So when is the economy going to tank?

[Graybeard]

I have been hearing for so long that '07 is going to be awful
for the economy. Predictions of recession, rise in inflation,
collapse of the housing and real estate sector, crash of the
stock market bubble, on and on.

 Does the transfer of power in congress to the Democrats
change these predictions in any way? And if not what should we
be doing individually to prepare? 

[Demeter]

1. Speculation Is the Feds Will Continue To Inflate

the money supply to let the stock market run up "consecutive gains and new highs" until the new year, but one has to wonder why other nations haven't just shut us down already. The longer the wait for the crash, the worse it's gonna be.

There are still people alive who lived through the last Depression. This coming one will probably kill them.

[NMDemDist2]

2. as more and more ARM mortgages re-set things will get very interesting

:scared:

[AX10]

3. The longer it expands, the harder the fall.

That would apply to this case only because of all of the outstanding debt we have accumulated.

[Dover]

4. I have a feeling micro-credit will become a necessity for many in the U.S..

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x22926

[Kazak]

5. "collapse of the housing and real estate sector"

Stupid question, but my wife and I feel we have outgrown our current (650 sq/ft) house, and have been looking into the possibility of moving into something bigger. Should be be reconsidering our thought process?

[FloridaPat]

7. With the housing market starting to collapse, you're in a good position

to wait for a good deal. Just stay away from the wierd mortgages and don't over extend yourselves.

[KharmaTrain]

6. It Is Collapsing...Just Look Around...

One of the dirtiest lies of this regime is how they "cut taxes". Sure, they stopped taking money from the bank accounts of the rich and got it through the run up in oil prices. The ripple in the nearly doubling of oil in the past 5 years is still tearing hell out of the economy. Money that could have gone into salaries or creating new jobs or expanding or R & D went into paying Exxon and through it higher taxes that ended up in government coffers. In a sadly perverse way, the price being paid to wage a war to protect oil companies profits and control were paid by the higher prices you pay at the pump. But that's just one aspect it's had on the economy.

The run-up in oil prices effect everything in the economy...from the extra farmers had to pay to run the combine, to increased shipping costs to additional costs in production to the overall increase of prices on virtually all vital goods that has torn hell out of what remains of the "middle class". Add to this the drain the defecits this regime has run up had put on the treasury as more and more money was borrowed just to keep the lights on. We've been paying for this through backdoor taxes. Add to this the ticking timebombs of ever growing personal debt and the bust in the housing and real-estate market and the ingredients are there for a shrinking economy. When I would run into Repugnicans who crowed about how boooshie boy cut their taxes, I asked about their property taxes or user fees or other costs that they're now paying they didn't in the past and tied it all to this regime's pillage of the treasury.

The "free market" economist (or psuedo-economists) claim that the government has no effect on the economy, that it reflects the marketplace and doesn't influence it. It's the same conveluted logic that says it's not the president that wastes the money, it's Congress that does...but it's the executive that prepares the budget...no they don't write they checks, but they sure put together the 'honey-do' list.

Reducing the taxes on the middle class...like abolishing the Alternative Minimum Tax, giving payroll tax relief and restoring budetary oversight will have a big impact and relief for the engine that drives the economic engine...you and me..."the consumer". In this age of greed, corporate America has taken the "consumer" for granted and attempted to legislate itself so the government is their insurance company...manipulated to make sure they're profits are protected above any other priority, including health care or education or other quality of life issues that would profit them in the long term with a more vibrant and stable economy.

FY '07 is already off to a crappy start...and by the time the Democratic Party gets control more than half the year will be done. Cutting wasteful spending...and there's plenty of it...restoring the pre 2001 tax levels (rising taxes my ass...it's called paying the piper) for those earning $100k or 150k or more a year, pushing to balance the budget, reform on earmarking and general oversight on all government spending can't hurt this economy can it?