Dec 04 2008
The Difference
I’ve finally heard some solutions to some of our economic problems that sound simple and make sense. The difference between giving a person or organization life sentence in a wheelchair and helping a person or organization though physical therapy to walk on their own. Wheelchair is easy and less chance of recovery. Physical therapy is much harder on everybody, but in the end there’s a better chance of walking. (the solutions are on the bottom of this article)
Some current disasters, some solutions, some questions to ponder, and other voices ahead:
Auto industry going out of business because of poor business practices and ridiculous Union labor benefit guarantees:
Solution One: Bail them out, give them taxpayer money (your money) to pay for poor performance. Continued poor practices to continue—why shouldn’t they continue, they were just rewarded.
Solution Two: Let (the system run it’s course) them be protected by Chapter 11 protection (a system to help people reorganize their business plan) Several airlines have been operating under Chapter 11 protection for years now, service didn’t stop! Part of the natural business cycle is that some businesses will fail and it’s okay, someone else will pick it up if there is still a call for that business.
Question to ponder: why have we let some businesses or programs get so big that we cannot let them fail without catastrophic ramifications—is that part of a plan to prevent failure?
Home owner’s ARM has just adjusted and they can’t pay the new mortgage, the value on the house is now less than the purchase price.
Solution One: Bail them out, give them taxpayer money (your money) to allow them to have something they shouldn’t have had in the first place.
Solution Two: Part1: Foreclosure and the people have to rent. Part 2: Let them be protected by claiming bankruptcy protection (a system to help people have their debt removed and not allowed to borrow for a length of time)
Question to ponder: Why can government be allowed to spend more than it takes in regular circumstances? Individuals aren’t allowed this luxury
The only money social security has is the money that’s brought in through payroll taxes. We are going into a cycle where more people are receiving benefits than paying into the system—what will that time bomb do to the financial wellbeing of the world economy?
Question to ponder: Why was the Social Security “locked box” Savings account allowed to be used for anything other than was intended?
2 possible solutions (the ones I mentioned above) to jump start our current home mortgage crisis are:
The Fannie Freddie deal: have mortgages readjusted to fair market value, reset the mortgages, and when you sell the house you have to split any profit 50/50 with the bank. This will give the option to people upside down on the house an way to stay in the home, reduce the end of the world anxiety, and become partners on a home you would be kicked out of.
The Fed lowering the mortgage rate to 4.5% for anyone who can qualify—this will lesson their monthly payments by a substantial amount—which will allow people to stay in their homes, reduce the end of the world anxiety, give people more money to spend in other places that will benefit the economy.
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Hank Paulson throws more crap at the wall, hopes it sticks By Michelle Malkin
Henry Blodget has a good analysis of Paulson’s latest effort at throwing crap at the wall and hoping it sticks: “Best case scenario, in our opinion, the new plan will slow the rate at which house prices are falling and make the ‘adjustment’ to the new reality less violent.
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UAW to renegotiate labor terms, suspend jobs bank by Pam
AP – The United Auto Workers said Wednesday it is willing to change its contracts with U.S. automakers and accept delayed payments of billions of dollars to a union-run health care trust to do its part to help the struggling companies secure $34 billion in government loans.
