US Government Shut Down - new elections for senate and house of rep.?

[tar]

iNow,

 

Well I certainly would rather see the talent in charge, in charge of the Fed, than see me in charge. But no one, in any walk of life, at any level of reading and intelligence, can understand all the consequences of every decision and action and non-action they take. We generally try and avoid the mistakes of the past. And try to repeat the successes.

 

There are different types in the Fed. Hawks and Doves. The hawks are not evil and the doves are good. Or vice a versa. There are different metrics to consider at the Fed, as surely as there are different metrics to consider in Congress, or different metrics to consider when swansonT and I look at the same chart.

 

But I am not completely ignorant on the topic. I listen to Bloomberg, I watch the market, I was an Accounting major for a short time in college, I took Economics courses and Business Law and graduated with a Business Degree. I often spoke person to person with an accomplished economist who lived in an apartment building where I was a building maintanence man, back in my college days. Long talks, and I worked for him briefly, helping him organize his library and papers. I was even invited to watch a Fed meeting of some sort at my school library. I don't remember the Economist's name, nor the level of Fed meeting I attended, nor certainly the details or nature of the meeting, but there might be some things about economics and the operation of the Fed, that I am accidently holding in my subconscious mind, something I might know, that raises concern in my mind about the current QE going on to long, that you should not characterise simply and only as me feeling "icky" about it. My "feelings" might have some basis fact, and might be indicative of my desire to make sense out of the situation, taking all that I know, and care about, and all the "metrics" that I am currently considering at many different levels of human behavior and human interaction.

 

And I do not know how the dates of the QEs you referenced corresponded with a longer than a decade period in recent Japanese economic history where there was very little growth, for a long time, while they had a negative real interest rate environment (I traveled to Japan several times in that period and saw the "employment" of men and woman as billboards, wearing the sandwich signs), or how your German dates correspond to the "wheelbarrows of cash" it took to buy a sandwich.

 

This thread is about whether or not we should replace the bums currently in Washington, and replace them with a new set of bums, that might accidently do a better job at representing us. So our leadership, and the nature of it, who is capable and trustworthy, and who is not, is what we are debating. My take, my opinion, holds no special weight. I have no particular credentials, no particular facts, no superior view of how to run the place. Just trying to make sense of it, like the rest of us, and make sure we don't cut off our nose, to spite our face, and slide down one slippery slope, to avoid sliding down a different one.

 

It is obvious to all of us that the tea party is to blame for this. AND it is obvious to all of us that the President has the power and the responsibilty to lead our Nation out of this. I'm thinking he will, because I trust his capability and intent. I trust the capability of the Fed. But this does not mean I don't think Obama is too socialist in lean, or that the Fed is not using a potentially problematic tool, and there will come a point at which we must pay the piper.

 

Regards, TAR2

 

And don't forget that Janet Yellen, while being the best woman for the job, was AT the helm out West, as a Fed Governor, at ground zero of the subprime crisis, and admits to some mistakes or at least to some actions that might have been taken, that were not.

 

Government support and programs, intended to allow everyone to be a home owner, resulted in some large number of people getting into mortages they could not afford. It was everybody's fault. No one considered that people should not be "given" a weight they can not pick up, on their own.

Fed chairman, has grown in to a position that amounts to the individual in that position, being the most powerful person in the world. I am questioning this, with the dual question of not only whether or not this power should be "given" to an individual, but is this a weight that anybody could pick up, on their own.

Saw today, that my company, a global company, had yearly sales of 23 billion dollars. There are a tremendous amount of industrious and capable people, toiling for a year, to design and build and perfect and sell and maintain the equipment and processes we sell and maintain. Whole organisation, many families, much economic activity. 23 billion a year.

 

65 billion a month, with a stroke of pen, "cause we need it" to avoid depression? What does that mean? Where is the sense and reality in that. How can they know what massive shifts in value and ownership of "real" wealth, such an "experiment" will cause?

Edited October 12, 2013 by tar

[iNow]

And don't forget that Janet Yellen, while being the best woman for the job, was AT the helm out West, as a Fed Governor, at ground zero of the subprime crisis, and admits to some mistakes or at least to some actions that might have been taken, that were not.

 

Government support and programs, intended to allow everyone to be a home owner, resulted in some large number of people getting into mortages they could not afford.

Actually, that's a long debunked myth, too... but whatever. I'm sort of bored having discussions with people where facts carry no weight. If you're curious about my position, I presented it in some length here: http://thescienceforum.org/topic435.html

 

 

65 billion a month, with a stroke of pen, "cause we need it" to avoid depression? What does that mean? Where is the sense and reality in that.

