So .. what happens after we blow through 2 trillion bucks, and people still can't buy stuff?

[SoCalDem]

The banks will be flush wish OUR cash, or maybe not..after they replace the trash cans & redecorate their offices, and buy up every OTHER bank they can get their hands on..

The car companies will still be making cars too expensive for most to buy, and just too many..

The big boxes will still stand guard at the edges of every town big enough for a few stoplights, even though grass may be growing in the empty pot-holed parking lots..

Dads will be beating a path to the mailbox, praying that the unemployment check might be there..

Moms will be hiding weapons & drugs from depressed Dad, when she's not fielding questions from the daycare provider, asking where her kids are..

Mom & Dad..reunited for some alone time..watching daytime TV, and polishing up the resumes..and wondering just how long it takes for a foreclosure to happen..

In considerate "families" the kids & old people eat first..Too bad our government does not see the people as family.. In this case, they hired caterers, and the caterers ate all the food..

in the end, nothing has been "solved"..

The object was to recapitalize the banks and get the economy moving, but by bypassing the people who OWE more than they can pay, or who have lost jobs, and cannot pay, they did it backwards.

now they are sending shitloads of cash to the states.. Will the states be any different from the banks? States are run by politicians, and they will dole out the money to their pals....like they have always done..again, bypassing the ordinary people.

Demand drives hiring..."Shovel-ready" projects will help a select group of people, but not a broad enough segment of the population.

We're being given aspirin, when chemotherapy is needed.

The sad truth is that we cannot "go back" to our "robust economy", because it was all a SHAM.. We know it now, and so does everyone esle we did business with.. Those countries are sinking under the weight of all our worthless "paper", so what exactly is the "plan"..?

What do we make, that people are clamoring to buy?
Are we ready to go back to the land, and live a subsistence lifestyle like many did decades ago? The "land" is full of empty Mcmansions and toxic waste sites, anyway.

Do we all go back to school and "re-train"? For WHAT?? A whole bunch of people "re-trained" for a marvelous career in IT..which was sent to India, Bangladesh, Indonesia, etc, as soon as people tried to find jobs in that "new profession" they learned.

Do we all enter the "medical" field? Got news for ya.. as people lose their medical insurance, those fields will start to empty out too, no matter how many people "need" care.. I've already read about small hospitals that may have to close, because most of THEIR income comes from insurance reimbursement.

Do we become truckers?..Merchandise has to have buyers, and open stores to receive the stuff, or there's no reason to haul it around.

Unless we all put on our new sneakers & track suits, while we wait for the comet to come for us, we will have to "do something"..but what is that?

Are we going to remain a "consumer society" with this re-invention, or have we learned our lesson?

But what will we do?

[izzie]

1. Maybe we could cut grass at some CEO's $10 M dollar home.

Don't you just love these bankers? I re-call when I was in college the joke was the stupid kids went to the school of bus. If that is true and I really never believed it we seem to have got them to all raise to the top of the barrel at the same time. It is so nice to see these dubbers clean out the Am. tax payers and Congress not do one thing to find the money. I guess we get what we vote for. With Bush history in business deals did any one really think that any thing would be different on Wall St.???????????

[DRoseDARs]

3. Well, French revolutionaries certainly had their own ideas of what to cut...

[SoCalDem]

5. It worked back then, but I don't see it happening now

Not in my lifetime anyway..

[Danger Mouse]

7. Uh yeah, cause the Reign of Terror was FANTASTIC, right?

:eyes:

[SoCalDem]

8. "worked" ..from the standpoint of "kicking the bad guys out"

we don't do things like that here :)..at last so far :scared:

[Danger Mouse]

9. The only problem was...

the definition of 'bad guys' included innocent bystanders, and the definition changed on an almost weekly basis.
Eventually, once they had run out of aristocrats to slaughter, the revolutionaries turned on each other.
The Founding Fathers were terrified of something similar happening in the U.S.

[DRoseDARs]

14. I remember watch a program on that. Sheesh.

Even some of the propagators of the popular revolt ended up being killed by their fellow revolutionaries for urging some measure of restraint instead of wanton murder and destruction.

[WinkyDink]

11. It DID eventually result in modern France.

[cherokeeprogressive]

20. The march of time eventually resulted in modern France.

[Danger Mouse]

35. It only required the deaths of thousands of innocents. Score!

Sorry, the French Revolution was a trainwreck. It started out the right way, but turned very very ugly in a hurry.

[izzie]

30. I guess you are right. I do wish we could have cleaned out

some of those old thinkers out of Congress. This New Bill looks a lot like what Bush was doing. makes people feel good to think they will get money and it just goes to the already rich. I am sorry but I am just sure that that banker who did this stuff is still going to have a job some place playing with my retirement fund. :think:

[Vinca]

2. Maybe they'll take the 5 cent solution offered by many of us -

bring out jobs back from overseas.

