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precisionlabradors
01-29-2009, 12:18 PM
we all have our opinions regarding what caused the crappy condition of the economy;its been covered ad nauseum. without going into blaming for the current condition, what are some viable options, according to you, to fix the current state of our nation's and world's economy?

this is a serious question. there is a ton of talk about what we shouldn't do. what should we do instead?
________
Mercedes-benz w113 (http://www.mercedes-wiki.com/wiki/Mercedes-Benz_W113)

Steve Amrein
01-29-2009, 01:01 PM
This will be far to simplistic but at least in my head I have these for examples. I would like to buy a new car and I assume GM would like to sell me one. Rather than just giving GM the money and let them blow it in a few months and still not sell any cars. Why not give me a rebate large enough that I would go buy a car. The the salesman and people at the dealer make money as well as the finance people and maybe even GM who used to be a viable company. Example 2 Instead of giving banks money who are now doing squat to lend money or worse deny companies access to their line of credit so the can make payroll and pay bills and remain in business. Or home owners who have lost their jobs because of the bank crisis that give or at least help the home owner keep the house and repay the bank the money.

Franco
01-29-2009, 01:02 PM
we all have our opinions regarding what caused the crappy condition of the economy;its been covered ad nauseum. without going into blaming for the current condition, what are some viable options, according to you, to fix the current state of our nation's and world's economy?

this is a serious question. there is a ton of talk about what we shouldn't do. what should we do instead?

Great question!

First, we should know that throwing money at any problem is not the way to fix it. It will only prolong the problem and make it even bigger.

What we need to do is;
1) Let the chips fall where they may. If I have my retirement money in bad investments, then shame on me, I pay the consequences. A lot of innocent by-standers will get hurt but, not as badly as they will get hurt in the near future in our government doesn't address real issues with real solutions. Throwing money at the problem is not a real solution. If our Auto industry is inept, then let them fail. Same for banks, financial institutions, airlines etc. By doing so, only those with good business models will survive and those without good products will fail. Same for homeowners that bought more house than they could afford. We need to return to a free market economy.
2) We need to fire everyone on Capitol Hill and start over with non-career politicians. Then elect Senators and Congressmen who don't want or need to make a living off of productive Americans. Strict term limits of 4 to 6 years is a must!
3) Secure our interest. That means securing our borders because the illegal problem is the biggest problem facing many major cities and states. Lets take care of our own first! Securing our interest also means having the best military with the best equipment we can supply them with. A strong military not only helps secure peace but also allows us to implement "good" around the world. This 900 billion bailout will come largely at our military's expense.
4) Put a stop to the entitlement mentallity that has taken this county over. We were strongest when we knew we had to do it on our own. Entitlements only makes us weaker as individuals and as a country.


I would say this is a good start.

Ken Newcomb
01-29-2009, 01:16 PM
First I think you leave it alone and let it sort itself out. Yes some businesses will fail and people will struggle but thats the way it goes.

Second, don't ever believe that those that got us in could ever get us out by spending OUR money.

Third, if you want to help people then find a way to keep gas at about $1.50/gal. After a short time people will become more comfortable with that extra money in their pocket. They will travel, buy goods and start enjoying life again.

Franco
01-29-2009, 01:24 PM
Third, if you want to help people then find a way to keep gas at about $1.50/gal. .



$1.50 gas is not feasable. That is until we have an alternative source of energy. Oil companies, refieneries and gas retailers can't make a slim profit when oil drops below $50. a barrel. That's why there are so many layoffs now across the country in the oil field. $2.00 a gallon would be a win-win situation.

Exxon's profits have little to do $50. per barrel and more to do with the speculators driving the prices to above $70 per barrel. Remember, it wasn't long ago the the speculators drove the price to $145. per barrel!

ErinsEdge
01-29-2009, 01:27 PM
Cut the capital gains tax for a year or two.

Ken Newcomb
01-29-2009, 01:43 PM
If $2 is the magic number I could sure live with that. For me, during duck season alone that price saves me nearly $100 per week just in truck and boat fuel. That money won't sit in my wallet forever it will end up somewhere eventually.

YardleyLabs
01-29-2009, 02:23 PM
The answer depends on how severe you believe the problems are. If this is a normal downturn, there is no reason to do much at all. Things will work out in time. If you believe that problems are deeper and reflect a collapse of our credit driven economy, doing nothing will probably drive us into a full-fledged depression. In that case, there are no answers that are very good. It took a world war to bring us out of the depression in the 30's.

I believe that there are two fundamental problems with our current economy.

First, for about 20 years the growth in our economy has been financed primarily through debt -- governmental and personal -- rather than through current income. Effectively, we have been financing current consumption by liquidating assets that took decades to accumulate and by giving pledges against future revenues.

Second, we have become addicted, through the stock market, to a rate of profit growth that is many times greater than the rate of real growth in the economy. That is the economic equivalent of a perpetual motion machine and cannot be maintained.

