are simply not seeing the fact that credit in this country is drying up faster than spit on the asphalt in August. For those of us who have small businesses, the lucky ones don't need lines of credit to make payroll, but those are in the minority. If this thing fails, it will be all of about 60 days before unemployment and business failures shoots through the roof.

Its not about "letting the fatcats off the hook" or "small government" or even "Nancy Pelosi is being mean to us!" Its all about *survival*.

We desperately need to roll back the elimination of government oversight and regulation of financial institutions, and more importantly, start collecting the statistics that the Bush Administration *stopped* in order to hide how much money those fatcats were stealing earning!

The hidden crisis in the latest round is that because only the biggest banks and institutions can buy up the banks that are failing, we're headed toward the same sort of mindless consolidation that leads to dysfunctional markets. Just like with Oil or Pharmaceuticals, when you have consolidated down to a handful of participants that dominate the market, there's no need for collusion to ensure that markets aren't "efficient" (meaning that prices don't go down when demand drops or supply increases because its not in the "interests" of the participants to do so, and they can *assume* that the few other players will find mutual benefit in doing nothing).

With only 3 banks left in the whole country, are you *sure* you're ever going to get a good deal? Why should they not charge you $5 for every withdrawl? There'll be no pressure not to!

And folks think that this doesn't affect them....

So, trust busting big time: That's why I'm a Republican, Teddy R's massive "restructuring" of the Oil and all those other horrid so-called "natural" monopolies of a century ago....

The death-knell of the republic had rung as soon as the active power became lodged in the hands of those who sought, not to do justice to all citizens, rich and poor alike, but to stand for one special class and for its interests as opposed to the interests of others,
Buffy

[Racoon]

What can we do??


For starters you can make punishment of hardcore financial crooks more than that of a person in posession of Marijuana..

I never understood how white collar criminals, who steal and bilk millions out of peoples savings and retirements, get less Jail/Prison time than some 23 yr. old punk kid on the street w/ an ounce of lettuce.
(See Enron and WorldCom as examples)

Make the Crimes more Punishable..

[LaurieAG]

Originally Posted by Overdog

What are some ideas as to ways we can solve the current economic crisis?
What are your ideas?

Hi Overdog,

Considering that there are between 500 and 700 trillion dollars of derivatives floating (actually the real money is actually 'floating' on the derivatives) around the global financial system today, the only way to solve the problem is to use the same method i.e. 'economic rocket science' that caused all of these problems to solve them.

The derivatives should be rolled into 'MARS COLONISATION INC.' by the global governments so that not one red cent can be claimed on planet earth, the payouts can only happen, if they ever do, when the receipts are presented at the MARS REDEMPTION CENTER in person by the holder.

This is the only real way to solve it because anything else just perpetuates the mindless greed and market manipulation not to mention despoiling our planet as a side effect.

[Cedars]

Math is not my strong point. But the numbers just dont add up for me.

"As bad as the mortgage crisis has been, 94 percent of all Americans are still paying off their loans. The problem is Wall Street placed its huge bets and side bets with all of those fancy securities on the 6 percent who are not. "

"It is [credit default swaps] an insurance contract, but they've been very careful not to call it that because if it were insurance, it would be regulated. So they use a magic substitute word called a 'swap,' which by virtue of federal law is deregulated," Greenberger adds.

The problem was that if it were insurance, or called what it really is, the person who sold the policy would have to have capital reserves to be able to pay in the case the insurance was called upon or triggered. But because it was a swap, and not insurance, there was no requirement that adequate capital reserves be put to the side."

A Look At Wall Street's Shadow Market, 60 Minutes - CBS News

This stinks of Enron, and rolling blackouts. It reeks of "with intent to defraud". It smells of conspiracy.

I just didnt see enough voluntary loan restructuring by these very companies who have their hands out for taxpayer backing. They want taxpayers to invest in their toxic profits? Then sell me a package I can enter into with all the facts.

Let the bad players fall. Pick up the pieces AFTER the fall. The penalty the wise and unaffected have to pay (like the 94% of americans who will fund this bailout in spite of paying their debts) is too great a price to pay for toxic investments. So much for a free market; why is it only free during the good times of record profits?

[Overdog]

Hmmm. No solutions. Well, I bought a years supply of food, a 30-30 with lots of ammo, and a water purification system.

[Turtle]

Originally Posted by Overdog

Hmmm. No solutions. Well, I bought a years supply of food, a 30-30 with lots of ammo, and a water purification system.