Your questions have answers if you're willing to look into them. I'm trying to assist you in that. Here is more:

 

http://economistsview.typepad.com/economistsview/2009/12/conducting-monetary-policy-when-interest-rates-are-near-zero-will-it-work.html

 

http://delong.typepad.com/sdj/2011/06/should-we-do-another-round-of-quantitative-easing-debate-with-jim-grant.html

[tar]

iNow,

 

"As investigative reporters and Congress' Financial Crisis Inquiry Commission have all shown, it was deregulation mixed with irresponsible and potentially illegal practices by private firms on Wall Street that caused both the bubble and the collapse."

 

I read a little of the links. I have heard the arguments before. I was alive and aware during the last 60 years. I don't disagree with the above, but saying these things were causal does not remove our reponsibility and complicity in creating the regulatory and financial and societal framework in which economic power can be created or assigned, without the proper human understood capital to back it up.

 

We are humans, and our economy is a social thing. Power is central, as Galbraith suggests, in the equation.

 

We cringe when economic power is stolen, by deciept or force.

 

We question it as a "wrong" thing, when economic power given by us, is misapplied, and contrary to our intent in the agreement. Its a breach of social contract.

 

When mom and pop put their money in the bank, and are paid interest to keep it there so others can borrow it and pay interest to start a business or get some education or buy a house or a car or a refrigerator and pay some interest and promise to replace the money eventually, we have a banking system. There is collateral involved. Human promises and agreement, carefully documented as to who has control of the resources involved and who will regain, gain, or lose that value in the event of a breech of contract or default.

 

Banks create money in a way so simple, we cannot link it up with human promises. They can loan out more money, more value, than is represented by mom and pop's deposit. This creates a velocity of money, a multiplying effect, where more businesses can be started, more refrigerators can be purchased, more student's can pay tuititon, than if only the amount of mom and pops deposit was available.

 

Hence the banks through law and agreement, amplify the economic value and power of mom and pop's deposit, but the deposit has to exist, and has to be honored. The loan has to be repayed. If loans are given out and they are too risky, and are hence NOT payed back, the bank has failed to properly assign control of mom and pop's economic power to the receiver of the loan.

 

The bankers "caused" the subprime crisis by too much leverage. Creating value that was not properly backed up and putting it in the control of parties that did not have the where-with-all to repay.

 

But the parties that failed to repay are not immune from complicity in the disaster. Their failure to repay was also a "cause" that created the crash. If one dollar in deposits can back 10 dollars in loans, the failure to repay 1 dollar in loans, wipes out the value represented by one dollar of deposits (which are backing 10 dollars of loans, each). This causes a rather big issue, when a large percentage of loan takers default. And we have been scrambling to rebuild the equity, since.

 

So it is NOT a myth, that providing mortgages to people who could not repay, was causal in the crisis.

 

Regards, TAR2

There is plenty of blame to spread around.

So when I ask you "whose" econmic power is being weilded when Bernake buys 65 billion in securities and loans, and takes those potentially "bad" assets onto the left side of the balance sheet, and balances them with the liability of 65billion in U.S. dollars which wind up in someone's control, I am asking whose deposit is at risk, and who is responsible for repayment. That is what I "do not understand". And that is the question which YOU have not answered.

What wild swings of wealth and value and ownership of risk and responsibility are created?

 

Who winds up controlling the wealth, and is it appropriate?

Has AIG "replaced" the value that was risked and lost? And if so, why are they still solvent? They pledged to cover the losses with the insurance they offered to the banks. Whose deposit of wealth was lost? In the end. Or have we not yet reached the end? Have any debts been forgiven? And if so, on whose authority, and whose deposits have been devalued or lost?

Edited October 12, 2013 by tar

[iNow]

So it is NOT a myth, that providing mortgages to people who could not repay, was causal in the crisis.

Nice try at moving the goal posts. You spoke of government programs trying to ensure everyone had a home was causal. That's what I was rebutting, not that people who could not pay held the mortgage.

[tar]

Who has paid the piper, who is paying the piper, and who has yet to pay the piper?

So what's your point? That the banks are crucial to our banking system?

We already know that. And acting within both the intent and the letter of the law is required, and when the law or intent is broken, we can not abide by it.

 

This still leaves us responsible for setting the rules, within which the banks should operate. And still leaves us responsible for any unsustainable or irrational or unintended conditions that arise.

We still have to "keep it real", and operate with the understanding that if we ask for trouble, we are liable to get it. So why ask for trouble? Why engage in unrealistic manuevers, whose negative consequences should be able to be forseen?