[terisan]

4. The Nonviolent People's Revolution comes next and it starts with turning against

corrupt politicians, Dem as well as Republican.

We already got word that the NO EARMARKS claim is a sham so your claim that they will dole out money to pals is true.

I believe money must go to the people not the politicians.

[MadMaddie]

6. You have to go back to view what happened to end the Great

Depression.

The goverment at the time created "Shovel Ready jobs" such as Obama is advocating.

The key is Americans will have to let go of their preconceived notions of what they will do and what they won't do. Many of the jobs will be rebuilding the infrastructure. Rail, Highways, bridges and dams.

Next with the auto industry probably going to lose 1 of the big 3 convert the closed auto manufacturer into a company that produces Windmills etc, whatever needs to be made.

Finally, the fatal flaw in the Repugs screwing of America, a belief that the US doesn't need to manufacture any products on US soil. This mentality has proven to be the undoing of the economy. History has shown that any country that has moved from producing goods to only consuming goods and service oriented jobs is doomed to fail.

This is going to be a rough ride and Americans are generally not inclined to change habits until forced to.....well it's time to change because we have no choice.

[WinkyDink]

13. Pre-WWII and thereafter, for decades, we made steel, autos, electronics, etc. NOW where are Bell

Tel/Western Electric/Agere? Bethlehem Steel? GM? Mack Trucks? Clothing factories? Etc.

We can't even sell packaged food, for human or pet, without some element of it coming from China or elsewhere (try buying canned mushrooms in PA, the CAPITAL of mushrooms, that come from here and not China).

This seems worse, in terms of potential manufacturing, than 1930.

[boppers]

18. We can't/won't make the goods anymore.

I'm curious as to ideas why.

[Oak2004]

36. Same answer as the reason why the economy collapsed: Wall Street

Wall Street has pressured companies to produce ever higher quarterly dividends, under threat of corporate takeover. Corporations have responded by generating these "profits" through layoffs and outsourcing. Of course this merely hastened the day when there would be no more customers for the companies' products, and no more profit for Wall Street or anyone else.

That of course means it's time to siphon the money directly from the government, until there's no more money left there, either.

[MadMaddie]

29. I totally agree with you

I think that the Obama administration MUST consider manufacturing of goods a part of our national security priorities.

[Lyric]

32. The only ones who need to let go of

their notions of what they "will do and what they won't do" are the folks within the so-called Middle Class (a.k.a. Consumer Class.) I can testify that the working class has no problem with a Shovel Ready job that requires actual physical Work. There's nothing wrong with manual labor, after all; it's considered dignified the way that McDonald's is not.

[Clear Blue Sky]

10. Fire up the money printing presses...nt

[leftstreet]

12. Eat the Rich!

[LittleBlue]

15. We've spent trillions and it has done nothing.

Why should I believe any more of my money being sent to these failed banks will solve anything?

[Teaser]

27. Wrong.

It DID prevent the credit marking from completely failing. Your credit card still works. It wouldn't have, absent intervention.

But outrage is easy, and makes us all feel good. So keep on ragin!

[LittleBlue]

28. Silly rabbit

First, I don't have a credit card. I use debit.

Second, this is not a cash crisis, it's a credit crisis. The banks are going to 0 because they don't have the assets to offset liabilities, not because they're running out of cash for credit card operations.

Of course, it feels good to sound intellectual; however, knowing what you're talking about is a different matter.

[LaPera]

16. I do need a new fur dishwasher (mink) my dishes come out much cleaner wraped in fur.

[Agent William]

17. Anyone know of any books that deal with this sort of topic.

YouTube films are good, but I'm going into the business of education people (teacher) and being able to have a knowledge of what is happening would be critical to help at least some members of future generations better prepare for the ensuing shitstorm. Any help would be appreciated.

[SoCalDem]

19. I recommend this book...gave it to each of my sons (all debt-free grown-ups now)

Got teens or twenty-somethings? Buy them this book for Christmas.. You might "save their lives".

Posted by SoCalDem in General Discussion
Sat Sep 27th 2008, 01:41 PM
http://journals.democraticunderground.com/SoCalDem/128


scroll down to order the book


http://www.msnbc.msn.com/Default.aspx?id=3939463

Robert D. Manning, a leading expert on the credit card industry, sees families as likely to come under even greater stress as interest rates -- currently near historic lows -- inevitably rise.

Manning, author of the book, "Credit Card Nation: The Consequences of America's Addiction to Credit." He traces the problem to a credit economy in which credit cards have become "yuppie food stamps," akin to a "social-class entitlement" rather than an earned privilege. Now, government figures show that three out of five U.S. families have credit card debt.

