I am wondering if people really understand the fiscal tidal wave coming.

[Neshanic]

The government will be taking on the debt, all of it that the private entities do not want. The RTC took the assets of FAILED banks and S&L's. We are in uncharted territory and the powers that be are going to back all the checks, take all the risk, pay all the bad debts,of business that have yet to fail, all the while letting Wall Street start off with a clean slate and no regulation in sight.

We as a country are in financial ruins. I knew it would be bad, but this is going to be beyond the Great Depression. Be prepared for years of us hearing about the new "entity" asking congress for 100 billion, 200 billion, then 400 billion. This will be repeated every year as they say the end is around the corner, and the mess is almost cleaned up. This will go on for years. Every time they report on the progress, they will be asking for more money. No one will go to jail. No one will get "caught".

In the end, if there is one, we will be in the hole two trillion. If we are lucky.

[mahina]

1. Neshanic, can you please let me know a little bit about your background?

Are you in the industry, or trained in finance, or otherwise hipper to the background realities that are blurry to us?

I am not saying you aren't right, you may well be, but I'd like a clearer understanding of your perspective.

Thanks very much, aloha.

[Neshanic]

5. I deal with developers and cities, planning. I lived through the S&L

recession. This is going to be much worse I am afraid, and there will not be any really safe pockets that escape.

The S&L thing was the government taking over failed institutions and selling the assets for a very low price. Giveaway prices. People were accountable in a sense because the paperwork could be found and traced, and the people punished, albeit a smack on the wrist.

This is a new animal. The government is taking companies that have not yet failed, and now it looks like they will be in the same position of the RTC except that companies will willingly give up their bad debt, stay in business, and get a fresh start with no problems, persue business as usual, and we will pay the bill.

Also, who owns these assets? They have been divided and divided into tranches that will never be pulled out of a tangled mess, so we will take on the mess in one big swipe.

I remember you could not get arrested for a job back in 1988-92. That was when we actually made things here too. Now the biggest employer in AZ is WAL-MART.

This is not a good situation by any means.

[raccoon]

28. What do you mean here,

"I remember you could not get arrested for a job back in 1988-92."

[mike_c]

36. the DUer means that jobs were so hard to find...

...that you couldn't get arrested for a living, if I'm not mistaken.

[guitar man]

41. yep

That's what it means, work hard to find, if not impossible. I was homeless for a while during that period. I use the expression "couldn't box myself up and mail myself into a job"

[Mind_your_head]

2. No, many/most people do not.....

....and even the ones who 'do' understand are "speechless"

(as mentioned on an earlier thread today, the subtlety (sp?) of 'speechless'/taking one's breathe away goes unnoticed, but it HUGE without screaming out-right)

[avaistheone1]

3. Yes, I have heard this will go into the trillions.

I think collecting this debt should start with all the top management who have been making these multi million dollar salaries and bonuses at these failed corporations.

Then these managers need to be prosecuted on the toughest terms imaginable.

[readmoreoften]

23. It has almost been a trillion dollars this week alone ($900 billion).

So, yes we will go into the trillions. Not "America" or "the American Government" but the worker who can't afford to get around tax loopholes will pay this. I am sure that they will not just go into debt when they mess up. They'll go into debt whenever they feel like it. Why wouldn't they? If we're going to pick up the tab, they might as well order the most expensive item on the menu.

[Skink]

4. A lot rides on this election.

If Mccain gets to pick these appointments it could be bad. If however, Obama gets in and places someone like Robert Reich in Paulson's position things might be alright.

[Neshanic]

6. If McCain gets in we will be royally screwed. Obama would have

new ideas, and innovative ones to deal with this. This election decides if we as a country make it financially.

[thecrow]

7. Obama has an education and a cool head

McSenile has a cheap shot and is confrontational to the world.
He'll start another war.

Remember when it was "only" $80 BILLION of funds needed for a war we shouldn't have embarked upon? We were worried that it would run up to 1/2 trillion over 5 years.

