What Washington should (and shouldn’t) do

We need a way to ‘de-leverage’ the average American guy. For those who are unemployed and assets tied up in 401k’s or IRA’s that want to use them to retire their home mortgage, let them, without any taxes or penalties!

Why?

1. Removes the debt from the individuals balance sheet.
2. Frees up cash flow for the individual – no more mortgage payments, probably one of if not the largest CF drain on a person who owns a home.
3. Clears the loan from the bank balance sheet, freeing up reserves, allowing a improved lending status.
4. This approach does not cost the US Taxpayer one single dime on a real time basis. No future tax burden on the future generations…

And when you think about it, all this is really, is an asset swap from mutual fund ‘paper’ to a real asset, one’s home…

Write your congressman, Speaker Pelosi, and Pres. Obama and demand they do something for average Americans, allow them a ‘ break ‘ so they can help themselves if they want to… It’s easy, just do a search on google with your town and congressional representative in the question, and you should get back a list of yours…

If Congress can pony up Trillions to bail out corp america and the ceo greed cycle, then it should very easy to lift all the taxes off 401k or IRA withdrawals used to pay for one’s home or a child’s college education – especially when the impact to the current and future budget is zero $$…!

The congression oversight committee had the AIG retention plan added to the minutes of their hearing in 2008. Congress needs to start reading. They never read the stimulus package.

I am on the side of business. Give business a 100% deduction for capital investment and watch American manufacturing grow and generate jobs. Give employers a $150 deduction for providing medical insurance and watch the ranks of the uninsured disappear. Give American housholds a $5000 tax holiday and watch American’s spend. It would all cost a lot less but it will not generate huge political contributions so obvisously the government wants no part of it.

Congress should sumbit ALL their resignations and WE THE PEOPLE will elect NEW members to represent us. They will NOT be allowed any pensions or to apply for unemployment benefits!
As for Obama, a little more time will tell.

The government should move to the Greenbrier, have a nice break, and never come back.

Government should get back the money from AIG ($170 billion) and send all the taxpayers a prepaid visa/mastercard utilizing this money to spur consumption.

Some have suggested protectionism. That is very scary. On the otherhand we definately should pursue practices that will bring back manufacturing jobs from overseas. The best thing we could do would be adopt an agrressive weak dollar policy. To make this most effective we also need to join with the rest of thew worls and get the Chinese to let the yuan float with the market.

Two things that the government should do to spur employment

a) Stop abuse of the Alien Labor Certification process – I work in the finance IT field and have seen many American peers out of work with skill sets in hardware and software technology. However, they can’t even get interviews for jobs that “belong: to foreign citizens that came to this country. Banks that received bailout funds are now going through the expensive process to sponsor them.

b) Enforce equality for employees with disabilities in the workplace. Nationwide, unemployment for employees with disabilities is nearly twice that of the non-disabled population.

Concentrating on Bonuses is another diversion that shallow press likes it, though they should be dealt with. The real problem is the mindset of the last 30 years that still prevails, apparently, even at Pres. Obama White House! All involved in formulating economic policy during that period should be purged or disinfected, including Larry Summers and Tim Guithener!! Paul Volker is fine!

(sigh) I’m very much afraid the politics of class warfare has gotten in the way of what needs doing.
Macroeconomics: For the past 30 years the productive sectors of Americas economy have been undercut in favor of finance and inherited wealth. Fortunes have been built dismantling productive companies in hostile takeovers rather than innovation. What is called entrepeneurship is actually marketeering and sales games. Witness: GE Capital and GMAC overriding the producing portions of those companies. So much so they have endangered them. Now the largest segment of the economy, consumers have pulled back. Why? No need to make it complicated. There wages have stagnated and they are overextended. Too large a portion of the wealth has ended up hoarded in the hands of the miserly few who keep tieing it up and not spending. Their so called investments are just paper shuffles and property inflation. If they will not share then sharing has to be enforced or everything grinds to a halt.
Energy Policy
We have let a few extraordinarily wealthy and connected individuals meet with an extraordinarily vile vice president and set up and energy policy to benefit themselves to the detriment of the rest of the country. Dunderheads. Voila Enron, the supposed smartest guys in the room. They have been allowed to push the nation into wars and immoral activities like torture to further their selfish class warring ends. It is time to formulate a rational energy policy which does not include government giveaways of our natural heritage to a connected few. It should not include dumping in our own nest. It should recognize waste. Does every used car salesboy, who sees himself as a Hero Entrepeneur, need to set up a blaze of lights visible from 15 miles away? Does everyone need to live 40 miles from where they work? Is it good to spend a fourth of your precious life commuting? oops not what our class warring overlords in the salesboy marketeering finance world want to hear. Don’t want them people thinking just consume away.