"What's alarming is that doesn't accurately reflect the true distress on various segments of the American population," he said. Not included in the Federal Reserve figures are "new kinds of hybrid financial institutions and new loan products," such as those offered at rent-to-own stores. There, interest rates typically work out to more than 200 percent a year, and sometimes more, Manning said. In one such store catering to middle-class African Americans, he said, the annual interest rate came to 800 percent.

Overall, Manning said, "the cost of borrowing on credit has tripled in real terms since the early 1980s." While many credit card companies offer zero percent introductory interest rates to customers with good credit, he said, the rates typically jump after the introductory period, and many Americans do not qualify for the low rates in the first place.

Although the credit card industry says average household consumer debt comes to $9,000, Manning said, it is actually closer to $13,000 when the roughly 40 percent of households that pay their balances each month are taken out of the equation. "In the old days, the best customer was someone who could pay off their loan," said Manning, a professor at the Rochester Institute of Technology in Rochester, N.Y. "Today the best client of the banking industry is someone who will never pay off their loan," because then the client is more likely to incur fees. In 2002, the average household consumer debt translated into $1,700 a year in finance charges and fees, he said.

In the long term, Manning said, the burgeoning debt "means our standard of living has to go down." Dvorkin agrees. "It's going to result in people having to work longer," he said. "Effectively, if this continues, the average American will not have enough to retire on and will not be able to retire."

The record consumer debt also dovetails with other social problems, Dvorkin said. More than half of all marriages end in divorce, and "the number one cause of divorce is financial pressures," he pointed out. After reaching a new record last year, personal bankruptcies "will continue to grow," Dvorkin said. "It's very scary."

snip

[JVS]

21. Centralized economic planning

[Honeycombe8]

22. It's not a handout to those in financial trouble. It's a get-the-economy-growing plan.

It's like that old saying, "Give a hungry man a fish, and you provide a meal. Teach a hungry man how to fish, and give him the equipment to do so, and you provide a life."

There are millions of people in trouble, for sure. Most are poor. Many were wealthy or middle class. But they're all in the same boat. And all are supposed to do better, if the economy starts humming again.

New businesses should open and therefore more jobs, money should be freed up to loan for cars and houses and such, and in the meantime, hopefully we won't have any more bridges collapsing and killing people.

Give the plan a chance. Let's see if it works.

Also...your view is a bit negative. Our American auto manufacturers aren't in trouble because their vehicles were too expensive. (We can buy decent autos starting at $15,000...something the folks in Europe can't do.) They're in trouble because they're inefficient, poorly managed, their vehicles don't have reliability standards to match those of some of their competitors, and they aren't selling what the mass market wants and needs.

If you think the cars on the market are too expensive (you can get a great deal on many vehicles right now, BTW), I wonder...how long did you keep your last vehicle? Americans are spoiled, expecting to buy a new car every 5 or so years. Buy a car, maintain it, and keep it for at least 10 years (preferably longer), and most people could afford to buy a quality, reliable vehicle.

I agree with you ont the retraining myth, though. It won't help a middle aged laid off worker get another job, esp. if s/he lives in a small city. First, the jobs just don't exist. Second, no one will hire a middle aged retrained person to do a job that they can hire a 25 year old to do.

But to be positive, this is going to be a killer year, and we knew it. But in the end, most Americans ARE still employed and have not lost their homes.

Go forth and be productive, but frugal, is the message, I think. And quit charging for consumer items that we want but don't need (if we don't have the cash, that means, really, that we can't afford it). Knowing what we can afford is a key lesson. I think many have learned it. Don't try to buy more house than you can pay for in bad times. Don't try to buy electronics on a credit card, when you can't pay for it in cash at the time of purchase. Heavy lessons, and I think many Americans have learned it.

[SoCalDem]

23. We have a Honda Accord EX 1991...1988 Dodge D-50 and a 2005 Amanti

which we bought with cash for less than half price when it had less than 20K miles on it..:)

ANY car that takes a 6 yar loan is "too expensive", in today's financial crunch..

Are YOU sure you'll be employed 6 years down the line:evilgrin:

[Honeycombe8]

38. Good deal. Schwing! As for my future employment...

No, I'm NOT sure I'll be employed next month, much less 6 years from now. I've been thru recessions and high unemployment before. I learned the lessons. They are:

1. Have a SERIOUS emergency fund, to last for a looooong time, while I look for new employment, if I lose my job.

2. Have MORE THAN ONE SKILL, so that I can try to find new work in more than one field. (I'm from a union town; I saw what happened to the plant workers when they lost their jobs. They didn't know how to do anything else, and what they knew how to do was a specific thing tailored to one narrow field. They weren't marketable. I learned the lesson: be prepared to do more than one job)

3. Be prepared to live on a lower income, because you will not get paid as much in your new job as you did in the job you were laid off from. (In other words, try to keep your necessary living expenses much less than your current income, so you can still meet your expenses, if your income drops.)