And now they've spent a couple trillion in a matter of DAYS?
How crazy is this?
Smirky must be trying to set a Guiness world record.
No, Chimp, it's not a beer.

[TankLV]

11. But yet, they tell us that we CAN'T afford free health care for everyone...

We don't need health "insurance" - we should ELIMINATE the health "insurance" - we want health CARE. Period.

NOW is the time to push this!!!

[Kitty Herder]

26. I think they've made that impossible.

They've put us so far in debt that we WON'T be able to afford health care.

They're now in the process of drowning the government in the bathtub so it can't ever provide much in the way of services again.

And, yes, this pisses me off beyond words. They're destroying this nation.

[yardwork]

30. People said that after we racked up the billions in Iraq, but there was 2 trillion to spend Wed.

This time I'm not taking no for an answer. We need universal healthcare now! It will pay for itself in increased productivity of healthier people. We have socialized Wall Street. Why can't we socialize medicine.

[TankLV]

52. umm - BULL - even after this one - they'll ALWAYS "find" a way to pay for THEIR crap

and we STILL will be whining about how "we don't have the money to do (insert favorite repuke talking point here)..."

I call BULLSHIT - and I don't EVER want to hear another thing about how we can't afford this and can't affor that when it comes to things that would benefit the COMMON MAN instead of spending yet ANOTHER billion on the fucking RICH!!!

I won't HEAR of it EVER AGAIN!

[Delphinus]

33. Agreed.

HR 676 is a step in the right direction.

[Kansas Wyatt]

43. Now John McSame says that Americans are better off without gov't healthcare...

After all, he has lived his entire life by providing his own health coverage.... By sucking and slobbering on government health care tit his whole life, even as a child when daddy was in the Navy. Good enough for him, but not good enough for everyone else.

John McSame is a hypocritical piece of shit.

[TankLV]

10. If mcINSANE gets it - then the world will see how it would be if Roosevelt did NOT win the first

time...and it won't be pretty...

[Neshanic]

12. That's absolutely correct.

[TahitiNut]

8. Is it any wonder they stopped publishing the M3?

:shrug: :eyes:

[Neshanic]

16. They knew things would get like this, they just hoped they would be out in time.

[99th_Monkey]

20. So true. One of the silver linings I guess is that the lid blew off now and woke up the voters

... instead of it blowing off in .. say ... Dec.08/Jan. 09

[lonestarnot]

32. No not any wonder here. They were just a couple of months early on the bust. Timing is everything!

Sonofabitches!

[LSdemocrat]

9. I want to know, how will this not completely tie the hands of the govt for the foreseeable future?

At least with the takeover of properties the government could eventually resell them, but here aren't they basically taking over mostly failed derivative and option positions? Aren't these things basically now valueless? What's there to resell in the future to pay this off?

[Neshanic]

14. "Aren't these things basically now valueless?" Yes they are, but we are buying

them so the entities that sold them to us can go on doing what they do, no regulation required, at least not any worthy of mentioning.

It's scary. Yes,our hands will be tied for decades, if not longer.

It's a CNBC world now. Just good news. For them.

[aquart]

13. Not getting it at all.

They're buying the nightly news tripe that these are just vagaries of Wall Street.

But we don't have the same ability to recover that we did after 1929. We have no manufacturing capability. No steel industry. No tool and die industry. All outsourced under Reagan. If we want to retool our plants or build new...we need the permission of foreign powers.

And we are about to be shattered again and again and again by climate change disasters for which we have made no preparations whatsoever. Our energy delivery systems have to be completely rethought. And no one I know is thinking about it.

Meanwhile, our exhausted armies are costing billions a day to fight wars we will never win but are too macho to admit losing.

[Neshanic]

15. It's sad that they are actively decieving people, when there needs to be a bright

light shown in the corners of this massive sell job.

[Raksha]

44. Could you please explain this statement?

If we want to retool our plants or build new...we need the permission of foreign powers.

Why would we need the permission of foreign powers to retool our plants or build new ones? How does that work, who agreed to it, and when? I don't understand that at all.

