Why is our economy so bad?

numero uno: the last president of the united states allowed it to happen! Yes, it was preventable. Gas prices went up all at once, instead of in small increments like other products. Once gas prices went up two to three times the amount they were this caused everything else to inflate causing an economy crisis. The real answer~ Greediness. The economy is bad because Americans produce few things that are consumed either by Americans or the rest of the world. We import much more than we export. The reasons for this and the problems it causes are discussed in a series of articles. The basis of the problem revolves around the banks. When you recieve a loan from the bank for a house, many times you are not paying the money back to the bank. Banks can sell the loan to a third party for a little less than what they would be getting if they kept the loan and recieved the interest. This works in favor of both the bank and the third party because the bank gets instant money, and the third party uses this as an investment. The problem with this is the bank still decides who to give loans to, but has much less incentive to ensure the loan will be paid back. (they are just going to sell the loan to someone else anyway, so why do they care if it can be paid back or not?) The problems this has caused are ridiculous. Now that the banks have caused this problem for themselves, they are now not giving loans. The feds gave them money to stimulate loaning, but now they just sit on the money because the economy is so bad.

It started with Regan’s trickle down theory, being that if you give tax breaks to the super rich then the benefits of that will trickle down to us middle to poor folks. Of course that never worked and since then many people in Government have done a lot of “talk” about making changes, but no one every does anything. Probably because anytime a president tries to do what is right instead of catering to the super rich, oops suddenly he gets shot. Then Bush spent so much money on his felonious war for oil instead of using half as much to research and develop alternatives. And Finally, all those mega million dollar companies like Fannie Mae that were allowed to run rampid with funds giving CEO’s 40 million dollar bonuses and stuff finished us off by investing millions of “virtual” dollars, or money that only exist on paper.

It all started with the Feds when they got permission to print money in 1913s how do you think they got the money for all the Bail Outs and the Stimulus package? Well they just printed a few billion dollars that really is worthless…So they are trying to fix everything with Fake Money you probably could call it Monopoly money if you wanted, anyways, sooner or later that monopoly money is going to create a financial bubble, the bigger the bubble gets the worst things will get, when the bubble pops we are in a depression.

http://en.wikipedia.org/wiki/Great_Depression

“The Great Depression was a worldwide economic downturn starting in most places in 1929 and ending at different times in the 1930s or early 1940s for different countries.[3] It was the largest and most important economic depression in the 20th century, and is used in the 21st century as an example of how far the world’s economy can fall.[4] The Great Depression originated in the United States; historians most often use as a starting date the stock market crash on October 29, 1929, known as Black Tuesday.”

http://www.wealthdaily.com/articles/federal-reserve-creation/1190

“December 24, 1913 New York Times carried a front page headline that read “WILSON SIGNS THE CURRENCY BILL!” Below it, also in capital letters, were two further gems, “PROSPERITY TO BE FREE” and “WILL HELP EVERY CLASS.”

Prosperity to Be Free? Think about that one.

And nearly a year later the bank was open for business and first Federal Reserve Notes began to roll off the presses. Our modern dollars were born.

And we have been at the mercy of their printing presses ever since. Ideas after all have consequences.

Even President Wilson, who some say owed his presidency to the very men that met so secretly in Georgia some 96 years ago, came to realize that.

Because at a later date, Wilson himself admitted with remorse, when referring to the Fed that, “I have unwittingly ruined my country.”

And going even further Woodrow Wilson wrote this in 1916:

“Our system of credit is concentrated (in the Federal Reserve System). The growth of the nation, therefore, and all our activities, are in the hands of a few men.”

The bottom line is, humans are stupid and irrational.

The more detailed answer is that legislation was passed in the early 90’s to promote home ownership among those who have no business buying a house. The rules were made ridiculously lax. People with bad credit could buy a house using an ARM qualifying at 3x their pre-tax income with zero down. Why was this legislation passed? Because voters wanted easy credit.

Ok, so now you’re a mortgage company. The CEO down the street just started making loans based on this ridiculous idea, because his bonus is tied to quarterly profit goals. His focus is 100% on this quarter’s results - the future be damned. Why is that his focus? Because the shareholders (voters) want him to focus on immediate returns. After all, how many shareholders will still even own that stock in a year? So you’re choice is to also make loans, and delay the inevitable, or report to your stockholders that you no longer have profits to report. You choose the former.

Now you’re the chairman of the federal reserve. You push interest rates as low as you can for as long as possible, because you don’t want to be the one who goes down in history as causing the next great depression. Then you conveniently retire just as the sh** is about to hit the fan.

Now you’re the President. You want to fight a large scale two front war, but you don’t want to raise taxes, because the voters won’t re-elect you if you do. “read my lips”. So you push an unsustainable guns+butter policy. The dollar falls, inflation pushes up, and it becomes impossible to keep interest rates down.

pop!

The solution?

1. Get rid of the federal reserve.
2. Return to a gold standard.
3. Massive re-regulation of the financial sector to prohibit stupid people (80% or so of borrowers) from getting themselves into trouble out of stupidity.
4. New laws to strongly discourage public trading of companies that follow the board/ceo model. Direct democracy at the top. Advisors would be permitted but with no authority.
5. Punitive taxes (90% or so) on capital gains from financial instruments held less than 10 years.
6. Direct democracy in politics as well. Again, advisors allowed, but without any authority.

Very Nice Toadaly, I agree with that whole thing, I think that we should make the New laws smaller too so it’s a family thing where you can actually read over it and talk about it with people instead of there being over 10000 laws that you can’t even keep track of.