Pizza hut, somewhere over in Asia, had a problem with their "one dish" salad bar, when it became quite a fad and challenge for patons to build elaborate towers and works of art out of courses of cucumbers with carrot scaffolding, which completely bypassed the intent of the rule, but adhered to the letter, since only one plate was at the base.

 

Pizza Hut, closed the salad bar.

 

Never underestimate people's creativity and ability to counter the intent of a law, if staying within the letter is all that you are counting on.

 

So conversely, if our intent was to make home ownership available to people who realistically could not afford home ownership, and both the intent and the letter of the law were followed, and the effort wound up failing, and causing a crisis, any wrongdoing, or self interested actions on the part of banks or loan originators which "caused" the crisis, are secondary, to the initial intent, which forced unrealistic demands onto the system. We wanted to do something that turned out to be impossible to do, because it made no economic sense. The banks "had to" charge higher interest to riskier loans and this in turn made them harder to pay back, and all the insurance in the world, government guarenteed or not, was not enough to pay the piper, when the loan defaults began to mount.

Hey. I have a procedural objection. When I just posted, I already had a negative on my post. Which must have been to my piper comment, which was meant to be a addendum to a previous post, but was part of my last post which was contructed as a response to iNows cross post.

 

Just as clarification, the negative point may be refering to the first line, the piper comment, which was made before, or during iNows post. Everything after the first line, was constructed after iNows, post, and may or may not deserve any pluses or minus, but should be taken as "starting from" the -1 of the piper line.

Edited October 12, 2013 by tar

[michel123456]

Has anyone a solution to provide for today's issue?

[tar]

 

Additional "culprits" in the crash, where complicated instruments, packages of loans, that "contained" various amounts of sub-prime loans, and therefore were not worth full value. Sorting this all out and marking to market or not marking to marking, writing down the loans and taking losses, the inability of loan garanteeors to obtain the cash to cover the losses, etc. etc. caused the chain affect, and subsequent failure of certain institutions.

 

But they did not call it the sub-prime crisis, for no reason. It was the "bad" subprime loans, that were at the root. So any complicity we as a nation had in having those loans originated, is still a valid concern, in determining the "cause" of the crisis.

[michel123456]

That is not a solution.

 

I think time has come to stop analysis.

 

Don't you have a "non assistance a personne en danger"* article in your U.S. legislation?

 

*translation from French not needed I hope.

[jduff]

If the 16th gets here with no plan in place. I will be withdrawing almost every dollar that is in both my savings and checking account. As well as selling off what stock I do have. Call me a prepper or whatever. I dont care. Will go into survival mode if the U.S defaults. Will avoid banking and banks as necessary. For those wanting to know the truth. Our government is insolvent concerning our debt and deficit. Austerity only trickles it along. Its about over and if I were you. I would prepare! Banks have threatened to shutdown if the U.S goes into default. So only hard currency will be available.

 

This is not just a U.S only event.

 

Now if they do come up with a plan and avoid a default. All the above will be on hold. Discussions of blame, arguments of who to hold responsible, what to do, are at a point of no return. As far as the government and our administrations view. With socialist policy. Money only lasts til the other peoples money runs out. The biggest fault with socialism. We are at that point! Greece, Canada are the next two to fall then us. All coming sooner if the default happens.

 

Cannot actually believe some still propagate a solution. When all you are doing is placing a bandaid on a huge gash that is bleeding one out! It ends, no more free bus ride.

 

Time to start over.

[Phi for All]

That is not a solution.

 

I think time has come to stop analysis.

 

Don't you have a "non assistance a personne en danger"* article in your U.S. legislation?

 

*translation from French not needed I hope.

 

What's happening now, with the shutdown, is outside our normal process. Votes have been cast (legally), laws written (legally), funds allocated (legally). The shutdown tactic to make changes without due process needs to be reviled in the media, rather than portrayed as some kind of "standoff" or "battle" or even a "difference of opinion".

 

One side didn't have the votes to make this happen but is being allowed to shut us down because so many people misunderstand what's really happening. I think if they did, even if they don't like Obama, they'd agree that what Cruz and his group are doing is ultimately bad for our democracy, and VERY hypocritical since they're waving their pocket Constitutions as they step all over it.

[michel123456]

If the 16th gets here with no plan in place. I will be withdrawing almost every dollar that is in both my savings and checking account. As well as selling off what stock I do have. Call me a prepper or whatever. I dont care. Will go into survival mode if the U.S defaults. Will avoid banking and banks as necessary. For those wanting to know the truth. Our government is insolvent concerning our debt and deficit. Austerity only trickles it along. Its about over and if I were you. I would prepare! Banks have threatened to shutdown if the U.S goes into default. So only hard currency will be available.

