“We’re sitting on a Financial Powder Keg” — Richard C. Shelby. Democrats declare Socialism is the answer.
As in, we’re living on the edge of a financial crisis that’s getting ready to blow.
Our economy is so stressed there’s nothing the U.S. Government can do to fix it.
No more wiggle room on interest rates. They’ve been lowered to combat the mortgage crisis, and to fight the specter of a recession.
Because we can’t raise interest rates, inflation is roaring, riding the back of fuel costs that drive up…every other cost. Food, clothing, shelter, the basics of survival, all of these are directly affected by oil prices.
Federal Reserve Chairman Ben Bernanke…
Bernanke warned that the U.S. economy faces “numerous difficulties,” that the outlook for inflation is unclear and that “financial markets and institutions remain under considerable stress.”
President Bush…
“The president doesn’t have a magic wand.” He was answering a question about soaring fuel prices but his remarks seemed to sum up the government’s overall predicament.
Budget deficits, skyrocketing. Stocks, down, and jittery. Freddie Mac and Fannie Mae (holding or guaranteeing 50% of our home mortgages) stocks are down 80%, and investors aren’t selling bonds to finance new mortgages. That’s not good news.
IndyMac failed last week. Police were called yesterday to tell people lined up outside a branch (since 1:00 Monday morning) to keep calm or their asses would be jailed. Bush, yesterday, on calmness…
“I happened to witness a bank run in Midland, Texas, one time. I’ll never forget the guy standing in the bank lobby saying, your deposits are good. We got you insured. You don’t have to worry about it if you got less than $100,000 in the bank. The problem was, people didn’t hear. And there’s a … nervousness. My hope is, is that people take a deep breath and realize that their deposits are protected by our government.”
Of $19 billion in IndyMac deposits, $1 billion won’t be covered under FDIC guarantees. People should’ve paid more attention to the $100K ceiling that the FDIC imposes. Tough luck.
Bernanke…
“Financial stability is critical to economic stability.”
Really, Bernanke? Who knew?
So into this mess steps the Democrats, ready to pick up the pieces and MoveOn.
Move. On. To what?
To what the leftists desire, of course. Move on to a more socialist sort of nation. With newly nationalized welfare (sorry, ‘volunteer’) programs, costly and unaffordable universal health care, and as-yet unannounced (but we know they’re out there) programs and bailouts: amounting to a costly New O! Deal. We hear Baracky on the stump: a drumbeat of socialism, populism, and ever-flipping salesmanship.
Nothing new, but in today’s troubled economic times, nearly everyone is ripe for populist picking. Democrats have always used the carrot of socialism to attract easy votes. Always. We are raising a generation of kids who believe the government exists only to respond to their ‘needs’. They want not just a seldom-used safety net, but a permanent cradle and a warm blanket, forget any responsibility, just give ‘em an easy life.
“And young Americans seem readier than older Americans to turn to government for the solution. Eighty-six percent say more government programs should help those struggling under the current economic conditions.”
The Democrat’s use of socialism to attract minority voters is working…
“Ninety-six percent of African-Americans and 88 percent of Latinos believe the economy is on the wrong track. Congress is not the only political institution that gets a share of the blame:. Almost 80 percent of African-Americans say the president is hindering their pursuit of economic security.”
So, to pay for these excesses, we’ll tax more of the ‘rich’.
Make no mistake about it: Obama’s plan to raise taxes on households making more than $250,000 will raise taxes on most small-business profits in America.What type of tax rate are we talking about? Currently, S corporations face a top tax rate of 35 percent, while sole proprietors and general partners face a tax rate of 37.9 percent (since they’re responsible for paying both income tax and the Medicare component of the payroll tax).
Under Obama’s plan to let the scheduled 2011 tax rate hikes occur, and his plan to raise the self-employment tax on those making more than $250,000, the S corporation rate would rise from 35 percent to 39.6 percent. The sole proprietor and partner rate would rise from 37.9 percent all the way up to a staggering 50.3 percent. Many Democrats in Congress have proposed making all small businesses (including S corporations) pay this 50-plus percent rate. A small business tax rate that high would be the highest marginal rate faced by them in nearly a quarter-century.