Finance
Finance needs to return to originating and servicing loans. There is no magical way for every wealthy, connected trust fund baby to earn 15 or 20 percent returns a year while they ski away in St. Tropez. The class warriors want you to believe it is all the damn Unions and welfare bums fault for ruining the economy. Nonsense. The people who were paid multi million dollar incomes for managing responsibly did not manage responsibly. end of story. Now they want those of us who have been forced to take reductions in our lifestyles, despite hard work, educational advancement and every effort, to bail them out of their folly. It is time to stop. As Warren Buffett said, there is a class war in America and it is his class which is waging it and winning. The problem is that like all wars it is inherently destructive and threatens to topple the whole house about all of us, rich and working people alike.
Thank you for taking the time to read this far, I enjoy getting these thoughts into the world- especially since the rich bankers, who have been rewarded beyond all right or reason for their judgement, are only using it to continue pulling down multi million dollar bonuses from my tax money as the whole system comes crashing down. It is obvious their only concern is with themselves, no matter how much damage they do to us and everyones childrens future.

Now the Fed is planning to loan the government (the government loaning money it does not have to itself) which fictional money the government will then spend. I think I will loan myself a million or two and buy a yacht and a McMansion with it. Will that work? Can anyone say Ponzi scheme? Bernie Madoff for Fed Chairman; at least then the fraud will be well run.

I guess Obama’s mottto, when insulted by AIG or other financial biggies, is “no we can’t.” OIf course when it comes to spending money we do not have and trying to force others to pay for it, his motto is “yes we can.”

I think that some of the dinosuars should be set free to die rather than bailed-out(e.g. AIG and Citi). Small businesses will lead us out of the recession and they need support. The best way to help them is to get some form of Universal Healthcare in place. This will free up small business cash, cause profits and tax revenues to increase and allow for the hiring of many recently unemployed people.

The other fear I have is that in his pursuit to punish the evi-doer executives who made millions, Obama is also shooting up lots of the “friendlies”. These are the hard working middle managers and ethical executives that business needs right now to right the ship. Don’t discourage them!

I don’t believe in trickle down economics, but I do believe that if we punish the “animal instincts” of the business class, that we will create a great “push down” in society where college educated people run the register at McDonald’s and Wal Mart while the less educated move out of homes and into shanty towns.

Regarding the AIG debacle, let them have their bonuses–we need them to retain their top talent don’t you know. Then introduce the 99.99% tax on bonuses to finance people. Everybody is happy.

Oh, and give up on bailing them out. Sure the world would have ended if we didn’t, but we would have had a lot more money to deal with it. It may end anyway.

Folks,
to Get out of this, Protectionism is the only way.

To much money is going into the hands of banks and out to Communist China, where Human Rights and the standard of living do not match those in the US.

Free Trade is just another name for Socialism. Especially when countries out there only want to produce for the US and not consume.

With protectionism, we show them exactly what the US is. A very powerful producer with ingenuity that does not require a bunch of 3rd world hacks to prop up our debt.

We need Fair trade rules where an even trade of needed resources and skills are traded between countries. Not wholesale sellouts of our high skilled/highly trained jobs to a bunch of countries with workers whow work for less than the Wal-Mart greeter, and whose standard of living is less than a bum on a park bench.

Offshoring and Free trade are just sending all the stimulus to Communist China and India.

I think they have done a decent job, minus two things. One: I don’t think it’s very bright to overtax the investor class, especially if your plan is to get the markets going and keep credit flowing to business. Two: I would have liked to see a much bigger cut in the payroll tax. This would speed money into workers pockets quicker and slow the bleeding on layoffs. Those are the only two major blunders I see.

If your job was to bring a pot of water to a rolling boil and keep it that way, so the restaurant could make spaghetti, you would set the pot of water on top of the stove and light the burner. The burner would heat the bottom of the pot.

The water in the pot would boil FROM THE BOTTOM, UP.

Our economy works the same way, or it does not work at all.

The FedGov needs to do the following:

1) Immediately stop all payroll withholding of income taxes.
2) Eliminate income taxes on the first $200,000.00 of income.
3) Invert Social Security. Instead of paying on the first $95,000.00 of income, you (and your employer) would pay SocSec tax only on income OVER $95,000.00.

These actions, if taken while there are still a frew people on payrolls, would start to turn the economy around immediately.

In the longer term, the FedGov must begin to unwind the anti-worker, anti-family, anti-union, community-busting workplace regulations it has placed on labor’s back over the course of the past hundred years.

The corporate form has provided many blessings but the conservative Republican movement has to wake up and smell the misplaced faith. Greed is not good.

Corporations are great for applying capital profitably but they make lousy instruments of social justice. We must rein them in before they destroy us. (OOPS! It may be too late!)

Corporations must once again be made to serve the commonwealth; for far too long, our commonwealth has been made to serve corporations.

There is no need to pay the slightest attention to the pro-corporatists. Events of the past few years have completely disproven and discredited the failed hypotheses of the conservative Republican movement: pro-corporate, trickle-down/drip-down, supply-side economic theories—all have been completely and absolutely disproven by the ongoing destruction of our Nation at the hands of the so-called conservatives. (They ought to change their title from “conservatives” to “scorched-Earthers.”)

Business needs now what it always has needed: DEMAND. Now, demand is simply desire with money in its hands.

