Why are all the "leaders" insisting the solution begins with MORE credit? Businesses do rely on availability of credit in order to operate. When this is not a viable option, the business strategy must be altered to the current situation. Increasing debt is the reason citizens are feeling strangled now. Therefore, having access to more is only going to exacerbate the problem in the long term. I own a business and my day-to-day operation is based on what money I have in the bank. I purchase supplies according to need and cost control. If I put my business in debt by borrowing money, it would leverage my competition in a downturn. Private funding for new businesses thru investors leaves government out of business.
The bank bailout provided funds to prevent a collapse of the financial industry. In fact, the Congress proudly passed the Bill singing their own praise about preventing a Depression. Well, with no stipulations given to the banks, they gladly spent the money on frivolous shenanigans and umbrellas while simultaneously hording the monies to solidify their positions. The government is failing to pursuit the bailout money because no legislation has been passed to add stipulations now. Improper conduct is rewarded by the banks with taxpayer money? It's never too late when taxpayer money is involved. The Democrats have been involved in the deceit which strikes me as perplexing given the election results.
The Bush administration has done nothing to address the issues responsible. He could have brought investigations into the fiasco which would have squarely placed the cause on high ranking Democrats. Instead, he remained silent which now puts his inaction as a supplement to the problem.
One solution the Congress should implement is every bank which received taxpayer funds must immediately provide every person with a mortgage an interest rate half of what the current rate is or that is in contract currently. This would allow everyone to free up sums of money to use on necessities they currently have. Also, this would allow people to pay down their mortgage faster if they choose.
I would like readers to make suggestions in order to write their Congressman here on this page. Any feedback would be appreciated, good or bad.
Grappledoctor
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Agreed, even if I feel you may not subscribe to my solutions:
Step 1. Nationalise all banks
Not because they are in trouble, but because they are:
a. a crucial catalyst to a market economy
b. they should NOT be driven by profit but by market needs
c. all problems stem from their chasing of profits. Bad loans increse profits in the short term AND stimulates economic activity that is both hollow and bound to implode in due course. No one was grumbling when banks were for decades giving out silly loans and investment bankers were converting them into a perforated global appendix.
If you find the above of any interest I will extend to step 2.
I have forcasted this depression since 2000 have observed the causes from close-in.
My suggestions for a gradual healing process are therefore based on my experience over the past thirty years.
Regards
danny (Malta - Europe)
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