 

This is not just a U.S only event.

 

Now if they do come up with a plan and avoid a default. All the above will be on hold. Discussions of blame, arguments of who to hold responsible, what to do, are at a point of no return. As far as the government and our administrations view. With socialist policy. Money only lasts til the other peoples money runs out. The biggest fault with socialism. We are at that point! Greece, Canada are the next two to fall then us. All coming sooner if the default happens.

 

Cannot actually believe some still propagate a solution. When all you are doing is placing a bandaid on a huge gash that is bleeding one out! It ends, no more free bus ride.

 

Time to start over.

You don't seem to fully understand the measure of what you are saying. Yes of course you will withdaw your savings. You and another hundred million citizens. Do the banks have the money? the answer is NO. So what will happen is that the banks will close their doors. We have seen that before.

If you are lucky enough to get your money back, beware the thiefs that will go from house to house knowing that everybody has a fortune under his blanket. And that's the good part of the picture...

 

 

What's happening now, with the shutdown, is outside our normal process. Votes have been cast (legally), laws written (legally), funds allocated (legally). The shutdown tactic to make changes without due process needs to be reviled in the media, rather than portrayed as some kind of "standoff" or "battle" or even a "difference of opinion".

 

One side didn't have the votes to make this happen but is being allowed to shut us down because so many people misunderstand what's really happening. I think if they did, even if they don't like Obama, they'd agree that what Cruz and his group are doing is ultimately bad for our democracy, and VERY hypocritical since they're waving their pocket Constitutions as they step all over it.

That is still analysis. You are blaming the one.

I don't care.

I need a solution, you need a solution, everybody need a solution.

Maybe you need a mediator from the United Nations? They could send you a Belgian, they are very good at finding equitable solutions.

--------------------

Note: closing the banks always happen on the weekend.

Edited October 12, 2013 by michel123456

[jduff]

You don't seem to fully understand the measure of what you are saying. Yes of course you will withdaw your savings. You and another hundred million citizens. Do the banks have the money? the answer is NO. So what will happen is that the banks will close their doors. We have seen that before.

If you are lucky enough to get your money back, beware the thiefs that will go from house to house knowing that everybody has a fortune under his blanket. And that's the good part of the picture...

 

Well, I do have a family, I live in a rural area. and each one of us including my grandchildren are proficient with a firearm. I will take my chances. Our neighbors are doing the same if a default goes through. There is a reason I moved from the bay area(Silicon Valley) to the middle of this country in a rural area. Planning is important. You see to plan with law is subject to disaster. Planning with the precept of chaos(lawlessness) is the only way.

 

Also am glad I can hunt and fish. As well as grow a garden!

 

I will pray for those in non rural areas. That actually think they have a grasp on his or her life. I wish them the best! But when it comes to the survival of family or me. They come first!

 

I feel bad for those who are in big cities. The survival rate for them is low considering the circumstances if a default occurs.

 

I miss being able to surf, going to debates, the mountains, but I would not trade this place or environment for anything. Will defend this home with my life

 

Can you say the same?

[iNow]

The point is that when you withdraw your money like that you are a direct part of the exact problem you're seeking to avoid. Everyone drawing their money from the market and from banks all at once is exactly what causes the crash. If people kept a level head and stayed put we'd be in significantly safer shape.

[Bill Angel]

There is a way the USA could meet its obligations without the debt ceiling being raised: by selling off Government assets to foreign countries. How much do you think the USA could get if it sold one of its aircraft carriers to China? The government could swap an aircraft carrier for some of the debt China holds, thereby creating some room below the debt ceiling for additional borrowing to fund US Govt operations.

[tar]

jduff,

 

I think the best option we have, is to stay together. Whatever comes. That is why we are called the United States.

 

I think it not wise to think you can protect your farm against the world.

 

When I was young I used to imagine having a tank, safe from most any attackers that would protect me from the Soviets and any other attacker. I felt this would give me independence and safety. I finally figured out, that even the tank could be defeated, in any number of ways, and dropped the image.

 

The best way to go, was to rely on the public bomb shelters being built, and the stores of canned and packaged food being amassed, and to hope that our collective anti missle system would work and stop the threats.

 

I learned that the U.S. is full of people already working to make everybody safe, keep everybody free from tyranny, and generally help each other maintain a structure and environment where we could make things as good as we together, could make things good.

 

Any one of us is 100 times, a thousand times, a million times, better off, than we would be without the rest of the U.S. and the world around us.