[SmokingJacket]

45. Doesn't he mean that so many of our companies now have

foreign owners?

Practically the whole publishing industry, for instance, is owned by Germany...

[iamthebandfanman]

17. its actually a good tactic

to keep the talking/chatter to a low rumble if possible...

as in any crisis, you should wish to avoid panic... as panic leads to irrational thoughts and actions... playing it cool is the way to go..

assuming , that is, that we had a government that was capable of solving the problem in the mean-time... i hope we do... and i hope we can all hold out long enough until we get a president obama

haha, propaganda with a good purpose... whod've thunk it eh ?

[lligrd]

18. Conservatives Have Been Living This Lie For Decades

They pretend they are fiscally Conservative while spending tax payer dollars freely (on their friends). And they think they are really smart as they steal from the middle class, give to the rich and let the poor rot. But how smart will they feel when they realize their is no one left to foot the bills. Watch them start eating their own.

[OakCliffDem]

25. It is all about transferring wealth from the general population to a privileged few

And don't you know the vast majority of the 'few' are Republicans.

[Prophet 451]

19. Do any of us?

I mean, we might understand the basics but international finance is f'ing complicated and few of us are economists. I'm British so I'm slightly more sheltered but I get paid in dollars so it's hardly academic to me.

If we regress to a barter economy, I'll be fine. I can hunt, fish, fletch (means to make arrows) and brew beer, cider, mead and applejack. Come to think of it, I'd probably be rather better off than I am now.

[DeschutesRiver]

40. Last year I got a clue and took proactive measures to finish changing my lifestyle

and protect my family against what I realized might be coming.

Honest to god, I was such a dope until last summer. Example; I showed horses for years, and over the last 5 years, would come home from shows telling dh that everyone has boatloads of cash. Including people I knew from conversations didn't make a lot, were pretty much in debt or flat out broke. Yeah, there are tons of uber wealthy showing horses, but during my last year doing it, everyone, from the stall muckers on up had the latest toy and trinket and brand new truck. One couple, she didn't work, her hubby was a drywaller - had gobs of "stuff" that I couldn't afford without breaking the bank or getting way in hock to a bank. I would tell dh that when I did things like that for a living, back in the dust of my 20s, I couldn't buy the shit I saw these people with; heck, we are lawyers, and I can't buy the kinds of things these people were taking for granted as daily convenience and toy "givens." Flips, second homes, lattes, latte machines, $600 shoes, $700 handbags, $8000 Rhino atvs for people who don't even use them much, I mean boatloads of trinkets. Turns out all on payment; turns out payments made by using house as atm, and credit cards with 0 interest, balances >30-50k, making teeny payments on that burgeoning debt load. Housing was busting apart, I finally "got" that all my friends/acquantances/neighbors were living on the debt hog, thought debt was wealth, and likely their party would be paid for by people like me, who scrimped and did without, who are self employed and don't have some automatic pension plan. I read Ayn Rand when I was just 13 years old; and in fact got out that old copy of The Fountain Head for dh to read.

So I worked my/our collective asses off, gave up everything and got out of remaining debt, lost what seemed at the time to be big $$ by selling all MFs, stocks, and mm retirement money to invest it in treasuries. Sold or donated things I didn't need; continued to add to my self sufficient skill set. Had I stayed where I was, I would be down probably 40%. I am not earning a damned meaningful dime, but I am in the "return OF capital, not return ON capital" camp right now.

I don't know how this will all go down, but the decisions I have made are 1) be in as risk free and strong of a personal position as I can be, 2) work hard 3) spend nothing, 4)be ready to help people I know who were responsible and are getting whacked unfairly by the irresponsible ones at all levels, and 5) vow to not pay for anyone's parties from the last 5+ years. And make sure by speaking to everyone I know, to see Obama elected. And I will be right out there with you in that barter economy, soon as I finish splitting the rest of my firewood, because I am turning off my heat pump this winter. I am not participating in a bailout of the bad people.