The destruction of unions for the past fifty years has resulted in wage stagnation. Because business still wanted to do high sales volumes, it devied to ramp up demand by advertising. This created desire, but no wealth with which to satisfy the desire. Business did not want to allow workers to receive true wealth in the form of higher wages, so it pressured the FedGov to embark on a loose-money policy. Thus, banks were forced to provide FALSE WEALTH in the form of EASY CREDIT. The tipping point was reached about thirty or forty years ago, and real, inflation-adjusted wages have stagnated ever since.

During the Panic of 1908, it was observed that “bad money drives out good.”

Similarly, false wealth drives out true wealth.

Those who saved prudently (20% to 30% down payment) for a home were priced out of the market by those who happily paid 50% more than a house was really worth on the basis of 5% down payments and “No Income, No Job or Assets” (NINJA) loans—FALSE WEALTH DROVE OUT TRUE WEALTH.

The problems our economy faces will not go away until we restore the relative market value of a day’s work as done by the average working man or woman.

Our corporations used FedGov regulatory power to destroy the unions that protected and strengthened the relative market value of the American worker, thus killing the goose that laid the golden eggs. We must reverse this sorry state of affairs by restoring the primacy of workers’ rights, or it will mean years, perhaps decades, of misery for our Nation.

The current problem is one of fear and lack of confidence. What would restore confidence? Seeing some perp walks and prison sentences for the financial whizzes who earned astronomic bonuses while precipitating this disaster and the establishment of regulation and transparency to make it more likely that these selfish giants cannot do this to us once again. Right now it just looks like business as usual and higher taxes to make the reckless whole.

[sigh] I’m very much afraid that the politics of class warfare has gotten in the way of what needs doing.

Macro economics. America’s economy used to consist of about 70% consumer spending, 20% investment, 7% net imports, and 3% government deficits. So when the largest segment contracts for any reason it is far easiest to take up the slack by promoting the 2nd largest segment. Somehow, the government has decided to pump up the smallest segment — oops.

How one pumps up investing is fairly easy — cut taxes along with interest rates. America’s corporate income taxes are the second highest among developed countries [only Japan's are higher and you may notice that Japan hasn't been growing either]. For many types of income earned wholly overseas, America is the only country that even tries to tax [other than the country where the income is actually earned].

But the government wants to keep high corporate income taxes, raise taxes on foreign source income, and, on top of that, raise taxes on interest, dividends, and capital gains.

[Stop quibbling. When a tax cut expires because the party in power hated it from day one, the effect is a tax increase. Word games about what is a cut and what is higher taxes are used only to try and baffle the public with BxxxSxxx.]

And then we’re going to have a new and huge carbon tax on top of this?

No wonder investors are on strike and want to stay on strike. Less income and higher tax rates on that lower income — why would anyone want to buy that deal?

So the government has the 70% part of the economy falling and has invented good reasons for the 20% part to also fall.

Wow! What dunderheads. Even with the foreign trade deficit falling [in large part due to a 65% collapse in the price of oil], the amount of added net government spending that would be needed to return the economy to the totals it once enjoyed has to be enormous. 787 billion won’t be near enough — try 2 trillion.

Energy policy. America’s defacto energy policy since 1979 has been that those nasty, dirty jobs aren’t done here. We have the oil and gas. The work is now done in Venezuela and Canada and Brazil. And in the Middle East.

Worse, we have refused to build nuclear power plants to offset the oil and gas we don’t want to drill. And we’ve refused permission to dig and burn coal to offset the oil and gas we don’t want to drill.

So this has left America more dependent every year on imports of energy. For which we must pay and which is the cause of our ballooning foreign trade deficits.

The sheer size of all the money we are paying to buy the energy we need but will not produce at home is what fuels fascist Islam. They’re getting plenty of money through not so underground support from the very people we have to buy oil form.

And all because America won’t get it’s hands dirty and won’t risk getting its land dirty with producing enough energy here at home.

Dunderheads. Complete and utter.

France toughed out the nay-sayers decades ago and proved that nuclear fuel rods can be recycled safely into more nuclear fuel rods, thus solving over 95% of the high level nuclear waste problem. When they committed to doing so, America was the world leader in that technology [it is used in producing plutonium bombs]. We are no longer the world leader in that technology — we just gave it away because “no one” can be trusted to keep track of the fissionables and thus keep nuclear bombs out of the hands of terrorists.

oops. it looks like terrorists may have other sources of bombs in the not so distant future. So that prohibition on American technology accomplished nothing useful and helped cause much of our present energy ‘crisis’.

Alas, this, too, isn’t what the government wants to hear. What they seem to want to hear is that Americans will volunteer in droves to reduce their standard of living to second world levels — or at least to second world energy usage levels.

Did they bother to ask the average worker or mother if they want their childrens’ future to be poorer than their present?

I’ll happily bet dollars to doughnut holes that virtually all American families want their children to have more and better opportunities than they had, not fewer and poorer.