 

Prior comeing back to the thread this evening, and hearing your plan, I was thinking about iNows question to me, as to what would I rather was done by the Fed, than what they are planning to do, on a data dependent basis. I didn't have an answer, and I was starting to see his point, and now after hearing your plan, I think I completely see his point. We already have the Fed, doing our bidding. They are the BEST there is, to run the Federal Reserve Bank, and monetary policy. And that is the job we have given them. They already are considering all the concerns I have raised and all the democrats have raised, and all the republicans have raised and all the questions raised by their counterparts, around the world. Our banks needed time to recapitalize. Privite citizens needed time to recapitalize. Cut down on debt and increase their savings, AND we needed fiscal stimulus, AND we needed lower than low interest rates to keep the place from locking up in fear.

 

As has already been pointed out to you, your fear, and my fear, is not helpful. What is required is our confidence and our efforts to build the best and sell it to the world and each other, and buy the best, from everybody else that makes it for us.

 

Not to try and sabatoge the system we have together built and maintained, but to trust each other, to do our jobs and make it work as best we can make it work, for our own good, and for the good of everyone else reliant on it working.

 

Still leaves room for improvement, and comprimise, breaking down barriers that cause inequities, and tightening up areas of the system that are being abused. or that have grown too big for their britches. To elimnate prograns that have outlived their usefullness or have morphed undesireably from their orignal purpose.

 

But the MOST important thing, is to do it together. We cannot do it without the farmer, or the banker, or the doctor or the lawyer, or the teacher, or the builder, or the saleman or the researcher or the technician or the specialist, or the performer.

Its all of us together that make it work.

 

What we need therefore, is not fear, not blame, not jealousy and disrespect...but trust. Trust in the capable to continue doing their part, and for everyone to be applying their best efforts and best ideas, with the goal of making society work, for everybody involved.

 

Otherwise, out there on the farm, you will have no weather report and won't know when to plant and harvest, cover and protect. You will have no seed, no gas, no fertilixer, no parts for the tractor, no nails to put the shutters back on, when they blow off. You will live in constant fear, because you will not know what is over the next rise, and wouldn't have a cavalry to come to your rescue or a doctor to go to if a weird green fog rolled over the hill. Or a hoard of slightly better armed folks came your way, to take what was yours. No police to call, remember, you divorce us all, when you take the independence course.

 

Regards, TAR2

And you would have no one to complain to or talk to, or question and learn from on scienceforums.net.

Edited October 12, 2013 by tar

[jduff]

The point is that when you withdraw your money like that you are a direct part of the exact problem you're seeking to avoid. Everyone drawing their money from the market and from banks all at once is exactly what causes the crash. If people kept a level head and stayed put we'd be in significantly safer shape.

I think the part you may not be getting is it is unavoidable. Leaving it in the bank you lose all of it. Taking it out for hard currency you retain a little value. Barter ect.. Just think! We had three presidents assassinated over interest free currency. William McKinley http://en.wikipedia.org/wiki/William_McKinley , James Garfield http://en.wikipedia.org/wiki/James_A._Garfield and John . F. Kennedy http://whatreallyhappened.com/WRHARTICLES/JFKvFedR.html and http://en.wikipedia.org/wiki/John_F._Kennedy . If you notice with John Kennedy, Wiki did not mention the monetary affair with him . Also attempts on Andrew Jackson http://en.wikipedia.org/wiki/Andrew_Jackson .

 

The reality that I think many do not understand. Is as long as the U.S dollar(Petro-dollar) exists in its current form. You as well as the government will not escape debt or a deficit. Even if our deficit were to be paid off to the penny(which it cant) we would still owe just from interest alone! At this point, there will never be a zero sum nor a surplus. Our deficit is now exponentially intertwined with our government. As is most of the worlds economy. Austerity was meant to slow it down. But now not even that will work.

 

Bankruptcy, Recession, and Depression are ingrained in our monetary system. This is to insure the system can keep going and the very few select bankers that are part of the fed will continue to make profit. This of course all at the cost of us. You life, your imagined wealth, your imagined prosperity. If you are not the 1% at the top. You are in the same boat as the rest of us. That 1%(Democrats used that slogan 99%-1%) does not care about you or your family or what you do. As long as it does not interfere with the system. The trick for them to us. Is to get us to believe that Keynesian economics works. It works for them. For the rest of us, we are just slaves to that system.

 

Just a note! Every policy bill or law that exists is to keep that system going. It does not matter what type of government system is in place. Communism, Socialism, Dictatorship, Monarchy, Democracy, Republic, Commonwealth. As long as the system flows everything else is just a tool!

 

Like I said in a earlier post. It is not about party, its much bigger than that. You have limited time to prepare. I would use it wisely.