4. Do not, under any circumstances, carry credit card debt.

5. Pay off your car asap, and don't buy another one for a number of years.

6. Pretend you are still paying your car note, so that when it's time to buy your next car, you don't have to finance it.

Even with all that...I still could be in big trouble, if I lost my job, because I'm middle aged. My chance at finding another job in this economy is poor. Very poor. I'd be lucky to get a job at Burger King (but why would they hire ME, when they can hire an energetic, non-arthritic 25 year old?). But maybe I'd find a clerical job somewhere, with low pay.

I've been very poor, and I've done fairly well, too. So I've been on both ends. There's no shame in being poor and living within your means (I've cried more than a couple of times in my life because I couldn't afford dental care or a $5 tabletop Christmas tree). So when I DID make more money, I just couldn't bring myself to spend it all. I saved and prepared for the time that I would, possibly, once again be poor.

[sohndrsmith]

24. Maybe that would be a signal that materialism/consumerism isn't

the best way to go, hm? Time for plan B.... Hopefully we'll be able to figure out a more positive way towards progress and a bright future than to be quite so obsessed (consumed, for lack of a better word) with stuff.

Fear not. We'll never run out of stuff... but we will run out of space for all our "stuff"... which my guess is will be our most challenging problem of all.... it's not far off... in fact it's happening now, we're just ignoring it for the most part. Very bad plan.

[uponit7771]

25. The banks are the villians here and everyone in finance knows this

[sohndrsmith]

26. makes me wonder what the effect would be if every citizen 21 and over was given a

million bucks - or half that. Would society and civilization collapse as we know it...?

I know it's a childlike notion, but I can't help but wonder if it wouldn't be pretty stimulative. Some people would waste it and/or destroy themselves. I think a lot of people would change their lives for the better....

it's silly... especially since I didn't check the current US population of adults to see just how hilarious it would be. Even a quarter of that per person... would it destroy our economy as we're told it would?

I wonder sometimes.... with so much suffering... how many lives would it change, would it repair, would it save? Sounds like a Republican idea, in a way - give everybody the responsibility to use their funds responsibly... A one shot deal... you run out or spend it in a week, then you're resigned to the life and programs we have set up for those suffering from poverty now. But at least many more would have a shot at really making their lives to be proud of, and contribute to the greater good because they can.

I know, I'm overtired. Fun to think about, however unrealistic... : )

According to the CIA Factbook (from wikipedia), the rough estimate of people over the age of 20 in 2007 was about 180 million. (sigh...)

[Career Prole]

31. If someone sent me a million bucks

I would be discovered dead, by my mailbox...one hand clutching my check, the other my chest.
That'd be one less person over twenty to worry about, and they could then send the same million to another geezer...and another...and another...

[Lyric]

33. I can tell you what would happen.

It's called Inflation.

Even if the government managed to give out the money in a way that *didn't* permit for people to destroy banks by trying to withdraw massive sums of cash all at once (people are obviously distrustful of banks right now, and that's a LOT of money) we'd still be fucked. If the money came to everyone on a Monday, bread would cost $10,000 a loaf by Saturday, and the dollar would cease to mean anything.

[jeanpalmer]

34. It's hard to see how things will fundamentally change

so long as $800 billion a year net is shipped overseas as evidenced by the trade deficit. That represents jobs and incomes shipped out of the country, and it represents about 5.5% of of GDP. No economy can maintain that trend and remain healthy. The Fed tried to make up for that loss of demand by lowering interest rates to absurd levels, encouraging people to go on a borrowing binge to make up for lost wages and lost demand. The result was people taking mortgages out on their homes to extract the equity which they substituted for the lost wages. And of course that money instead of going into productive endeavors went toward consumption and speculation in housing and stocks, creating huge bubbles.

It's been shown that if people hadn't treated their homes as ATM machines and withdrawn the equity from them, the country would have gone into near recession following the dotcom bust, with GDP between 2002 and 2007 expanding at 1% or less.

The point is, that 2002-2007 economy is not a sustainable model. And yet the solutions that are being offered are trying to effect a return to that model. Such solutions are doomed to failure so long as the underlying problems of jobs being shipped overseas and wages declining are not corrected. That's where our effort should be directed. The current throw money at the problem approach is simply papering over a fundamental dislocation in our economy. That won't work in the long run. A solution to the trade deficit is essentialm there.

Beyond that, the country has the additional problem that people have gone too far in debt. That debt has to be worked down. But instead, current efforts seem directed at encouraging people to take on more debt. That's a loser also.

[tigereye]

37. the banks that received stimulus need to be forced to start lending again

distributing loans to business and home-buyers, with conditions this time....