Unfortunately, our deficit financing caught up to us. Two thirds of our economic activity is driven by consumer spending financed by debt that was based largely on home equity. That credit has disappeared and it is not coming back.

There is no long term way to return the economy to the level that was being financed by artificial debt stimulants since the stimulants are unsustainable. The process of adjusting to a life where we live within our means as individuals and as a society will involve some fairly severe adjustments.

A stimulus program can help. However, whatever is done in the stimulus program must be structured so that it promotes real future growth without incurring future recurring costs or losses of revenue. A short term capital project that produces current jobs and generates economic benefits in the long term can help. Spending money to increase an entitlement program or to institute a new permanent tax cut would be bad investments because they create recurring costs, adding to both current and future deficits. I also believe that efforts to stimulate a return past policies of easy credit will fail because the reality is that fewer and fewer people are actually credit worthy.

In conjunction with a stimulus program, we will inevitably continue the policies of the last several years to "stiff" investors in our debt. We will continue to see our currency devalued. Those owning our national debt -- primarily China and middle eastern countries -- will be repaid in discounted dollars. Their growth will slow and they will be less willing to give us future credit. The cost of imported goods will go up while the cost of goods that we export will go down with resulting increases in export activity.

In addition, investors in our financial services industry will end up taking a bath as billions in consumer debt has to be written off. The only reason I can see for "bailing out" financial institutions would be if, at the same time, they write off non-recoverable debts with negotiated settlements on bad loans. This is an area with lots of risks -- including moral hazard risks -- but may be needed to allow a future recovery.

Franco
01-29-2009, 02:43 PM
The answer depends on how severe you believe the problems are.
It is alot worse than what we've been told. Maybe we've been kept in the dark to avoid a panic. I was meeting with a bank president Tuesday morning and we were having this conversation. It started because his bank is one of the few that won't accept the TARP bailout as they don't need it. He was showing me on FDIC.gov the banks in trouble that haven't made the news yet(the general public has access to FDIC.gov). I'll throw out a bank getting ready to go bellyup that hasn't made the news yet, Regions Bank. They are a large bank serving the southeast with many branches. They are just one of many in trouble and I would suggest everyone look to see the financial health of their own bank. One clue if your bank is in trouble is if the accepted TARP money. Not that accepting it means they will go out of business but, they are hurting. My point is that this financial mess is beyond repair. It's been going on since the mid 80's and it has caught up with us. My question is; Is it better to take it on now or throw money at it and prolong the inevitable?

YardleyLabs
01-29-2009, 02:53 PM
It is alot worse than what we've been told. Maybe we've been kept in the dark to avoid a panic. I was meeting with a bank president Tuesday morning and we were having this conversation. It started because his bank is one of the few that won't accept the TARP bailout as they don't need it. He was showing me on FDIC.org the banks in trouble that haven't made the news yet(the general public has access to FDIC.org). I'll throw out a bank getting ready to go bellyup that hasn't made the news yet, Regions Bank. They are a large bank serving the southeast with many branches. They are just one of many in trouble and I would suggest everyone look to see the financial health of their own bank. One clue if your bank is in trouble is if the accepted TARP money. Not that accepting it means they will go out of business but, they are hurting. My point is that this financial mess is beyond repair. It's been going on since the mid 80's and it has caught up with us. My question is; Is it better to take it on now or throw money at it and prolong the inevitable?

I agree with you on the severity of the problem. I think we are going to "take it on now" whether we want to or not. However, massive job losses, while they might help a individual company, are going to make the overall economic problems worse.

Franco
01-29-2009, 03:04 PM
True and in all that smoke and fire will be opportunities.For instance in my field, all the major radio broadcasters are big bean-counting conglomorates. It became that way in 1996 via degreulation. A station worth 2million, was now worth 6million. It became a sellers market. That same station today is still worth only 2million but the debt of the broadcasters is that they still owe 6million for the station. The big conglomorates have flooded the market with radio stations for sale. If they don't sell them soon at thier asking price, they will eventually be liquadated by the banks holding the paper. It gives a little guy like me an opportunity to own my own radio station.

Henry V
01-29-2009, 10:39 PM
This will be far to simplistic but at least in my head I have these for examples. I would like to buy a new car and I assume GM would like to sell me one. Rather than just giving GM the money and let them blow it in a few months and still not sell any cars. Why not give me a rebate large enough that I would go buy a car. The the salesman and people at the dealer make money as well as the finance people and maybe even GM who used to be a viable company. Example 2 Instead of giving banks money who are now doing squat to lend money or worse deny companies access to their line of credit so the can make payroll and pay bills and remain in business. Or home owners who have lost their jobs because of the bank crisis that give or at least help the home owner keep the house and repay the bank the money.

see http://money.cnn.com/2009/01/23/autos/government_car_incentives/index.htm

Steve Amrein
01-30-2009, 09:26 AM
see http://money.cnn.com/2009/01/23/autos/government_car_incentives/index.htm


With a savings of 1300.00 on the sale of a new car that cost 25,000.00 I wont be running out any time soon. That wont cover the sales tax much less the triple taxation on personal property tax. In my state the sale tax is 7.375 for my area thats 1843.75 and the additional property tax would be about 200 bucks per year. That does not include the 30 -50 depreciation in one year that is NOT tax deductable. Oh and tempt me with the intrest being deducted. lets see ZERO percent financing for 60 months would save me how much ?