 

Edited October 12, 2013 by jduff

[doG]

The bankers "caused" the subprime crisis by too much leverage. Creating value that was not properly backed up and putting it in the control of parties that did not have the where-with-all to repay.

Actually it was ultimately the Community Reinvestment Act that caused the subprime crisis. Before that law was passed there were no bad loans backed by the government. Had the government kept its nose out of it, never given birth to Fannie Mae and Freddie Mac, the framework for the subprime crisis would have never evolved in an industry that previously restricted loans to fully qualified borrowers.

[jduff]

jduff,

 

I think the best option we have, is to stay together. Whatever comes. That is why we are called the United States.

 

I think it not wise to think you can protect your farm against the world.

 

When I was young I used to imagine having a tank, safe from most any attackers that would protect me from the Soviets and any other attacker. I felt this would give me independence and safety. I finally figured out, that even the tank could be defeated, in any number of ways, and dropped the image.

 

The best way to go, was to rely on the public bomb shelters being built, and the stores of canned and packaged food being amassed, and to hope that our collective anti missle system would work and stop the threats.

 

I learned that the U.S. is full of people already working to make everybody safe, keep everybody free from tyranny, and generally help each other maintain a structure and environment where we could make things as good as we together, could make things good.

 

Any one of us is 100 times, a thousand times, a million times, better off, than we would be without the rest of the U.S. and the world around us.

 

Prior comeing back to the thread this evening, and hearing your plan, I was thinking about iNows question to me, as to what would I rather was done by the Fed, than what they are planning to do, on a data dependent basis. I didn't have an answer, and I was starting to see his point, and now after hearing your plan, I think I completely see his point. We already have the Fed, doing our bidding. They are the BEST there is, to run the Federal Reserve Bank, and monetary policy. And that is the job we have given them. They already are considering all the concerns I have raised and all the democrats have raised, and all the republicans have raised and all the questions raised by their counterparts, around the world. Our banks needed time to recapitalize. Privite citizens needed time to recapitalize. Cut down on debt and increase their savings, AND we needed fiscal stimulus, AND we needed lower than low interest rates to keep the place from locking up in fear.

 

As has already been pointed out to you, your fear, and my fear, is not helpful. What is required is our confidence and our efforts to build the best and sell it to the world and each other, and buy the best, from everybody else that makes it for us.

 

Not to try and sabatoge the system we have together built and maintained, but to trust each other, to do our jobs and make it work as best we can make it work, for our own good, and for the good of everyone else reliant on it working.

 

Still leaves room for improvement, and comprimise, breaking down barriers that cause inequities, and tightening up areas of the system that are being abused. or that have grown too big for their britches. To elimnate prograns that have outlived their usefullness or have morphed undesireably from their orignal purpose.

 

But the MOST important thing, is to do it together. We cannot do it without the farmer, or the banker, or the doctor or the lawyer, or the teacher, or the builder, or the saleman or the researcher or the technician or the specialist, or the performer.

Its all of us together that make it work.

 

What we need therefore, is not fear, not blame, not jealousy and disrespect...but trust. Trust in the capable to continue doing their part, and for everyone to be applying their best efforts and best ideas, with the goal of making society work, for everybody involved.

 

Otherwise, out there on the farm, you will have no weather report and won't know when to plant and harvest, cover and protect. You will have no seed, no gas, no fertilixer, no parts for the tractor, no nails to put the shutters back on, when they blow off. You will live in constant fear, because you will not know what is over the next rise, and wouldn't have a cavalry to come to your rescue or a doctor to go to if a weird green fog rolled over the hill. Or a hoard of slightly better armed folks came your way, to take what was yours. No police to call, remember, you divorce us all, when you take the independence course.

 

Regards, TAR2

And you would have no one to complain to or talk to, or question and learn from on scienceforums.net.

I enjoyed your post TAR. You are right! The 99% of us should stick together. My hope is to restart our government and get rid of the fed. What is needed is to get rid of those who control the fed. The system is designed to not make that happen. Morality only exists if it helps keep the feds system in motion. In our current day, just here in the U.S. What do you think the hot issues are really about? Global Warming? Obama care? Everything you think is a issue is most likely used to keep the system going. While at the same time depriving us of humanity. Making us more and more enslaved. What do you really think the Patriot Act is about? Homeland Security? TSA, NSA? To protect us from terrorism? It is to insure that we remain slaves. Heard talks about martial law lately? I am sure you have. What do you think that is really about?

 

I am not saying these things to make you afraid. I am saying these things so you can go past the fear and replace it with what is truly needed. We have 2 years at tops! Most likely sooner than later! Each of our presidents including this one are just puppets to the system.

