An Economy on the Brink

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We are in great perils in a world with an American debt of more than ten trillion, two endless wars and a nearly collapsed wall street and with a main street that can only hope to pay it's bills and keep it’s homes from being foreclosed on.
I watched Senator McCain and my questions remain as to how he is going to help the economy recover, or get more health insurance available to the 47 million uninsured folks, or stop the illegal immigration. He is a genuine hero and his first love is the need for defense, but he needed to assure the nation that the BushCheneyMcCain riff now happening with Russia does not escalate to a new COLD WAR. He failed to address the danger of the national debt and the danger of a new weapons buildup will cause our economy. The WAR mentality I saw all during this convention speaks very loud as to what he intends to do as President. The financing of more debt has to come from somewhere and cutting more corporate taxes will only weaken our defense capabilities. President Reagan is McCain’s hero and his guide on defense, but McCain forgets that the five trillion spent by Reagan for the first COLD WAR is yet to be paid for. McCain supported the “SPEND and BORROW “, policies of Reagan Republicans that we can not continue to afford. We as a nation are being swallowed up by all the debt, both national and personal. At some point the rest of the world will just stop loaning us more money. All one has to do is watch any of the financial news channels to hear the problems that are going to come to ahead and be required to be dealt with under the next administration.
To John McCain where is the BEEF? All I saw is more of the same Bush/Cheney on defense, the economy and the future. Governor Palin is only the VP on the ticket not the POTUS her words are just that words that are pleasant to the ear but quickly fade away as the NEOCONS replace reason with fear and logic with spin.

AllenCharles of FL 10:11AM September 08, 2008

The tax code should create financial incentives in support of America's best interest. Admittedly altering taxes isn't a panacea for our economy but it would promote a better long-term outcome for our citizens.
The tax code should:
1) discourage speculators from the housing market. Speculators (i.e. those that were "flipping homes" for profit only) do not add value to the "home" product. They're middle-men that artificially drive up prices via extra demand pressure. The tax code should encourage long-term homeownership.
2) strongly support U.S. products and manufacturers. There should be a strong tax disincentive for U.S. companies to move off-shore and/or outsource jobs. The tax code should make it preferable for companies to stay within the U.S.
3) put a large tax on gas. This would provide much needed money to improve our infrastructure and improve our public transportation network. Also, it would make finding alternative fuel a REAL top priority. Waiting for the oil companies to come up with an alternative fuel is like asking the fox that is already guarding the hen house to come up with another food source (why would he?). Finally, we're currently borrowing money from China to buy fuel from Petro-dictators. This is really bad fiscal and foreign policy.
The tax code isn't a panacea for our problems but it does affect individual and corporate behavior. The tax code should be written for America's best interest not written by political and corporate lobbyists.

brian of CO 11:54AM August 16, 2008

I have some questions that I never see or hear asked.
According to the US Treasury Department site the federal government has not issued any money, other than coins which make up less than ½ of one percent of the nations total money supply, since 1971 when the last US government notes were retired. Meaning the Federal Reserve and its member banks create 99.5 % of the nations money supply, this moneyis created as loans, in the case of the Federal Reserve to US government and member banks, in the case of commercial banks to corporations, businesses and individuals. These loans must be repaid with interest, but the banks only create the principal of the loans but no money to pay the interest.
My first question: “what is the source of money required to pay the interest on all the loans?”
For example, if the total money supply is $40 trillion and the interest rate is 5% per annum (just to keep the math simple in this example) the interest payment for the year is $2 trillion. The only source of money is the existing money supply. If interest is deducted from the money supply, then there is insufficient money left to repay the principal, making it impossible honor all the loan contracts.
If the banks originate more loans to get the money to pay the interest, robbing Peter to pay Paul, they will have to keep repeating that action to stay ahead of the game, creating an ever expanding pyramid of debt.
My second question: “Are the Federal Reserve and the member banks creating a pyramid or Ponzi Scheme, and blaming the nation’s economic difficulty of their patrons , the government, banking regulations and the people?”

Bill Parks of MD 9:16PM August 15, 2008

WEll this is it for America , the crash has only begun , massive writedowns are coming in the masses , everyday spells new disaster , America will implode from within , in the time frame of 1-3 years , so start storing food , ammo and rifle ,

of 8:05AM August 15, 2008

This is not an economic problem but instead a demogrphic and technilogical shift. First the population has shifted to reduce new household formation reducing the need for housing for the first time since the 1930's. Second technology changed starting with desktop publishing and the Internet and the people who are on top of the top down media food chain are in a depresion. "When your neighbor loses his job it is a recession. When you lose your job it is a depression." From the invention of the rotary press in the early nineteenth century the economies of scale were for the top down orginizational structure. The Internet eliminated that and you can not change 175 years worth of trends without disruption.
"Creative distruction" makes for interesting times in the Chinese since of the word "interesting." Newt Gingrich has said that the next twenty years will be as much technilogical change as has occured since Sir Issac Newton. He is right.