I have news — in the long run the energy efficiency of the entire economy can NOT be arbitrarily yanked upward by several percent every year for a decade. No such technology exists, or is even thought possible — with the sole exception of mass poverty.

Energy usage per family can decline by small amounts for one to three years maybe — BUT will then begin going back up. The ONLY exception is if we all enter relative poverty and stay there — this means no economic recovery at all.

Thus, it is vital that America’s energy policy be one of increasing production and increasing it in significant amounts. The expandable portion of “green” energy is currently 1/2 of 1 percent of total usage. That isn’t significant now and isn’t going to be significant anytime in decades, no matter how much money the government throws at the “problem”.

Fixing our credit issues. Let us be very clear. America and the world ran a huge economic bubble based on far too easy credit for most of a decade, if not longer.

We can’t fix the credit issues by doing more of the same. And that problem as excessive leverage.

Lending has to return to safe and sane quality. Safe and sane means that buyers of automobiles and houses make a significant cash down payment. It means that banks build models of the possible levels of loan losses in future recessions and price loans high enough now so that they have enough credit reserves to cover the losses when they happen [as they absolutely will].

Meanwhile, we’ve been beating on the banks for something that isn’t their doing — the credit contraction that is currently in process.

As Bank of America’s Ken Lewis pointed out, but America didn’t want to hear, his firm increased lending in 2008 over 2007. They’re in some difficulty and yet they increased lending.

The same is happening in the banking system as a whole. Lending is higher than ever.

The problem is that lending outside the banking industry has gone from half or even 2/3rds of all lending to virtually zero and in only a few short months.

The bond market is virtually dead. The reason it is dead is because the firms and people who used to buy bonds were burned by the rating agencies. AA and AAA ratings were issued on pieces of mortgage obligations when they should have been rated B or worse. Now the bond buyers have losses on what they were told were good securities — so they flat do not believe anything the rating agencies tell them about credit quality.

Nor should they. Imo, most of the credit rating agencies plainly proved that they do not know what will likely or even possibly happen to the ability to pay on bonds when a recession hits. [They should probably be sued until they're out of business.]

The other significant source of loan money that has dried up is/was partnerships and funds. Used to be a group of the wealthy would put in a few million and then borrow three times that amount very cheaply. Then they’d use all the money to buy pieces of credit card debt or auto loans.

They aren’t doing so any more. For one, they can’t borrow cheaply to do that because everyone knows, now, that it is too risky.

Second, of course, the wealthy people are listening to the government say that they’ll pay more in taxes. Well, that reduces the income but doesn’t lower the risk. Rates on auto loans and credit cards have to go up, and perhaps by quite a bit, in order to lure this money back into making the loan. Six percent auto loans are probably a thing of the past now — ten percent is more like it — and you’ll have to put 20% cash down, too.

Btw, the ability to reduce a mortgage’s terms in bankruptcy court that the government wants to make legal will raise the risk of losses to mortgage loan buyers. One professional estimate I read of this effect was near two full percent.

If this passes and mortgages jump from five something percent to seven something percent, for the same price property, we’ll all discover that buying a house isn’t cheap any more and that recovery in the housing industry [which is overbuilt now and needs several years to recover] will be put off another few years.

***
BUT, since we all hate the moneyed class and the banks, we aren’t going to try to either get the issues right, nor entice them into committing more funds. NO! What we have to do is bludgeon them about the head for their supposed sins.

[It's enough to make someone think that class warfare is a religion whose prime belief is that the rich somehow did it to the rest of us. How did they do that? Is it that the rest of us aren't smart enough to stay away from bad deals and overspending?? Bosh. That's an argument that the people who got into trouble aren't capable adults and need an economic handholder to tell them what they can and can't do with their lives.]

Higher taxes on the sources of loanable funds will NOT increase the flow of those funds — except, of course, the portion extorted as the higher taxes and then allocated via politics to whomever the party in power thinks will vote to keep them in power.

[Isn't that what, in essence, the CRA law's added teeth in 1994 did? They pumped up lending to people who couldn't make their payments in the next recession, then "sold" those loans to FNMA and FREM, who finally went bankrupt in 2008 and exposed the whole mess as a huge loss on the taxpayers' dime. (The full amount hasn't been revealed yet.) In this case, I suspect "dime" is almost literal and the taxpayers will end up losing 10% of all their assets to this one vote buying scheme alone.]

Auto companies As I pointed out a few days ago, workers in Hermasillo, Sonora were building the best quality Fords in the world for a wage of about 10 US dollars a day.

Low education jobs that can (physically) be done in low wage countries will be done there. The economics can not be defeated unless you are willing to cripple the rest of America to save those jobs.

Production of automobiles in America is probably at an end. We should import them from Mexico and similar second world countries where workers with sixth grade educations are happy to get the work.

Any government program which does not recognize this plain economic truth is complete folly. It will just be tens of billions of dollars down the rat hole.

I do not know if this result can be accomplished without throwing GM and Chrysler into bankruptcy. I do know that any “plan” which will not accomplish this is doomed from the get-go.

alas, I have no confidence that the party currently in power in Washington will bluntly tell the labor unions involved that their jobs are dead and can not be resurrected.