[iNow]

Actually it was ultimately the Community Reinvestment Act that caused the subprime crisis.

That narrative is plainly false with even a cursory view of the data.

 

The CRA did not apply to the private firms that inflated the subprime bubble.

The CRA did not affect the vast majority of subprime loans.

The CRA was irrelevant to the subprime boom, which was overwhelmingly driven by loan originators not subject to the Act.

Most of the high risk loans were not eligible for the CRA credit.

The market share of CRA-regulated lending institutions actually DROPPED significantly during the housing bubble, and have steadily declined since 1977 when the CRA was passed.

Mortgages originated by CRA backed institutions went into foreclosure 60% less than mortgages originated at non-CRA backed institutions.

 

http://www.americanprogress.org/issues/economy/news/2010/12/21/8832/politics-most-blatant/

CRA-regulated institutions, primarily banks and thrifts, accounted for only 28 percent of all mortgages originated in 2006 (the height of the bubble), a significant decline from their share in the late 1990s and early 2000s. As with Fannie and Freddie, this market share drop occurred in lockstep with the rise of the housing bubble.

 

In contrast, the market share of private mortgage securitization, a pillar of the shadow banking system that was not backed by the federal government and not regulated for safety and soundness in the way that Fannie, Freddie, and regulated banks and thrifts were, rose sharply and contemporaneously with the rise of the housing bubble. In 2002, the share of mortgages originated by private securitization was just over 10 percent of the total market. Over the next four years, this share grew rapidly, accounting for nearly 40 percent of all mortgage originations by 2006. As a percentage of all mortgage-backed securities, private securitization grew from 23 percent in 2003 to 56 percent in 2006.

Even if you ignore all of the above, and even if none of those facts existed, here's one other point where the assertion that "the Community Reinvestment Act caused the subprime crisis" fails profoundly:

 

If the CRA is, in fact, responsible for the housing bubble and the flood of unsustainable mortgages that originated during the 2000s, then how come there were analogous and parallel housing and financial bubbles that occurred at the same times in other countries such as Iceland, Ireland, the United Kingdom, and Denmark... none of whom were subject in any way, shape, or form to the CRA passed in the US?

 

The boom and bust was global:

 

 

 

The narrative you proposed simply doesn't fit the data. You know what does? We had an unregulated and overleveraged shadow banking system that systematically underpriced credit risk, and all at a time when there was a huge existing demand for private mortgage-backed securities. That led to certain behaviors and lower thresholds for loan acquisition that led to a bubble and the bubble ultimately popped. It wasn't the CRA, though. To say it was is to ignore the reality before us.

 

http://www.ritholtz.com/blog/2011/11/examining-the-big-lie-how-the-facts-of-the-economic-crisis-stack-up/

If the CRA was to blame, the housing boom would have been in CRA regions; it would have made places such as Harlem and South Philly and Compton and inner Washington the primary locales of the run up and collapse. Further, the default rates in these areas should have been worse than other regions.

 

 

What occurred was the exact opposite: The suburbs boomed and busted and went into foreclosure in much greater numbers than inner cities. The tiny suburbs and exurbs of South Florida and California and Las Vegas and Arizona were the big boomtowns, not the low-income regions. The redlined areas the CRA address missed much of the boom; places that busted had nothing to do with the CRA.

 

 

Even if our deficit were to be paid off to the penny...

Deficits don't get paid off. Debts do. Your inability to tell the difference calls into question your other suggestions and also the wisdom of your advocacy for bank runs. Edited October 13, 2013 by iNow

[jduff]

.

 

 

Deficits don't get paid off. Debts do. Your inability to tell the difference calls into question your other suggestions and also the wisdom of your advocacy for bank runs.

First Inow, I do not like tools. Especially ones who are programmed! Shows exactly how really high someones I.Q really is!

 

Lets first look up deficit. Here is the definition just for you. Deficit: The amount by which a sum of money falls short of the required or expected amount; a shortage.

 

The difference between the shortfall and the actual amount is turned to debt. As our government does one of two things to counter it. 1. Has the fed create more money to pay the debt with interest! Or 2. sells bonds to another party with interest. Both incur more debt. Which is cyclic and brings about a bigger deficit. Then is repeated.

 

If you cannot understand this concept, then perhaps you should study Keynesian economics. But to help you out, make sure you read this link:http://www.usdebtclock.org/ That is actual debt!

 

As to your opinion, it is just that, believe it or not! In either case you get the real repercussion's very soon. Why I dont follow blind men! They tend to have serious shortcomings!

