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| How Does the Bail Out Effect Me?; What does this all mean anyway? | |
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| Topic Started: Oct 10 2008, 11:14 PM (67 Views) | |
| Blue Collar | Oct 10 2008, 11:14 PM Post #1 |
Super Moderator
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Ok first off, I hate giving opinions when I know the Truth Hurts. So what is this truth I'm referring to? Well it starts with Mr. & Mrs. Average Middle Class American and let's not forget the term 'Middle Class' has taken on very new definitions over the years. When I was much young, Middle Class, given the medium wage at the time, seem to refer to those making enough money to purchase a modest home in a reasonably clean somewhat quiet neighborhood where the adults in the household were able to also own at least one if not two vehicles. You bacially had the basic comforts of living based upon what a 40 hrs per week salary provided. Americans have always been reared to believe we are somewhat entitled to live as we see fit. And subsequently as we see fit is and has always been far beyond our means. Ok what does that mean. Well if you make a salary of 40K per year, own a Mortgage payment of $1185.00 monthly with a $350 new car loan and necessary utilities that add up to an estimated sum of $500 per month, then we throw in the cost of food and basic staples such as personal, household and home maintenance items which we'll say add up to approx. $75 per week times 4 equaling around $300 per month, barring any major emergency expense, already without deeper calculations, we have an gross financial obligation of $2,335.00 per month. Now this figure is modest as I see it and it doesn't take into consideration heating & vehicle fuel cost over a month's time. So we have a Gross Salary of $40,000 per year and after taxes we are probably looking at between $27,200.00 to maybe $29,150.00 of spendable liquid assets. $2,335.00 of monthly expenditures times 12 months equals $28,020.00 yearly, which is obviously more than we bring home. So we've learned that owning plastic (credit cards) can provide a quick and easy way of obtaining those necessities when your personal cash flow is lower than what is required at that time. What Americans don't understand is, Banks that offer credit don't do it because they like you and are just a bunch of nice people, they do it to make a profit like any other business in the way of Interest Rates. But those interest rates are so transparent that it's perfectly understandable to overlook them when signing on the "Customer's Copy". The point to remember in all of this is, this adds up and compounds and as time moves forwards, those who don't simply pay off their credit card balances in full but instead roll those rates into subsequent months not only place financial burden on your Household but they accumulate to a point where they become too difficult to pay at all, therefore far too many decide not to pay or pay whenever they can. I believe you are beginning to see the picture here? So if we begin to see the big picture, when you multiply these bad debits by millions. Now every average American is not to blame entirely but merely contribute to the downfall. Many of these bad debits are also written to corporation. So now instead of Mr. Middle Class defaulting on a loan for $100,000 or more, you have corporations defaulting to the tune of Millions. So in order to recoup some of this lost revenue, Banks invest your money in qualified commodities providing those commodities are thriving. But when the Market is down because Consumer spending is down, coupled with unpaid loans from private and corporate ventures, the Banks are in big trouble. Therefore, in come the loan guarantees offered through Financial structures such as Fannie Mae & Freddie Mac. Our Government established these agencies that wrote these guaranteed loans were based upon a stable cash flow and trading market. But if that Market becomes unstable it will threaten the very fiber of America. This is of course a very simplistic explanation of how things got so damn bad and if I were into writing more, I would provide a much more accurate picture which wouldn’t do anything to instill confidence in the forth coming years. My next Post is what I feel we can do about it and how it will effect our lives as we know it and what if any predictions in the Bible resemble what is going on in today’s time. Edited by Blue Collar, Oct 10 2008, 11:16 PM.
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| John | Nov 1 2008, 02:20 AM Post #2 |
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Super Moderator
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Many in our government would have us believe that the cause of this mess was that they did not regulate enough. But they are wrong. What the government needs to do is regulate itself, not the markets. Government interference, some would call it manipulation, is only going to result in a more massive economic mess in the future. What the market needs to do is clear the books of all bad assets and allow the good/strong/solvent companies rise up. But instead, our representatives in DC decided to mortgage our futures in order to reward the loser banksters and their shareholders with our tax dollars by bailing them out. The bailout was not a "rescue" as they have been trying to brand it for a while. It was a fleecing of the American people in complete disregard of the 90% of Americans who were against it. |
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9:03 PM Nov 26