During the last five years, I almost couldn't talk to anyone who had a hard luck story - most were bragging. In the past 3 months, dh and I have noted we have not talked to a SINGLE PERSON who doesn't have some really bad ass times going on.

[Prophet 451]

53. I declared bankruptcy two months ago

Here (Britain), our bankruptcy protections haven't been eviscerated yet so with the exception of my student loan, I'm now clear of everything. Had to do it in the end, I just couldn't keep up on all the stuff I took out back in the good times. Well, the good times eventually ended and my mental health collapsed so I couldn't keep the job I was in (I was in law too as it happens). Now, I have a low-stress job with a company that actually values my contributions. The money's not as good but it's enough and more importantly, I'm happy, the casks in the basement are maturing nicely and my health is slowly improving.

[DeschutesRiver]

54. Back in our younger days practicing law, we used to visit your country twice a year

for business (Lloyd's) and of all the places I've traveled to over the years, London is the place I miss the most (although from conversations I've had recently, much has changed there).

The wisdom that comes with age often reveals that there can come a time when things get so muddled and unsatisfying that it is best to clear the balance sheets, clear the mind, throw out the rubbish and just reboot your system. I am glad to hear that you were able to rebalance your life, and wish you much progress in that continuing effort.

I am happy with certain aspects of the life we used to lead - some great experiences, at least up to the point that it no longer represented who we wanted to be nor how we wanted to spend the unknown amount of days still left. Our lives are low stress and our days so much fuller than we even imagined they would be - wouldn't trade places with any of the people in my former lifestyle for love nor money:) Good luck on your journey.

[melody]

21. Would you rather have a widespread knowing that triggers waves of suicide?

Or would you rather have a gradual coming to understand and grappling with it moment to moment?

I don't understand people wanting others to scream and cry in agony for their observation. I've lost so many loved ones, I know what is really valuable. My husband and I live on next to nothing now. We'll all survive. We have to. What is the alternative?

[aint_no_life_nowhere]

22. Will there be any money to fund domestic programs, like universal healthcare?

or having a Manhattan-style project to make a great leap forward in green technology that we desperately need? Will there be money to lend to students for a university education as costs continue to go through the roof? What about money to fund the revamping of our bridges and highways that are falling apart?

Or is that part of the plan?

[readmoreoften]

24. Human progress is just the shit of capital to Friedmanites, the bullshit you go along with to rob

workers of their paychecks: doctors, teachers, scientists, will not be banned. Student loans will continue...at payday loan prices. Bridges and highways are irrelevant, nothing more than the pap that pothole-fillers won elections on before the advent of 24 hour stage-managed news. Anyone important will be in a private jet. The infrastructure will always be at crisis level so that the worker--already robbed of his/her value by corporations--will fork over money to the government to pass back to the corporations to half-fix the pothole to the tune of 24 million dollars. The pothole will crumble, more people will fall in, but the folks in the jets couldn't possible care, although they might every now and then look out their window and feel a great sympathy for us and feel proud of themselves for all the hard work they do keeping the nation free so that people like us can work our way up to their status. Meanwhile, our bodies are piling up in the pot holes and the news isn't interested in covering the story.

[bbgrunt]

34. it is the purge of the "useless eaters" that they have been

salivating over.

[readmoreoften]

37. Of course I would place them in this category myself. Nothing more "useless" than a capitalist.

Oh, you put money in the markets, that's what you do. Riiight. Where did that money come from? Surplus value. Righto sport. You subtract profit from what the working class people create and then live high off the hog and spew it all around and call it useful. I call it theft, coercion, sociopathy, and thievery.

[leveymg]

27. America has been in controlled collapse since 2000

[LanternWaste]

29. I imagine no one understands it...

I would imagine no one person understands it.

Although every one has a pocketful of prognostications, analysis, and opinions, it seems to me the best ones are merely educated guesses at best.

[WCGreen]

31. can you say Banana Republic...