What I expect they’ll do instead is pour a river of money into the sinkhole and hope that plugs it up.

It won’t.

***
Many thanks if you’ve read this far. I enjoy getting these thoughts out into the world — especially since the politicians and their allies have zero apparent interest in saving your future or your childrens’ and grandchildrens’ future.

=)

I think it’s going well. We have to remember Mr. Obama said, “let’s not let the essential wait for the perfect.” I don’t believe anyone on earth has a perfect plan. Our Gov’t is trying to do some things on several fronts. I also believe it’s a little too early to judge anyone but, so far it looks good. I like the accountability and I like going after all these companies who are still doing stupid things that we’re all reading about.

This is nuts!

Does anyone else think we are heading down the exact same road as say France?

Government cannot run itself, let alone fix anything. What has our government ever fixed, the Airlines?

Small Businesses are and always have been the key. Businesses that actually make something that benefits society are probably a good place to start. Wealth Creators, not Wealth Dividers are the key. Bankers, Lawyers, Insurance, Politicians, Accountants (anyone see a pettern here?) are wealth dividers. These are also the only people, aside from the automakers (do not get me started on this one) that are being “bailed out”. Why? Because they cannot survive without governmental intervention. Imagine a world where the government no longer functions (really not much of a stretch here right). When they disect what happened people will laugh that all the money was spent bailing out companies and industries that could not survive without governmental decree of some sort.

Rome did not implode over night. Has anyone read the rise and fall of the roman empire? Any parallels here?

Government big enough to supply everything you need is big enough to take everything you have … The course of history shows that as a government grows, liberty decreases. – Thomas Jefferson

It all started with housing. That’s where the fix needs to start. The “stimulus” bill had one provision that would have really helped, but of course it was stripped out. We need to reinstate a version of that provision: a $15,000 cash rebate for any person buying a home.

Home prices keep falling because there isn’t a sufficient number of buyers. As they fall they create the problems we have: foreclosures, people feel less wealthy, and people have a lack of confidence because of that.

All we need is more buyers in the housing market, and I believe the $15,000 cash rebate will make that happen. Any market’s prices will be driven up by buyers. Housing is no different.

More buyers will help stop the foreclosure mess and do wonders for our economy. Money will flow through the system. Housing starts will increase (reversing a contraction of about 75%!) creating jobs in the construction trades, and then in the manufacturing plants that make all of the materials that go into a house, and in all of the associated businesses.

We live in a market economy. We need a market solution. Not a bunch of politicians using this as an excuse to fund a lot of ridiculous pet projects in the name of stimulus.

The government needs to clean house. Stop giving tax dollars for criminals to split amoung themselves, that will be a first step. We do not need to award incompentence it sets a bad example. Anyone who was at the helm when their ship went down should be fired.

The board members of major financial institutions who are approving these enormous compensation packages amoung their top executives need to be dealt with also. If Congress does not pass laws soon to stop these things from happening things can become alot uglier then they already are.

at this point i would just like an admittance of guilt— a long, well winded admittance that covers the entire span of american history and its’ double figure-8 knot that ties american big business and government together in eternal love. the tie that excludes most americans from the riches only the few see and control.

To the people who say NOTHING the government does is helpful, I agree. We should repeal laws against robbery, rape, kidnapping, drug dealing and murder. That is just keeping people from doing what they want and preventing survival of the strongest and fittest.

Fire the leadership of the big banks and brokerages which needed us to support them. Find a way to prosecute them criminally. Levy civil lawsuits for failure to abide by their fiduciary responsibility in their mismanagement of funds entrusted to them.

Until their is accountability for their failures nothing will improve. The CONservative mindset that the rich deserve everything handed to them regardless of how little they do to earn it has brought us to this. It needs to stop right now.

STOP THE MADNESS!!!!
Government will not fix the problem. All these efforts will just screw up the system more. Government can’t own and run businesses–it doesn’t work.

Real estate prices must fall back to their appropriate levels. We can’t encourage people to borrow at low rates and keep artificially propping up values. The day of reckoning has come and consumers and business leaders must learn from their mistakes. Why should I pay for their mistakes!!

Regrettably, Obama may get credit for fixing this just because time will pass and it will all get worked out by the markets while congress goes about trying everthing in its power but really doesn’t do anything productive.

STOP THE MADNESS!!!

Washington could save a LOT of money by dumping AIG; we can use that money for much better purposes. It’s time to cut the cord to AIG. Downsize them first, if needed, then chuck it.

Wouldn’t it be ironic if it turns out that China has invested big-time in mortgage junk bonds and derivatives ? They’re lecturing us about managing money … yeah, right. I have my suspicions.

They should get together with AIG and see how much more of THEIR OWN money they can vaporize. Good riddance.

The government needs to get out of the way!

as Ayn Rand’s John Galt (google “going Galt” to learn more) said in Atlas Shrugged “get out of my way”.

