Second Financial Economic Crash Coming - Huge & Soon

[Hedgehog]

Pretty much what we have discussed ont he boards.

Look.

I also think debt is bad, and that the housing market is way overpriced.

But I believe it is because "the government" failed to raise the taxes, to raise the fed rate, to slash subsidies during the economic boom in the early 2000's.

All these things would've cooled off the economy and led to less spending, less mortgaging (since the rate was higher), more saving (yes, the rate is higher for savings accounts too), lower houseprices (fewer would have speculated in houses, since fewer would've gotten mortgages).

And not to mention, a balanced budget with a healthy surplus.

Then, once the economy started to slow down, the taxes could be lowered, the fed rate could be lowered, and subsidies or infrastructure projects could be implemented.

In order to avoid a shut down of the economy and get it cruising again.

But apparently this makes me a socialist?

No offence, but all I see in Ron Paul is a guy who believe that we have to let the market take care of itself. Let it self-regulate.

I just don't believe that.

What I think has been fundamentally wrong over the last few years instead, is that the Fed and the White house administrations have listened too much to what Wall street wants.

Of course they want low rates and low taxes, even during economic booms. That will increase their wins.

But only temporarily. Because it's a gigantic bubble.

The White house and the Fed acted irresponsible. They should have cooled off the economy much more than they did, and much earlier.

Especially the White house is to blame. Running up a deficit. Introducing unfinanced tax cuts. Despite the economy booming.

That's just horrible.

Again, I don't see what so great with Ron Paul. He's got some things half right. But when he claims that it won't work to buy up bad dept he is just wrong.

When the banks were saved here in Sweden, it worked out just fine.

Today, Sweden and the Swedish banks are handling the current financial crisis better than many other countries, perhaps because of the past experiences of the 90's where the lesson was learned to be more fiscally responsible.

Eg, I think the last 10 years the Swedish budget has been balanced with a slight surplus. Next year is projected to be break even.

But that came after the early 90's where the economy was fcuked up good.


Regarding the US housing market:
The prices will fall even if the government help solidify the banks. But if you don't buy up the bad dept, and let the banks collapse, you may soon have millions of people on the streets without no homes.

Is that a price Ron Paul is willing to pay?

[Bindare_Dundat]

Regarding the US housing market:
The prices will fall even if the government help solidify the banks. But if you don't buy up the bad dept, and let the banks collapse, you may soon have millions of people on the streets without no homes.

Is that a price Ron Paul is willing to pay?

Government help in action. 

Remember Hope for Homeowners? We didn't think so. In July, Congress passes the only housing rescue to date: a plan to guarantee up to $300 billion worth of mortgages and prevent more than 300,000 foreclosures.

But to participate, banks must take steep losses -- and doing so is voluntary. The anti-climactic upshot: A piddling 321 applications have been filed since the program's Oct. 1 launch - and not one loan workout has been completed, according to the U.S. Department of Housing and Urban Development.


So that, plus the 700 billion TARP program and the banks still havent done shit to help homeowners. Thats a trillion dollars so far to "help banks, help homeowners". Who knows how much more money went to banks and other institutions that they wont tell us about?  How much more money do we have to spend to help "some homeowners" at the expense of crushing the dollar, which in turn effects everyone?

[MuscleMcMannus]

Look.

I also think debt is bad, and that the housing market is way overpriced.

But I believe it is because "the government" failed to raise the taxes, to raise the fed rate, to slash subsidies during the economic boom in the early 2000's.

All these things would've cooled off the economy and led to less spending, less mortgaging (since the rate was higher), more saving (yes, the rate is higher for savings accounts too), lower houseprices (fewer would have speculated in houses, since fewer would've gotten mortgages).

And not to mention, a balanced budget with a healthy surplus.

Then, once the economy started to slow down, the taxes could be lowered, the fed rate could be lowered, and subsidies or infrastructure projects could be implemented.