We’ll see plenty of good businesses fail, and the incentives to start a new business..well, who wants to work anyways?
Just let someone else pay your way.
It’s the New O! Deal.
Serr8d, I totally disagree with your assessment of our economic situation. While inflation and unemployment have both risen in recent months, still neither are high. In fact both measures, the unemployment rate and the CPI are low, according to historical standards. We still have not had even one quarter of negative GDP growth, much less the two required to be a recession. Most Americans are not getting their homes foreclosed. There is really only a handful of Real Estate markets that are undergoing a huge correction. The rest have just settled down from previous unheard of growth. The ones that are correcting, needed to correct, because they were artificially high (bubble). The bottom was bound to fall out.
The sky aint falling. These are not the best of times, but they certainly are not the worst. We are just experiencing a natural downturn in the business cycle. It happens every few years. Its what economies do. The same thing was happening during the runup to the 2000 election. The downturn will eventually trend upward, then it will go down again.
Take the increase in gas prices away and this economy is as good as it was two years ago. Of course you will always have the Tgirschs of the world point out that a few people are making too much money and should not be allowed to get so rich. There will always be something to bitch about.
As I am writing all of this, I have to say that things are very difficult for me personally, but I don’t base my economic analysis on personal anecdotes. I look at numbers, data, the same measures that have been used for years and years. Those numbers, that data, does not look that bad. The thing that looks bad right now is the price of gas, and also grocery items that are dependent on low fuel costs and use of corn.
McCain, as much of a piece of crap that he is, has promised more drilling and exploration, an end to ethanol subsidies, and an end to the tariff on Brazilian sugar ethanol. Those three things solve things pretty much.
Barack, on the other hand, is beholden to the corn lobby (big Iowa win) and will neither stop subsidizing corn ethanol, nor end the tariff on Brazilian ethanol, a tariff which in itself is nothing but another form of a subsidy. By the way, the WTO, has decided that the tariff may violate international trade law. Also, Barack, being beholden to the anti-capitalists and the enviro-wackos, opposes drilling and exploration just about anywhere. Basically Barack, just like Carter, thinks we all ought to suck it up. As for the poor, well he’ll just send them a check he confiscated from the evil rich.
Guys,
The system is broken, maybe beyond repair. Socialism is not the culprit. You really need to turn off Rush Limbaugh.
It is O.K. to reap reward in the form of profits proportionate to the value one’s goods and/or services brings to the market. Modern predatory capitalism is not predicated to adhereing to the principles of sound market economics.
Simply put, when the system becomes overly top heavy, i.e., when enough people get priced out of the market in staple commodities, it will collapse under its own weight.
We may not be there yet, but that is the direction in which we are heading.
Obama is right, change is needed. Maybe not the change you want, but well, I really don’t give a shit what you want.
[…] want to expand on some things I said in this comment to Serr8d’s last post. No I don’t think we are in a crisis and I certainly do not […]
HBK, Hendrix, ROR, you aren’t as nice as you used to be. At MCB, you were one of my favorite commenters/arguers. I still look forward to your comments, generally speaking, but you seem much more pissed these days.
Maybe I was nicer before people starting telling me to get the hell out of their country, or chest thumping chickenhawk bullies started getting praised for impersonating active duty military and making maniacal rants.
Praising fugitives like Karl Rove and casually dismissing the ever-growing cloud of smoke surrounding the executive branch as mere BDS or leftist kookism is pretty disturbing. Add to all that impugning my basic moral integrity based on things like religion and political philosophy, and well no, I am not really concerned with being nice.
Get used to it, HBK.
You should hear truth sometimes. Shut off the Gleen Greenwald[s] and the MSM’s drumbeat of negativism over Bush and the Iraq and Afghanistan wars. Start thinking and acting more like a proud citizen, and not just a support mouthpiece for al Qaeda (who does appreciate your concern).
I’ll pray for your soul.