I got an email about a book titled “Uncle Sam’s Plantation” by a woman who got off welfare. She really said it best “there are two Americas — a poor America on socialism and a wealthy America on capitalism.”

The only money government has to spend is what it either prints, steals from taxpayers, or borrows (to be paid back with future tax revenues).

What would make this really obvious is if all the news media, instead of using the term government, public, federal, grant, etc when referring to money ultimately coming from taxpayers is to use the term “tax dollars” or “tax payers”. When we talk “government program” it sounds “kind”. when we say “taxpayer funded program”, it takes on a different meaning, maybe even for recipients.

Failure to remember that taxpayers can cut back on income earned (going galt), or rearrange finances to turn taxable interest /dividends / capital gains into tax free or tax deferred income, and that corporations can change the country of incorporation, or be bought out by a foreign owned company (want to bet St. Louis and MO, and even USA are missing those taxable profits now Anheuser Busch profits now belong to Belgium based Inbev).

Want to bet that one reason Arkansas senators, democrats both, are mitigating their support for Card check bill might be Walmart letting them know other states, and countries, would love to be home to walmart headquarters. And they are just one company based on the U.S.

Why are we giving money to large financial companies who screwed up? Try this…Give every household in America (approx. 60 million)who’s annual income is less than $500,000 a stimulus check for $300,000. The average citizen would end up putting most of this money immediately back into the economy by paying off their debts. Anything left over would then go to the banks for savings, retirement, kid’s education etc. Some would start up new businesses and start hiring people. It is a win/win situation. Give it to the people, rather than taking it from them, after all it IS their tax money, and if anyone thinks that big companies can spend it better than the American people, just read about how AIG plans to do it.

Plain and simple: STOP meddling and manipulating the markets!

Stop bailing out the losers, let them go bankrupt. The strong will survive and flourish. The more the government injects itself into the process, the longer it will take for the economy to find its footing.

NOTHING the government EVER does is ever really helpful, except maybe getting the mail from place to place (and they even screw that up frequently as well).

Bottom line: get the hell out of the way and let the free market determine what is what, and what things are REALLY worth. (Artificially propping up dead bodies is still just propping up dead bodies…remember “Weekend at Bernies”, Bernie was the life of the party but he was still just dead in the end.)

Number one would be to immediately recind the stimulus package and redirect the money to things that will actually produce economic growth. It does not need to be bigger, just a lot better. Small business tax cuts, accelerated depreciation for capital investments, larger tax cuts for individuals. Sending 580 million in stimulus money to the Detroit school district will not raise the 21% graduation rate or create any jobs. The system is broken and all of the money in the world will not fix it. Multiply that by all of the other big city failed schools and you know one big hole where the money is going. Fund low interest loans to small business start ups. Let the government be used as the source of venture capital. Use the majority of money to stimulate job creation and not temporary spending for social programs that we cannot fund past 1 year. It is not that difficult. C + I = Output(GDP). If you raise the Consumption (put money in peoples hands) or the Investment (business capital formation) element of this equation then you get higher GDP. More people employed and the economy growing. Instead we are just transferring money from the government to make work projects that are only temporary. Now we are already talking about a second stimulus program. Why don’t we spend the first one right and we will get through this and confidence will return.
Finally, have campaign finance reform for all elected offcials. Eliminate the influence of special interest groups. Cut off the identity of the source of the funds to the candidate. Until that happens, Washington will remain broken. Still the same problem with lobbysists, just different faces.

Yes there is something else the government should do to help fix this.

STOP TRYING TO FIX IT.

thank you

There is a need to re-establish confidence in the markets (“trust” in Obama-speak) by investors, particularly the household variety. Bernanke already outlined some good ideas in the area of needed regulations.

Eliminate existence of firms “too big to fail”. Start attaching “strings” to money grants so as to be more clear that we aren’t rewarding bad behavior. Knock the size of individual components of the financial market back to the point that if they screw up and fail, that the market can absorb their failure and the firms can go through “normal” liquidation processes and the right people pay the right financial and legal penalties.

Stop with the “life is not fair” justification for rewarding the people and companies that caused the mess. There can be no trust of the financial markets until investors and the public see a clear return to “fairness”. Trust and fairness are pretty much the same thing … only politicians with their warped vision can think otherwise.

There is still the matter of stopping and leveling out the decline … but any meaningful upturn will need reestablishment of trust to become a real recovery.

The government cannot now “try something else” – trillions have already been committed in various ways and nearly all has gone to finincial entities,auto manufacturers, etc., many of whom were at least in part responsible for the mess we are now in.
At the very beginning, back in 2008, many offered the opinion that the proper solution was to provide funds directly to the economy through tax incentives and to use other direct methods to put the “firepower” where it would be most effective. Instead, the likes of AIG continue to give the finger to the taxpayers as well as to the government by maintaining excessive bonuses and other forms of largesse, this time using taxpayer money.
The economy works when there is incentive provided for business development and expansion. THOSE aspects are what create jobs – not more “transfer payments”.

