Wednesday, April 25, 2012

Is It the Lack of Simple Math Skills That Grows America's Debt?

Congress has been refusing to act on paying down the debt. A year ago I was not terribly concerned about this because even in my wildest imagination did I think they would let it continue to grow.
The housing crisis and bad economy did not just happen, they were created. In 2003 I began warning people about the outrageous mortgages that banks were manipulating people into. I spent 6 years getting those that would listen out of them. I worked with a financial company in an attempt to prevent the hous
ing bubble and economic collapse. We made a heck of a difference and the company still does but too many people believe political rhetoric and the media.
The reason the temporary (Bush) tax cuts went into effect in 2001 and 2003 was because the government was trying to prevent what was about to come from being catastrophic.
The cuts of 2001 were put into play with the "Economic Growth and Tax Relief Reconciliation Act of 2001" and in 2003 with the "Jobs and Growth Tax Relief Reconciliation Act of 2003". Because they knew we were headed for a recession, they attempted to stimulate the economy by temporarily putting more money into the hands of middle-Americans yet created the debt by decreasing revenue from those that could afford to pay and creating loopholes and credits for already profitable corporations. To make up the difference, they borrowed. The country jumped for joy because taxes were cut but neglected to view the whole picture.
Everyone has been aware that baby boomers, our largest generation, are aging becoming a high cost to Medicare and Social Security. Both of which they are entitled to after paying in throughout their careers.
9/11 happened in 2001, war was on the horizon and we went into Iraq in 2003. We launched military operations in Afghanistan in October of 2001.
Knowing that government spending would be extremely high to fund these 2 wars and and we would now have to pay back the baby boomers for their contributions, taxes were cut 2 times for all - including America's wealthiest citizens Tax payer dollars were directed to subsidize America's already profitable corporations. This increased already high profits of those making billions of net dollars. What sense did that make?
When you increase your costs would you decrease your income? Of course not! Yet this is what our Federal Government did and some current Members of Congress force it to stay this way.

Mortgages were not sold to people that could not afford them. The terms were set so that the mortgages would implode making them unaffordable in time. The banks are insured from losses on these. Salt in the wounds; consumers pay the insurance premium to protect the banks (MIP, PMI). The banks temporarily lose funds during the period that people are in the homes, not paying and continue through the foreclosure process. After re-selling the home and showing their over-all profit loss, banks collect their insurance payout. The payout is based on the homes value at the time of the original mortgage - when house values were high. The bank still owns the property and enters into a new mortgage contract with buyers making new profit at today's lower values.
During the time that banks had knowingly temporary losses, the bailout was created. This was necessary at the time for the good of the people dependent on banks. Originally it was going to be a gift to banks from the American people that banks had taken advantage of but Senator Obama convinced Congress to make it a loan benefiting tax payers in the long run.
The banks and the government (who repealed protective laws to make it possible) worked together in taking our homes, crashing our economy and giving our hard earned money to corporations including oil companies and purposely putting the federal government into deep debt.
Next steps, get the country angry about the high debt and blame the middle-class, the poor and the millions of Americans that stand together for employee protection; Labor Unions.

By frightening citizens with America's debt, giving the false impression that the millions of Americans that stand together for employee protections are "thugs" and pushing other false fears, the rich will continue to get richer and wages for most Americans may decline after years of being stagnant.

Historically, Americans have united to establish laws and Government Departments to prevent the greed of a few from destroying our great country. Millions of Americans, (citizens are our Nations true Government as long as we insist on it) created the Department of Labor, OSHA, minimum wage laws, and many, many others. These are frequently under attack by certain politicians and are always fought for by many citizens organized together as a labor force.
If big money can convince enough Americans that the areas that protect the middle class have created an unnecessary "big government", the people will lose all control and big money wins. The fight of our ancestors will be lost and we begin again. I joined that fight before it's too late. We are making progress and I am confident but it is an uphill battle.

Click here for information from Americans that ending the temporary tax cuts for millionaires would directly affect

Post a Comment

Search This Blog