While I applaud their effort the math sucks. How about a 10 g rebate and a card I can swipe at the pump that deletes the FORTY TWO FREAKIN CENTS PER GALLON TAX and can deduct the depriciation on said money pit.

Nor_Cal_Angler
01-30-2009, 10:53 AM
With a savings of 1300.00 on the sale of a new car that cost 25,000.00 I wont be running out any time soon. That wont cover the sales tax much less the triple taxation on personal property tax. In my state the sale tax is 7.375 for my area thats 1843.75 and the additional property tax would be about 200 bucks per year. That does not include the 30 -50 depreciation in one year that is NOT tax deductable. Oh and tempt me with the intrest being deducted. lets see ZERO percent financing for 60 months would save me how much ?


While I applaud their effort the math sucks. How about a 10 g rebate and a card I can swipe at the pump that deletes the FORTY TWO FREAKIN CENTS PER GALLON TAX and can deduct the depriciation on said money pit.

no, no, no, no...you make way to much sense!!!!!!

NCA

PS. Try 8.25% sales tax ready to go to 10% in 09'

kjrice
01-30-2009, 11:21 AM
1. Home values should not be based on bank short-sales

2. Home values should not be based on foreclosures

3. It is criminal what the government is doing with our tax dollars.

4. Keep the healthy financial institutions going and let he FDIC handle the death toll.

5. I do not think certain industries should be traded on Wall St. like Fannie Mae and Freddie Mac and some utilities.

Jim Pickering
01-30-2009, 02:40 PM
(the general public has access to FDIC.gov).


Help Please
www.FDIC.gov is certainly available to the public, but I cannot find a list of banks that are in trouble. Would you please point me to the correct page or link to find this list? There is a list of Banks already failed and closed, but I find nothing on banks about to go under.


Thanks Kindly,

Franco
01-30-2009, 03:26 PM
Help Please
www.FDIC.gov (http://www.FDIC.gov) is certainly available to the public, but I cannot find a list of banks that are in trouble. Would you please point me to the correct page or link to find this list? There is a list of Banks already failed and closed, but I find nothing on banks about to go under.


Thanks Kindly,

I've been on FDIC.gov for the last 20 minutes trying to find the same information my banker showed me earlier in the week in his office. First he showed me the banks that have either accepted or have applied for TARP funds. Then he showed one bank here in the southeast that was is deep du-du with a high level of bad loans. The bank I mentioned has not annouced anything yet as banks generally don't say anything until the FDIC locks their doors. He said they would be next to go. I'll PM you with more information as I will probably see him tomorrow at a pheasant tower shoot.

K G
01-30-2009, 03:33 PM
In rereading what Franco said, his client was showing him a list of "banks in trouble," meaning (it appears) that those were banks that in his client's opinion were "in trouble."


It is alot worse than what we've been told. Maybe we've been kept in the dark to avoid a panic. I was meeting with a bank president Tuesday morning and we were having this conversation. It started because his bank is one of the few that won't accept the TARP bailout as they don't need it. He was showing me on FDIC.gov the banks in trouble that haven't made the news yet(the general public has access to FDIC.gov). I'll throw out a bank getting ready to go bellyup that hasn't made the news yet, Regions Bank. They are a large bank serving the southeast with many branches. They are just one of many in trouble and I would suggest everyone look to see the financial health of their own bank. One clue if your bank is in trouble is if the accepted TARP money. Not that accepting it means they will go out of business but, they are hurting. My point is that this financial mess is beyond repair. It's been going on since the mid 80's and it has caught up with us. My question is; Is it better to take it on now or throw money at it and prolong the inevitable?

Franco's been around the block enough times to know that speculation will get you sued, that there is no published "list" of banks in trouble. "Opinion" is one thing, "fact" is another.

Many banks were TOLD to take the money, Franco, whether they needed it or not. The Treasury Dept. had more money than banks wanted and when it looked like they'd have money left over, they didn't want to look like they didn't know what they were doing (any more than was already obvious) so they called up solvent banks and said "Here....it's just a few million....take it....help us out" and they did.

Loose lips sink bank presidents regards,

kg

Franco
01-30-2009, 03:34 PM
KG, you'd have to spell my name correctly for them to find me as Franco is but a nickname!;-)

You can research Regions on the site, checkout their financial statement.

K G
01-30-2009, 03:48 PM
Is this close enough, Franco? ;-)

http://www.zoominfo.com/people/Da%20Roza_Francis_924747484.aspx

kg

Franco
01-30-2009, 03:58 PM
cool site.