Americans need to figure out what they can sell to the rest of the world at a price the rest of the world is willing to pay. How can we sustain our living standards in the long term by producing exactly what other countries can, only more expensively? So far, we’ve just gone into debt to sustain living standards and that is not a long term solution. Redistributing money on large scale from those who find a way to be competitive to those who do not isn’t either and in fact makes everyone less competitive. The core problems are finding ways to live within our means and finding a niche to be competitive in. Corrections happen and will be worse than what we’ve faced so far until we figure out the above. In the end, I think we need more market and less government. We need a correction and should let it happen.

By the way, taking on debt and inflating it away has been tried by Turkey, Italy, Zimbabwe in the extreme. Do we think of these as successful economies to emulate?

The more they fix it, the more broken it becomes. Tell us the truth behind these toxic assets, how the counter parties to these toxic assests are mostly foreign banks and investors and you have no sway over them, which is the reason you cannot solve the problem because you cannot force them to take a haircut and you cannot stomach telling the American public you are going to use our tax dollars to make foreigners whole. There is no fix, other than debt destruction and start over from scratch.

I am very much afraid of the battle cry of “Don’t just sit there, do something”. This attitude that one has to throw everything at the economy, no matter the cost, and see what sticks, is going to come back and haunt us. So much money is being printed, and the government going into debt so exponentially, is going to come back and cost us dearly. Why do we think that we can do the same thing other countries have done with their currency (starting with Germany pre-WWII) and that we are going to have better results.

It would have been much better to allow some of these banks to melt down. The costs would have been less. The housing wouldn’t have melted down if the liberal mindset hadn’t set us up for “Everyone deserves a home no matter if they can afford it or not”. There will be no handout to my wife or me, even though we are struggling to keep up. But I’m not begging – I’ll go work a second, third job. If you don’t accept a handout, you don’t have to answer to someone else.

I perhaps would accept some involvement by the government, but money is flowing like water to areas that have nothing to do with “stimulating” our economy. How is a bridge that is being built going to make sure I have a job now? It isn’t. It is only burying a pet project into something the democrats wanted all along and have the excuse to do so now.

The economy Obama isn’t any more healthy then when you derided McCain for saying so 6 months ago. In fact, I would challenge you Obama, that if you and the media hadn’t been so busy hammering home the message that we all have to be worried, causing us to pull back our spending, and starting the snowball rolling, that the economy probably wouldn’t have gone down as hard as it did. But for those who live for trouble so that they can swoop in under the disguise of “saving the US”, there has to be a catastrophe. Unfortunately, if you sow in the wind, you are going to reap a whirlwind.

Wow! Things are suddenly OK in less than a few days. We went from “very bad” to “good” just by someone saying they are profitable. Note no one has said anything about the profit numbers or the huge indebtedness to the Government. Don’t believe the all of these lies! They (the leaches of Wall Street) are only gunning to get you to buy into an upticking market. I’ll bet anyone that within a few days the market will drop like a rock once the real numbers and facts come out. Things are bad out there and the last thing this country needs is to return to the good ole days of 2 years ago. The powers that be want just that and you only have to open your ears to hear it. We can’t go back and never will. It was all an illusion. Obama is nothing more than an opportunist who only cares about himself and his tax-evading cronies.

Government needs to get out of the way and let the free markets determine the fate of those who speculated and leveraged 40 to 1. The government bailouts and fiscal stimulus packages are only subsidizing failure at the expense of the responsible. The federal deficits are growing exponentially with this year’s deficit expected to be near, if not greater than, $2Trillion. Someone has to pay for that and I think we all will with much higher inflation. Bernanke uses the analogy of your neighbor’s house burning down and says that the Fed must put out the fire lest it burn down your own house. I’m willing to take this risk just to get rid of these scoundrels that got us into this mess. I agree with Kevin Phillips that the Fed is like the fire department that is called to put out the fire and they pour gasoline on it (in the form of liquidity). We are digging a hole from which we will never be able to escape with some estimates that the federal budget deficit will not get back down to last year’s level till 2019. Meanwhile the government is wastefully spending taxpayer money with ML $4Billion in bonuses and $170Million in AIG bonuses as examples.

We’re on track for the slide in GDP to stop by June and the upturn to begin by December. Hiring will begin in Q2, and it will start to exceed layoffs in Q4.

The main thing that the federal government needs to do is to increase direct hiring and spending, even if it is only 1-year or 2-year contracts. This will make sure that the money is all spent and goes into workers’ pockets not big companies’ bank accounts. Government spending is growing, consumer spending is still going strong, but business spending is in the can, dropping to near zero in many sectors. Government must spend enough to offset the loss of business spending until the economy recovers.

Forget about tax cuts. We’ll eventually have to tax the rich to pay off all of the debt that Bush rang up.

Leave the toxic assets where they belong: in the big banks. The big banks are the bad banks, the small banks are the good banks. Reinforce the good banks and set up some new ones. We need many, small, healthy banks rather than a few, large, toxic ones.