Gregory Franke of CT 9:32AM August 14, 2008

Its time for cronyism and unregulated accountancy to stop. Wall street has shown the market can only do one thing well and that is destroy the market. We are way past time where adult supervision is required, if the regulators would have shown oversight as required, we wouldn't be in this pickle.
Now that the stupid, the greedy and the rich have had their way with the dollar, and the real estate market, we are left to right this ship and make her seaworthy. We can't sell houses to a poor man without a job, nor can we hope to keep those in their houses with the economy on a ceaseless downward spiral.
Someone in charge, someone who's paid to make public policy, like say Congress or the President, might get off their rears, stop preening like show ponies and actually commit to changing the way we do things in a positive way.
This country needs a high speed rail system. An electric train that doesn't run on oil, this presents several interwoven interest in one project. Alternative energy, both wind and solar, as well as tidal could be used to power such a system. It could be used to haul freight reducing the need to truck perishables, saving oil, and reducing traffic on congested and badly maintained highways.
Less weight on the road, means the bridges won't fall quite so often, who knows maybe they will get around to fixing them if they have the extra time.
A large capacity rail system, would employ many people in all areas of its conception and build out as well as day to day operations, this would help employment in the U.S. which would stabilize this drunken lurching economy.
Many people would benefit from such a system and due to the nature of government oversight, I'm sure lots of fat cat companies could rape the taxpayers for even more fat contracts, so everybody would be happy. The companies would then have more money to bribe politicians and reporters, so the wealth would get distributed and capitalism would reign once again on our fair nation.
In closing let me emphasize that America needs high paying jobs that can't be exported overseas, this project could provide that as well as improving American infrastructure and reducing American dependence on foreign energy sources. It is truly a great thing for all Americans, so in all likelyhood it will never be done and the economy will continue to sink into the economic toilet that our finest leadership managed to put us in.

Jane Quatam of CA 6:39PM August 12, 2008

The only hope to climb out of this growing Grand Canyon
of jobs drying up is to create tens of millions of jobs
that pay a living wage that can support a family and
that pays FULL health benefits and enough to buy a house (pay mortgage) and pay skyrocketing gasoline prices and skyrocketing
electricity prices.
Without jobs nothing else matters because if people
don't have jobs they will not spend and so bankruptcies
will skyrocket.
Without jobs everything will close. I'm already seeing
busineses evaporate every week in California.
Everything else is rhetoric. America needs a New Deal with
career full-time jobs and not part-time jobs that are dead-end
Joe Mcjobs.
The future of America depends on Jobs in America. Health Benefits and affordable loans and affordable gasoline and affordable cars with good gas mileage.

Blake Southwood of CA 2:48PM August 12, 2008

re/Fatesrider of CA
I have read many responses to the housing crisis,yours was the most intelligent one!I have lived the american dream,I emigrated (legally)in 1963,worked and saved my money and in 1973 was able to buy a small,one room house,certainly not a status symbol!It measured 20 by 24ft and was built with salvaged lumber after a 1960 hurricane,the owner/builder told me the only thing he bought was the plywood for the ceiling.He later added a small addition for a bait and tackle shop.I was able to pay 50%down and 200$ a month for 6 1/2 years for a total of $25000
The property was located in the Florida keys and was the only house on the bayside of the island so I had plenty of privacy,I kept the place for 25 years and truly enjoyed it,I would have loved to stay there for the rest of my living days but I was worried about losing the house to a hurricane.For many years my bookshelves consisted of cement blocks and 2 by 6ses and I never had heat or air conditioning and hardly ever missed it,I sold the place for ten times more than I paid for it and bougth a house on the mainland where I am hopefully safer from storms.I was very lucky that I stayed healthy all these years and never had to mortgage the house to pay medical bills and hopefully will never have to!

Peter Hofstetter of FL 2:18PM August 12, 2008

It will end by housing becoming affordable again, like it used to be. All speculative bubbles end when they run out of suckers.

Peter Christiansen of CA 12:25PM August 12, 2008

You are just like the rest of the news groups out there,DOOM AND GLOOM.If you can find something bad to write about you will, just like the rest of them.That is why i don't subscribe to the local newspaper,I can read the same old junk on the INTERNET.Wake up America the news media is our enemy and is doing it's best to destroy America.

Bob D of KY 9:25AM August 12, 2008