I keep hearing about "get credit flowing again" and "get the banks lending again"...
...isn't that what got us in the mess? (People getting leans the couldn't pay back, albeit home loans, credit cards, personal loans, etc.)
That's like trying to put a fire out by adding more fuel!!
(btw...I know there's more to it than the "credit crisis", I just don't see fixing a problem by adding to it)
I believe the purpose is ti get the money back into the economy,..
When the govt did the bailouts, that was the wrong way to do it, they should have given the money to taxpaying citizens, then the money would be recirculated. That's kinda what the stimulus package is supposed to do, get taxpayers spending again.
I am no authority on this **** by the way,..
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Here's some more things...
I just saw an Obama speech where he said we can't spend money if we don't have it.
I didn't know we just had $790 billion laying around.
And he said people spending would stimulate the economy.
Didn't congress just shame the CEO's for their jets and the companies having the time in Vegas, Florida, ect.
Well, jets cost money...people build them...people repair them...people fuel them...people fly them...people work at airports...ect
The get togethers are the same...you spend at the hotels...you spend at the restuarants...you spend at entertainment..ect
So wouldn't the spending be stimulating the economy? Wasn't that the purpose of the money?
If you take a $100 loan from the bank, with an annual interest rate of 20%, you will pay them back $120 at the end of the year. The bank makes money; they are happy. You were able to spend money you didn't have all at once, you are happy.
Now we factor in the inflation rate. You've paid back the $120 at the end of the year, but the inflation rate was 30%. What this means is the $100 you were loaned is now worth $130. The bank just lost $10. You're happy; you just got paid $10 to borrow $100. The bank is pissed, so they jack up the interest rates to stay on top. Now interest rates are high. This makes people less apt, or sometimes even unable to take out loans because of the large amount of interest they will have to pay in return.
In the credit crisis scandal, "we give any loans, regardless of credit history", the interest was never paid on a lot of loans, which sort of inflated the US dollar. As I said earlier, when inflation rates increase, interest rates follow soon after. People stop taking out loans, and start saving their money. Less things are being bought, especially stuff that needs financing. Companies experiece a surplus in production, so they downsize. Now people are out of jobs. Less things are being made, less things are being bought, inflation is high, Real GDP gets kicked hard in the nuts. After 2 quarters of this economic decline, we call it a recession. People freak out, and the government tries to interfere with the natural flow of economics. Sometimes it works. Sometimes it doesn't. Giving poor people $300 is beyond my level of understanding, but some of us elected these guys into office and if it seems terrible, it makes you wonder if the other guy's plan is any different, any better, or any worse.
No, what got us in the mess was reckless loans. Now, just like estrogen rebounds in the opposite direction after a cycle, the banks and loan agencies became too tight with their loans and causing even more people trouble. The idea of the stimulus regarding the loans is allow the right people to be able to borrow money and begin to even things out.
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In case you didn't know, these "bailouts" and "stimulus" packages put our country over 10.7 trillion in debt, and thats just the government aspect. If you look at the entire economy, including stocks and bonds (which are debt) our system is pushing 100 trillion in debt.
The basic problem is the people are not educated on how our system works. It is a business and investment system. Not an employee system. Free enterprise means we are to own and grow our own businesses, not work for someone else. With over 80% of the country either employees or by now completely unemployed, our wealth is going backwards. As an employee you will never actually see a "raise". How many people get over a 5% raise each year? And that only covers inflation. People must be taught how to compound their income, and make it residual.
Success is not taught in schools or hardly anywhere else today, and that is our problem.
It's all gravy
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10.7 Trillion is the estimated national debt after the stimulus package. Our government has been at a deficit for the last 40 years straight or something. There are businesses in this country that do millions and millions every year that have no employees, however not everyone will ever own their own business, or at least not everone will solely own a business. Becoming a business own requires startup capital, and although sometimes its next to nothing, it still takes money to make money. Plus, many people don't have the mentality to own a business.
Besides you put it there yourself responsible people lack confidence in this environment. and the reason they lack confidence is BECAUSE they are responsible.... The bs line about getting commercial credit flowing because some companies use credit lines for payroll just about drove me nuts. If you have to use credit to make payroll on a regular basis, better for you to give up already
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Through the corporate method, investment in stock entails partial ownership of a company. You are actually buying and selling ownership of a portion of the companies net worth.including stocks and bonds (which are debt)
Name some. Think to yourself what industries they belong to, when you are thinking of these examples.There are businesses in this country that do millions and millions every year that have no employees
Most of the time, we are not selling pet rocks, though. You strike me as someone who's just finished reading a "get rich while working at home" book.Becoming a business own requires startup capital, and although sometimes its next to nothing, it still takes money to make money.
I never said anything about interest, so I don't know what that question was. When expenses are greater than income, it's called a deficit. We have accumulated this, well, really, since the United States inception. The nation debt has increased every year since 1969. When you are buying and selling a part of a companies net worth, the company still is not owning that piece of the net worth. Therefor, the company is in debt to whoever owns that piece of the net worth. Some Trump or Kyosaki books would explain this to you much better than I can. In case you don't know, there is a business model that was developed in the '50s that allows individuals, to "endorse" for some major companies. These companies use what would be their advertising budget to pay people to drive volume thru their stores; giving these people their own endorsing business. I refer you to the book Prosumer Power. These businesses are not pyramid schemes, or panzi schemes, they are completely legal, as long as they are based on the compensation plan of one company in particular that the FTC deemed legal because it simply worked. Some of these companys have some of the highest quality products you can buy, and profit by billions of dollars a year, and pay their endorsers millions of that profit back. Now explain to everyone why a company that does billions and shares back millions, and provides you with a compensation plan in which you can make as much as you work to get, is such a bad company (of course, I'm not saying that all network or social marketing companies are great and truthful, because I know of some that have been shut down for making "outlandish claims").
facts are facts
I am nervous about the US spending that money.
I am nervous it won't be effective enough.
But, put this into perspective:
fcnl.org/issues/item.php?item_id=3361&issue_id =18,Close to a trillion dollars for a war?
Forget the debate whether those wars were right, wrong or whatever.
Doesnt it make more sense to invest in our own country if you're going to spend money?
Not that I approve either admin spending money they dont have. It just seems to me hypocritical for republicans to blast dems for spending money in light of the turn of the last 8 yrs from surplus to deficit.
Frankly, I think both sides should have played nicer on this. The 3 republicans who got their feet wet with this did some real good, got rid of some bs and added some infrastructure. Thats how it should work, both sides keeping each other in check and coming together for the best ideas.Not Pelosi and Reid hogging the details and house repubs sitting on their hands.
Im starting believe there are no centrists left and thats a shame, because neither one of these political camps has the answers at all!