Stay out of the housing mess. Encourage or force the lenders to sit down with the borrowers and renegotiate affordable, lower rates on existing loans. There is no need to refinance; just do rate adjustments without fees. And, do lots of short sales before the defaulting borrowers just give up and walk.

We also need to encourage the states to go to a 4-day work-week, so that they employ more people for shorter weeks rather than laying off lots of workers, like is starting to happen. Most people can survive a 20% pay cut; few can survive a 100% drop.

There is a big, growing homeless camp outside Sacramento, just like in The Grapes of Wrath. Take these decisive actions today, before things get even worse.

The view from a distance according to a Canadian living in Paris, france is: Focus on what is broken and fix it.

Real estate Market: The issue is that there are far too many homes on the market and more coming on every day. Washington should start entering the auction market at the low end. Buying up derelict, or very cheap properties. They will not have to buy many before the market at the low end will find a floor. They can tear them down,or rent them for a low price to war veterans, it doesn’t matter. The key is getting them off the market. By clearing the low end and establishing a floor in the market, the mid-market will stabilise and then lending can restart.

Stimulus: Don’t use tax credits. they are badly targetted and when everyone is focused on reducing personal debt, most of the tax credits will go directly to reduce credit card balances with minimal impact on the economy.

GM: Get ready for GM to fail. This means that the government needs to be clear about what it will help to survive. Probably Chevrolet could be saved by merging with something else. Then focus aid at the auto parts industry so that when GM fails, the parts manufactures don’t take Ford and Chrysler down as well. The reduced capacity caused by the closure of most of GM will leave room for recovery to Ford and Chrysler. Better two strong than 3 weak companies.

Cure the addiction to cheap oil. If nothing is done in this regard, then just as the economy starts to recover, oil prices will leap up and the american economy will take a kick in the head. By taxing oil more heavily (I currently pay about $5.70 a gallon in France), the economy will implement more energy efficient solutions. The key for business is certainty, as long as business knows that tax on fuel will gradually increase over the next 10 years, they will take steps to reduce consumption. This would also help to clear the deficit which may not be a problem today, but it will be if nothing is done.

Last item: Don’t become protectionist, it won’t help anybody to attack your close trading partners (like us northerners!)

Just a suggestion – a method of dealing with toxic assets the banks are holding:

• Let the banks lend money to an investment entity (IE) – government-sponsored, or government-contracted – which would purchase the assets and hold them to maturity.
• The assets would be sold at a discount, but not a big one – maybe 5%, or less – so that the IE would have some equity, and the sale would not hit the bank with an inordinately large loss of reserves.
• The terms of the loan would be set up so that the payments are less than the current income on the assets, so that a reserve could be built up by the IE to be able to absorb defaults.
• The loans would be guaranteed by the US Treasury/FNMA/FHLMC.

The good effects of this:

• This converts toxic assets to a perfectly good government-backed loan, non-securitized, and performing. The bank’s reserves would be known, and the bank could get back to doing what banks do.
• The government would not be throwing huge amounts of money at the problem – it’s handled within the financial system.
• The market values are stabilized – the IE would have paid non-fire-sale price, so all others holding those assets could either sell to the IE at that price, or hold at the established market value.
• The IE would value the assets as hold-to-maturity, so the value would remain as the original cost as long as the assets perform. If the asset defaults, the losses would be taken, but loan payments would still be made, as guaranteed by the Treasury, and the original reserve and payments from performing assets should minimize the Treasury’s cost.
• The government would only be involved at the level of making sure the loan payments are made. As long as the income from performing assets, and the initial reserves, is more than the payments due, the government need not be tapped.

Certainly lots of details need to be worked out, but that’s why these guys get the big bucks. If you think any of this has merit, let’s try to get it in front of someone who could do something about it.

1. Quit rewarding bad behavior in forms of bailouts for the most appalling failures of our economic system. Entities that made poor descisions need to suffer the consequences, that’s true for GM, AIG, CITI as well as for the average homedebtor that that went in over their head. They’ve already proved that they are grossly incompetent and can’t handle money. Quit giving them more.
2. Lower taxes on the lower income brackets and business. That gets people spending and business hiring, or at least quit laying people off.
3. A push toward energy independance via Solar, Wind, Nuclear and any other long term sustainable energy source and consevation.
4. Reduce military and entitlement spending.
5. Financial reform. Severly limit leverage for coorporate and private borrowers. Regulate CDS as insurance. Require 25% down for all home purchases, no exception. No leverage ratio larger than 4 in the corporate world.
6. Prosecute and jail the fraudsters that brought about this disaster. Strip them of all their assets to help pay for the damage they caused.
7. Quit borrowing money at the federal level. Future generations will neither be willing nor able to pay back the debt. This borrowing and spending spree won’t end well. Too much debt got us into this situation, it certainly won’t get us out of it.
8. Enforce stiff tariffs on countries that enploy slave labor (or equivalent), and enfringe on intellectual property rights. As far as free trade is concerned, you play by the rules or you don’t play at all.

How ’bout provide a modest safety net and otherwise get out of the way and let free markets sort things out.