Edited October 13, 2013 by jduff

[Endy0816]

First Inow, I do not like tools. Especially ones who are programmed! Shows exactly how really high someones I.Q really is!

 

Lets first look up deficit. Here is the definition just for you. Deficit: The amount by which a sum of money falls short of the required or expected amount; a shortage.

 

The difference between the shortfall and the actual amount is turned to debt. As our government does one of two things to counter it. 1. Has the fed create more money to pay the debt with interest! Or 2. sells bonds to another party with interest. Both incur more debt. Which is cyclic and brings about a bigger deficit. Then is repeated.

 

If you cannot understand this concept, then perhaps you should study Keynesian economics. But to help you out, make sure you read this link:http://www.usdebtclock.org/ That is actual debt!

 

As to your opinion, it is just that, believe it or not! In either case you get the real repercussion's very soon. Why I dont follow blind men! They tend to have serious shortcomings!

 

 

Federal Deficit: An excess of the federal government's spending over its revenue

 

A deficit may lead to debt, but they really are two different things.

 

You reduce a deficit through balancing revenue and spending. You reduce a debt by making payments.

 

The payments could come straight from tax dollars or you can increase the total amount of money in circulation. Either option is equally valid if not equally wise.

[doG]

 

 

 

 

As I said before. The government should have kept their nose out of it. The government put pressure on lenders to make loans available to people that couldn't afford them and never would have been offered them if it wasn't for the irresponsible legislation that pressured lenders to do so.

[tar]

jduff,

I don't think you're looking at this right. You imagine that 99% of us, are friends, which we are, and then proceed to build fantasies of plots against you administered by 99% of the people, which don't have your exact view of the world.

I absolutely DO NOT want the Fed to be desolved. I absolutely do not want the excellence we have obtained in all areas of human endevor to be thrown away, on me or you or anyone else, feeling a little marginalize or out of control of the world.

You see, you cannot both build an image that everybody is for you AND that everybody is against you.

I have an issue, personally, at my company. We bought a big, well run sales and service organisation, which, having world class leadership, and processes, and "best practice" ways of doing things, was given the purse strings, and proceeded to dismember our way of doing things, and replaced much of the "old school" people that our organisation consisted of. Long story to deliniate all the "problems", all the marginalization of what I considered the important and valuable aspects of both our business, and the human judgement that made it work. I, like you, am skeptical about "drinking the kool-aid" and submitting to an unhuman "system". But, it is still my company, and considering the folks that are now running the place, as "them", and not "us", is not helpful. When the president has an "initiative", it becomes my initiative, and its my job, to do my job in such a way that it both fulfills the initiative AND relies on me doing all the things I know to be right to do. Difficult when "stupid" things are done, or things that wipe out old understandings and working systems, to install this more "efficient" tool, that takes more manpower, money and attention to institute, than to do it the "old way", just to wind up continuing to get the job done, inspite of the new tool, not because of it. BUT, I have also noticed that things DO work better if you "see the point" that the new thing has been brought in to do. Turns out, it is EXACTLY the thing that YOU yourself wanted to do, only now you can do it more quickly, and with better coordination with the rest of your organisation. Your human judgement is still required, but you have the assistance of everybody else's as well.

So be careful with your assignment of "we" and "they". You cannot love the world, except for those daft Chinese.

Regards, TAR2

If you destroy the Fed, its my Fed you have destroyed, you become my enemy. And I am currently your friend. So the divorce would be completely your fault.

The "we" side is already established. We have been working on it since 1776.

 

DONT shut us down.

Besides, there is no "type" of person that constitutes 99% of the population, so whatever type you are, should not, and cannot define your image of "we". Not when you are talking about a country with a resident population of 316,842,000 people. If you are a white anglo-saxon protestant male and that is the only "type" that you are counting as we, you are quite outnumbered, by other "types".

 

If you are upset that a white anglo-saxon protestant male is not in the Whitehouse, then you do not believe in democracy.

Edited October 13, 2013 by tar

[imatfaal]

!

Moderator Note

 

doG iNow and others

 

Can we keep the argument over the cause of the sub-prime crisis to another thread. I will try to go through and see if the thread can be unpicked - but in the meantime please keep to the more narrowly defined topic of the USA Government Shut-Down

 

[doG]

Are any other causes of the current shutdown off limits? One reason we are currently faced with the magnitude of government spending that has contributed to the current need to raise the debt ceiling again is the extra spending that was caused by the subprime bailouts and related financial repercussions throughout the economy. I really don't care about the cause of that issue, only that poor and irresponsible government regulations are a contributor to the current budget problem.