When the Administration finally had to admit that the “fundamentals of our economy” were anything but “sound” … I remember President Bush saying, “The government is responding with decisive action.” Huh? Decisive? He needs to lay off those heavy doses of Prozac he must be taking!
The actions taken by this Administration thus far have been anything but decisive. Paulson continues to waffle and can’t make up his mind how he wants to spend the bailout money. Instead, he continues to throw good money after bad without out oversight. Bernanke has committed billions if not trillions to shoring up banks using his office’s authority, above and beyond the congressionally approved $700 billion. And Congress, let’s not forget them, haven’t insisted on reports nor have they approved the oversight czar.
Instead of recovery, what we’ve seen so far is bailout money being used by the banks to bolster their own financial situations and to buy other banks, normal dividends being paid out to stockholders as though it is business-as-usual, and junkets being taken by banking officers … on the taxpayer’s dimes. We have yet to see their actions begin to free up the credit markets or help mortgage holders who are teetering ever so closely to foreclosures.
Bernanke’s latest tactic is to attempt to drive down yields on long-term Treasury bonds, such as 10-year Treasuries, through buying them up. He figures that might lower the 30-year fixed mortgage rates which are typically tied 10-year Treasury note yields. Well … isn’t that just great? The rates will be lower, but hey buddy, the banks aren’t loaning! Even if they were, the values of those properties in trouble have plummeted, the people now owe more money than their properties are worth, and those same home owners probably don’t have any savings left for a downpayment that the banks will demand before approving a new or replacement loan. So how is that going to ‘fix’ the economic crisis? It’s like adding insult to injury. Who the hell’s going to be able to take a bite out of those carrots?
It’s becoming far more evident, the Administration and their minions haven’t a clue as to what it is they’re attempting to fix … and trying to rely on Reganism’s trickle down theory for applying a fix at the top and letting it trickle down to the folks who are really in trouble isn’t going to make one iota of a difference. According to Michael Silversteen, “It’s a debt-based economy-wide problem with financial industry overtones.”
Hey … take a look at the debt calculator on the left side of this blog. It’s rapidly approaching $10.7 Trillion and it’s not slowing down. Our government bureauacracy is huge. It alone is consuming huge volumes of all available currency just to pay interest on our debt to China and Japan, and doing zip-point-nothin’ to repay the monies they’ve borrowed from the Social Security Trust Fund. The government is competing for the same funds as regular Joes and the government is hogging most of what’s available. China’s economy is beginning to falter too. What exactly would we do if China called in their loan of $600B? (About $600 billion of China’s savings is invested in US Treasury bonds.)
We now have only 44 days ’til this Administration is finally gone! It will be interesting to see how the new Obama administration will handle the ever-ballooning economic fiasco. While we’ll have some new folks in charge, I’m not all that hopeful they’ll be able to fix it soon, since some of Obama’s appointees were the ones in charge at the banking firms who helped to get us to where we are today.
As I’ve commented before, let’s look at the ballooning national debt numbers in relation to the U.S. Population, which was estimated to be 303,824,646 in July 2008. If we divide the population number into the debt, that means every man, woman and child in the U.S. is in debt to the tune of $35,152 each. If the debt continues rising to the projected $15 Trillion by mid-2009, that would mean every man, woman and child in the U.S. would see their individual contribution to that debt rise to $49,370.
Hey, I don’t know about you folks, but I’m just an ordinary citizen who’s retired. The debt is rising, manufacturer’s are firing and producing less, and the GDP is declining. That means the debt is consuming an increasing larger percentage of GDP with each passing day. Personally, we’ve already seen the value of our home decline, 40% of our 401k evaporate into thin air, and now between my husband and me, responsibility for nearly $100K of the national debt. I’m just an ordinary citizen who’s worked all her life, who’s played by the rules, paying her bills and saving for retirement along the way. Seeing everything I’ve worked for simply evaporate is heart-breaking. This insanity simply has to stop!