Credit in America

45degreeN · Posted: Fri Aug 17, 2007 2:55 pm Post subject: Credit in America

It seems the sub-prime lending here in America has been grossly overused and we are now paying for it by all of those rich investors risking their money in that market losing their shirts, given the foreclosure rates. It seems we Americans have been spending (102%)more than our income over the last few years and the debt is coming home to roost. We could just refinance our home loan and take out any equity thereby spending more on the needless toys our culture loves so much.

I sincerely hope that this bad credit market doesn't spill over into the automobile credit or it might just wipe out the auto industry here in the US. As poor as the auto industry is right now, one big bump might just send GM and Ford into bankruptcy. Both of them are on the verge of it already.

Our materialistic culture seems to be biting us back for our bad economic habits and many people might end up suffering because of it.

I really do hate to be a doom and gloom person but the previous depression (1930's) started over credit problems. Obviously that wasn't the only issue but it certainly hit the stock market hard in '29.
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FFT · Posted: Fri Aug 17, 2007 3:45 pm Post subject: Re: Credit in America

45degreeN · Posted: Sat Aug 18, 2007 1:13 pm Post subject:

Happy or not with their products (Ford's) they have thousands of people working for them that might just get laid off and begin to depend upon the government for hand outs since their pensions will be null and void. The steel industry is in a similar situation, they have more pensioners than workers now and their defined pension programs negotiated in good faith years ago may also be null and void left for the government to handle like United Airlines pension.

Not only are the pensions of many American workers in jeopardy but those conservative lawmakers are attempting to void out the social security also, leaving America in severe economic problems.

The typical American has zero savings and marginal income above their expenses, they've refinanced their house to an inch of its value (since it is going down now not up). America is teetering on the precipice of economic disaster with a president who is in complete denial.

What we need is to re-regulate our economy, cut out the chaos that Bush and Friedman seem to favor and provide a more secure economic environment for our future.
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RevJP · Moderator Joined: 18 Apr 2003 Posts: 7005 Location: USA

Absolutely 45! Let's have the government control absolutely everything, tell us what we can earn how much we have to save, what we must pay or get paid.... In fact, why don't we just turn our paychecks over to the benevolent liberals in the government and let them dole out what they think we poor stupid citizens should have....
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FFT · Posted: Sat Aug 18, 2007 5:43 pm Post subject:

Wheee!! I'm slipping!!
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45degreeN · Posted: Sun Aug 19, 2007 6:00 am Post subject:

Freedom is a peculiar thing, (remember the story of the ant and the grasshopper)

Insecurity is always at the door of the free people, risk is what allows/forces us to make progress but it also brings chaos and economic disasters(regularly).

REVJP somwhere there needs to be a balancing point. I am just as much against the nanny governmental point of view as the next conservative yet an unregulated economy is running amok now and people are suffering not because of their own choices but the choices of the forces of neo-conservatives like Bush and Rove.
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RevJP · Moderator Joined: 18 Apr 2003 Posts: 7005 Location: USA

What people are suffering 45?
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Plotinus · Posted: Mon Aug 20, 2007 6:39 am Post subject:

JP, haven't you seen people who look like this?

What homelessness looks like

I haven't seen this person, myself, but I have seen lots of people like this. The freedom to make money is not the same as the freedom to live a life free from hunger.
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45degreeN · Posted: Mon Aug 20, 2007 9:34 am Post subject:

Those who aren't rich just are left out of the formulas for the future. Even the middle class is now being pressured by the credit crunch and is moving lower and lower. Fewer and fewer jobs lead to the "promised land" of wealth and prestige.

The runaway movement toward self insurance instead of the old ways of employment based insurance means that more and more people are going without the slimmest margins. A single disaster might push them over the edge into the nightmare of poverty.

Corporations are getting harder and harder to pay for what was expected in the near past, health and life insurance. The big brother government is paying for corporate welfare and allowing companies to renege on their pension programs so fewer and fewer people will have the basics of life when they age. Of course the rich will, but the other 90% of us don't.

It is a fiction that everyone can be wealthy, economics just doesn't work that way and the sad truth is that Bush and his rich friends just dont even see those of us who aren't in the high income brackets.

It wont take much for the whole house of cards to fail and this whole country will again be enmeshed in another great depression. It will as usual be the banks who lead us into this chasm. Identity theft and the loss of capital that is guaranteed to the consumer is part of the whole scene. While there is much in the public eye about this problem there is little being done to fix it and every time another credit card is used fraudulently the bank is the one to pay for the loss not the credit card holder. The banks are being very quiet about their losses on this one but the flood of money lost is in the billions.

Part of the problem is the fiction of the safety of the Federal reserve system and the lack of real money. Has anyone noticed lately that the Fed has lowered the value of the dollar. They didn't announce it but they injected new money into the economy, money without anything to back it up is inherently less valuable. They have greased the skids for a lowering of the quality of life for us in the future. Something the middle and lower classes cannot afford to lose but which the upper classes will allow to suffer for the sake of their convenience.
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