[Wilber_Stool]

35. Remember the big joke of the 50s.

How they would hire someone to run a company into the ground. No risk investments. What a country.

[Greyhound]

38. You're right and the only way out is to withdraw from the game entirely.

The rest of the world financial scheme cannot exist without our participation and they know it. If we quit the rest of the world has no choice but to go along.

But the window is being closed as quickly as they can.

[Hugabear]

39. My own company's owner told us today that this could be MUCH WORSE than the Great Depression

We're basically looking at a catastrophic failure of the entire US economy, and most of the world won't be far behind. That there will come a day when you'll be lucky if you can even get a job at McDonald's.

The company I work for is okay for now, but who knows how long that will last?

[closeupready]

42. We'll just have to raise the top marginal tax rates, that's all. They benefitted

from this phoney run-up so they can pay for the bailout.

[scisyhp1]

46. To put it in prospective $2 trillion is about $7000 per every

American head. Substantial amount, to be sure, but not at all
astronomical, if shared equally among all, as they seem to be
determined to do. That will come to roughly $25,000 per average
household. Let's say they could finance it over 5 to 6 years -
with interest it will cost an average family about $35,000 or
$6000-7000 per year. So it is reasonable to expect the standard
of living to drop by about 15% on average, or in material terms
one less new car for each family over that period. That is, of course,
painful, but quite survivable. I would take such a scenario in
a heartbeat, but I am afraid the $2 trillion estimate is an optimistic
one. In all probability it will end up being twice or thrice that,
and will likely have to be born disproportionately by the poorest
ones. Then we are talking about over 50% decline in consumption for
a large part of the population. It is hard to see how that could be
endured without a massive social cataclysm. The only way to avoid
such an outcome is to impose most of that burden on the rich and
super-rich. In fact, if the rich are smart, given the alternative,
they should be lining up with their volantary contributions as we speak.
Wealth will have to be redistributed in any case, it's the survival
of the system itself that is at stake now.

[melody]

48. I'd be more than happy to pay 6K a year to keep us from meltdown

If my husband and I can do that, certainly the mega-wealthy can pony up.

[nadinbrzezinski]

47. Worst ... Austerity package coming down the pike

[Kablooie]

49. So where is the safest place to put your money?

[Hekate]

50. I keep trying to get a grip on it, but my night-time dreams keep involving packing to move, too late

It's a recurrent nightmare.

For the average person (like me) I do recommend watching PBS--both the News Hour and Bill Moyers bring on high quality guests to talk about the economy. Unlike Keith and Rachel, both of whom I like very much, the PBS format allows for extensive interviews. They don't talk down, but they understandable.

The situation is dire. I want to say that as individuals we can survive, but I know that too many cannot and are going under even as we speak. One poster here recently brought me to tears by recounting how a debt collector emptied her savings and checking accounts, with her first notice of that a refusal of her card at the grocery store. All I can say is that as individuals, those of us who can help others should pledge to do so.

If McCain wins, the government's response to the financial disaster will be a continuation of Bush's hollowed-out FEMA response to Katrina: You Are On Your Own, Suckahs. It will be all the more important for us to try to help one another as best we can.

If Obama wins, he will inherit a stinking mess. I have no idea how he will even come to grips with it, but I trust him to bring us together and to try his best to rectify something that was 25-30 years in the making. It will be all the more important for us to have his back and not engage in our favorite pastime of eating our own.

Hekate

[Firespirit]

51. This is going on the backs of Gen-Y, which has NOTHING

save five- and six-figure student loan debts, useless college degrees that get them nothing but benefitless retail jobs, and no ability to even consider home ownership except as a sick joke. The trust fund kids will get homes, but no one else from my generation. The GOP has made home ownership the exclusive province of the rich, for the new generation of workers. As bad as the retirees and boomers have it, I think my generation has it worse, because we have nothing to our names.

I am looking into various methods of "checking out," if for no other reason than to live in a country with a social safety net. We're fucked. I'm thinking we are fucked even if Obama gets elected. We needed a new New Deal, but there is no FDR in sight.