GOP finally admits we're in a recession (that's the good news...)

[Lefty48197]

With economic indicators showing our nation sliding into recession for the last year or so, I was surprised to hear the
recent talk of an "economic stimulus package" to help ease the strain of the recession, which most people feel has
already arrived. I was even pleased to hear that the Republicans in Congress were not only admitting that we were in a
recession, but that they were even agreeing that something should be done about it.
I seems we have come a long way since the days of President George H.W. Bush, who couldn't even utter the word
"recession" during his re-election campaign in 1992. The media even mockingly used "the R word" to refer to the unmentioned
recession.
Admitting we have a problem is the first step to solving it. Doing something about the problem becomes the second step.
Unfortunately, President George W. Bush now says he wants an extension of his two major tax cuts for the wealthy to be
the cornerstone of his "economic stimulus package". I find that ironic, considering that he and his Republican friends who
used to control Congress told us that those two tax cuts would in fact create economic prosperity by themselves.
The fact that we are now entering a recession demonstrates that those tax cuts certainly didn't prevent our current
economic woes. Renewing those tax cuts sounds like an attempt to try the same policy that has already failed.
With housing sales down by about 20% nationwide in 2007, with the credit crunch caused by the scandalous behavior of mortgage
lenders, and with our national wealth heading overseas with every boat load of empty Chinese cargo containers, and middle east
oil tankers, it appears our economic problems will only get worse.
Just yesterday, the DOW Jones closed at 12,466. It closed at 10,507 on the day President Bush took office on January 20th
2001. This is less than a 20% increase in seven years, which translates to about a 3% annual increase, far below the
historical 14% annual increase in the Dow Jones average. As a result, our retirement savings accounts have suffered.
Most Americans have our retirement investments in 401K packages, yet the DJIA has stagnated for seven years.
And they wanted to transfer our Social Security accounts into the stock market?
Likewise, those who thought their investments in a home were adding to their personal wealth have seen that "paper wealth"
shrink by ten percent, or more over the last couple of years.
We've watched the value of our dollar crash during the last few years, while the cost of gold has skyrocketed, up
nearly 300% since George Bush took office. Even the Canadian dollar is now worth more than ours. We've also watched
the price of oil go from under $30 per barrel to about $90 a barrel during the Bush Presidency, and we've watched most of
the goods on our nation's retail shelves be replaced by goods made in China.
Clearly, our economic problems didn't start last month.
Now, President Bush is responding by saying that extending his tax cuts of 2001 & 2003 are the
solution to the problem.
This reminds me of President Clinton's comment during the 1992 campaign where he said
the definition of insanity was trying the same thing over and over again, and expecting a different result. My father taught me
decades ago that "two wrongs don't make a right". Extending the tax cuts that have done nothing to help our economy,
is clearly not the solution to our current economic woes.
I hope the new Democratic Congress will let those tax cuts for America's richest 1-2% lapse, and perhaps grant a tax
cut to those that are struggling in this weak economy. Perhaps doubling the personal exemption would be a good idea?
I don't see any benefit to making working families pay taxes, when they can't afford to pay their housing costs, when they
can't afford to pay for food and clothing, when they can't afford medical insurance and expenses, or when they can't even find
a job. Extending unemployment benefits would be another good idea.
Unfortunately, President Bush's solution to the economic recession seems to be "more of the same".
Now, more than ever, Americans need creative leadership from Washington. The Democrats in Congress can see to it that we don't
have to wait for a new President to get that creativity. I hope they realize this and I hope they follow through.

[sbyte]

1. More like Economic turmoil

It is all connected. The Sub-prime isn't the cause, it is an effect. But it is a bit like the domino's effect to the macro economic system.
One, the homes get foreclosed,
Two the banks loose money on the foreclosures,
Three the mortgage insurer's go bankrupt cause they never had enough reserves,
Four the pension funds take a big hit cause of toxic bonds infected with wasting assets.

Off-shore hedge funds are connected conduits of big New York banks (Think SIV). These hedge fund could use bonds as collateral to take out giant loans and then use that money to leverage deals for vulture capitalists or play the Forex, option or derivatives markets... Things that are essentially non-productive, they made money, but did not make objects of useful consumption.

Is providing stimulus going to do any good? I think that has already been tried. The financial stimulus tend to end up on wall street and back into the bigger banks and then on into the hedge funds. (it just appears that way.) Why, because banks made deals on the evaporating bonds that have them owing money. There is more financial obligations than there is real money,,, and that is the bugaboo. There will never be enough money to cover the debt that has been put on the table.

There are going to have to be bankruptcy's. But Who??? Should it be people with houses they paid too much for? If they go then the mortgage holders will take a big hit and then business bankers will start to go under. And then what...Panic.?

There is a solution, But it is a FDR type of solution.

You first will have to Grok the entire scope of the situation and see that it is real for yourself. Confirm that this is the problem.(is my thinking right?) That it is all connected and excesses will have to be taken out of the system and real productivity for real progress put back in. And that it be done for the good of the people and not for the good of the bankers...

[flashl]

2. Great post.