Who ya gonna shoot there Over/Under Dog? You're not alone though; gun sales here are through the roof. I bet there's a lot of prayin' goin' on too, if Obama got it right.

Anyway, gas prices have plunched & it's because people cut out the uneccessary driving. Solution #1 then is cut out the fat at home & don't wait for Congress to do it too so it trickles down to you. If folks can afford to cut back, then they can afford to not go back to the wasting.

You'll need more than guns & water Dawg, and here's a place to revisit on that: >> Philosophy of Disaster Preparedness

I'm hearing that Holiday sales are down too and to a large degree it's because people aren't spending ,as much as it is having nothing to spend. This Holiday, buy green. Besides that gun, water purifier, and ammo, buy some solar panels, deep-cell battery, and an inverter & use them. Buy garden tools & seeds and put in a garden this next Spring. Buy practical items and leave off the crappola. Boycott McDonalds Happy Meal toys and their ilk. Buy some stamps and write your government officials and tell them what you want & that you are watching them.

Take your own action & take it now. Lead, follow, or get out of the way.

[Chiantiglace]

There are a few things the government could be doing to solve all of this, but for some reason they seem to be blind to it, why all the bickering and just make the right choice.

Soft paternalism all around will fix things, unfortunately it won't be a quick fix that everyone is pleading for.

Why not find a way to have other companies invest their money into the mortgage system. Large companies like google, microsoft, etc. that can build programs to buy up bad mortgages and foreclosures. That way by separating out the tasks it is itself another free market. Once the credit system is fixed the houses can then be bought back slowly with interest of course. The government could easily give tax breaks to these companies for picking up the slack, like a right off for charity.

Give people wit money incentive to fix the situation. Right now there is no trust, especially in the government so you can't rely on any private party to pick up some slack, they all think they are going to get murdered by taxes, and with a democrat majority the larger companies will be getting hit pretty hard.

And why are we bailing out the auto-industry. They have been making poor research choices for decades now? Didn't everyone see this coming already? I grew up in North Carolina where 15-20 years ago everyone either had a ford, chevy or dodge and they all had their family pride in their trucks. Now when I visit all I see is toyota and nissan. Thats how a free market works, these companies made poor choices and are suffering the consequences, its not our job to hold them up. If we wanted to hold them up we would continue buying their piece of shit vehicles. Why should we pay more taxes because they didn't want to create energy efficient vehicles. Let me just say there is no saving these companies if they are going to fail without the bailout. All the bailout will do is prolong their collapse and at our expense. In the long run it will end up costing far more jobs then it will save because of so many small businesses laying off people because they can't pay their bills.

This is why Jefferson thought government should be continuously overthrown, how do we do that now?

[Overdog]

Originally Posted by Chiantiglace

...
This is why Jefferson thought government should be continuously overthrown, how do we do that now?

I don't know, but I can't believe what I see happening in this country. It seems the government has sold out Joe Taxpayer, and government efforts to avoid or postpone the inevitable free-market cure for the excesses of the past will be ruinous.

The Fed spending trillions of dollars of Joe Taxpayers money without congressional approval makes me wonder who's in charge of this country. It seems obvious that Congress's "power of the purse" is irrelevant or inconsequential compared with the Feds ability to spend our taxes.

It looks to me like the Fed and Corporations "too big to fail" own all of us, including the government!

[charles brough]

Originally Posted by Overdog

Hmmm. No solutions. Well, I bought a years supply of food, a 30-30 with lots of ammo, and a water purification system.

Here is a real optimist! He expects it to be over in a year! (. . .just kidding!) I also believe it will be over that soon!

Here is why: The government is flooding the system with new money. As long as problems grow worse, and they will, the government will of course continue to do that. About 6 months after the stock averages start rising, t(soon) the mass of money that is now flowing into treasury bonds and paper by panicky individuals and business will start to flow OUT of it into all these now-very-cheap assets such as houses. The dollar will fall in value making prices recover and what we produce cheaper to the rest of the world.

We are making one big mistake due to the classist privatizing privateers in government. They would have us believe owning stock in financial and auto production businesses is "evil" ("socialism"). Our problem is that money we use to help the financial and auto corporations with could be retired from the system as we recover if the government would always take back a stake in the corporations it helps. Otherwise, we build the foundation for hyper-inflation in the future.

charles brough
the Atheistic Science Institute - home page

P.S. Overdog, how about a propane tank, stove and light as well? Did you overlook getting an electric generator?