In order to avoid a shut down of the economy and get it cruising again.

But apparently this makes me a socialist?

No offence, but all I see in Ron Paul is a guy who believe that we have to let the market take care of itself. Let it self-regulate.

I just don't believe that.

What I think has been fundamentally wrong over the last few years instead, is that the Fed and the White house administrations have listened too much to what Wall street wants.

Of course they want low rates and low taxes, even during economic booms. That will increase their wins.

But only temporarily. Because it's a gigantic bubble.

The White house and the Fed acted irresponsible. They should have cooled off the economy much more than they did, and much earlier.

Especially the White house is to blame. Running up a deficit. Introducing unfinanced tax cuts. Despite the economy booming.

That's just horrible.

Again, I don't see what so great with Ron Paul. He's got some things half right. But when he claims that it won't work to buy up bad dept he is just wrong.

When the banks were saved here in Sweden, it worked out just fine.

Today, Sweden and the Swedish banks are handling the current financial crisis better than many other countries, perhaps because of the past experiences of the 90's where the lesson was learned to be more fiscally responsible.

Eg, I think the last 10 years the Swedish budget has been balanced with a slight surplus. Next year is projected to be break even.

But that came after the early 90's where the economy was fcuked up good.


Regarding the US housing market:
The prices will fall even if the government help solidify the banks. But if you don't buy up the bad dept, and let the banks collapse, you may soon have millions of people on the streets without no homes.

Is that a price Ron Paul is willing to pay?

Solid argument.  Ron Paul is living in never never land in much of his ideology.  Lack of government intervention is as bad as too much intervention.  Like everything there needs to be a balance.  Our government has lost the ability to find that balance.  So we go back to social darwinistic economy?  Yeah real smart in the 21st century. 

[Hedgehog]

Solid argument.  Ron Paul is living in never never land in much of his ideology.  Lack of government intervention is as bad as too much intervention.  Like everything there needs to be a balance.  Our government has lost the ability to find that balance.  So we go back to social darwinistic economy?  Yeah real smart in the 21st century. 

Balance is key.

Government help in action. 

Remember Hope for Homeowners? We didn't think so. In July, Congress passes the only housing rescue to date: a plan to guarantee up to $300 billion worth of mortgages and prevent more than 300,000 foreclosures.

But to participate, banks must take steep losses -- and doing so is voluntary. The anti-climactic upshot: A piddling 321 applications have been filed since the program's Oct. 1 launch - and not one loan workout has been completed, according to the U.S. Department of Housing and Urban Development.


So that, plus the 700 billion TARP program and the banks still havent done shit to help homeowners. Thats a trillion dollars so far to "help banks, help homeowners". Who knows how much more money went to banks and other institutions that they wont tell us about?  How much more money do we have to spend to help "some homeowners" at the expense of crushing the dollar, which in turn effects everyone?

Where did I state that all kind of government action is great?

Or that the bailout is done right?

I think it was right to step in and avoid that the banks went under.

But I think that the US government should've done what many other countries did in November and December.

They should've temporarily partially nationalize these banks.

Eg, if Lehman Bros would've been partially nationalized and secured until the bad debt was gone, the markets may not have freezed up the way they did.

After a few years, once the debt and the problems are gone, the government would get out of Lehman bros.

The banks gets protection from the government and will avoid bankruptcy.

But at the same time, they won't be able to just fill their own pockets.

It's been done before, elsewhere.

Government action doesn't automatically mean it's something good.

Or something bad.

That's where Ron Paul is wrong.

He seems to be stuck ideologically with the whole laissez faire mindset of minimal government.

Regardless of how the reality looks, he refuses to look at any alternative theories.

But theories are just that.

Theories.

The reality is something else.

That's why many die hard neo liberals will tell you that UK did the right thing when they partially nationalized Royal Bank of Scotland and a couple of other big banks.

http://www.msnbc.msn.com/id/27078582/