"House of Cards"

Honorable President Obama and Honorable Congressman Boehner, I am calling on you and your fellow Republicans and Democrats to end the Bush Tax Cuts for the wealthy.

Where are all the jobs the rich are and have been supposedly creating with their tax breaks? They’ve had these Tax Cuts a very long time now. The “Trickle Down” mentality has been going on for too long. Our economy has been a “House of Cards” and Tax Breaks for the rich have only succeeded in making the rich "richer".

Due to easy credit, the majority of the population has been living on credit with no real money. The Credit hemorrhage has been happening since the late 60's when credit became readily available and has been on going for four decades. (The crash of '29 is also linked to living on too much credit, albeit only one of the variables.) Inflation of products and Necessities began in the late 70’s. The norm became overspending on consumer products, while also paying too much for housing, food, insurance and medicine. If credit was not easily available prices could not go so high as “what the traffic will bear” would have been in place. These “Necessities” have also been charged on credit and even the poor have had credit cards.

The rich have grown richer and the poor grew poorer in the past 30 years due to people spending money they don't have. This has given the “Producers of Products” wealth and the majority of the people a false belief that they are rich due to their spending ability and accumulation of "possessions" (while ignoring their debt). It became natural to live in debt so one could live well (beyond their means). There continues to be many Middle Class people who are living on their credit cards every month to make ends meet just for Necessities and eventually they will become the "New Poor". Necessities just cost too much and have been luxuries for too long.

How can you fix this economy that has come to this current state? Currently, the majority of the people can only pay for bare necessities and cannot buy products or even food: The food stamp numbers have had a tremendous rise as well as the poverty and homelessness populations risen over the past 30 years. It does not help the economy to make the Middle Class the Poor Class and the Poor Class, Homeless.

The Middle Class is living from Paycheck to Paycheck. In fact a lot of Middle Class Retirees have moved to Mexico over the past 15 years because they can't afford the basic necessities on their Social Security Benefits and Savings. And, what do you think of the American Migrant Working Class whose homes are Vans? That's another population that continues to rapidly grow. All "The empirical evidence" that I've read and seen (with my own eyes) is that trickle down doesn't work. I believe my own observations and research before I believe a lot of twisted and slanted propaganda.

How do you propose that we extend and pay for unemployment benefits so the 2 million unemployed don't become homeless in three months? To the 7 million who would have lost benefits before the end of next year? This is the "let them eat cake philosophy" and “charge it” mentality that has helped increase the National Debt over the years. There are 34 million people out of work due to the global recession. 60 million people are now in poverty worldwide. Proposing deep cuts to public services, reducing global assistance will continue to make it all much worse.

What is the reason the working people have to bear the brunt, rather than the wealthy? The government employees have taken a pay cut and an example of one dangerous job are those who track illegals crossing the borders at night. It’s been said there is waste in government, but there is also waste on the other side. What is the reasoning that a corporation needs five private jets and why does the CEO need six houses, a yacht and several cars? There is too much waste and everything is out of balance, including nature due to excessive pollution.

I ask again, where are all those jobs the wealthy tax cuts have generated?

This economy is not going to be “repaired” in a year when we will face these issues again. And in 2012 this economy might (hopefully) improve somewhat, however it will take many more years to become stable. I can’t see improvement happening when the majority pays too much for necessities and is unable to purchase much else. In the meantime the National Debt is on the back burner and will increase. We’re losing time and revenue that is desperately needed for public services for the people.

Interesting predictions by "Peter Schiff" 2006 - 2007

It's interesting to watch this video : Peter was right.

http://www.youtube.com/watch?v=2I0QN-FYkpw

I'm not advocating the total elimination of credit. People used to use "lay-a-way" to buy and bought houses they could afford, lived within their means and we had a very healthy economy in the 50's, 60's and maybe even the 70's. Credit was gradually getting out of control in the late 60's. i was offered a credit card in college!!!! So it took awhile, however, the "advantage' of credit in our society has finally caused the bubble to burst and no one can afford to help the economy as they are all in debt to their Credit Cards .... even the employed are too busy paying of debts in a panic to buy anything and the Middle Class has borne the brunt of all of the "easy" credit in housing, consumer credit, insurance, etc., etc., etc. etc., etc.

There could be a good balance between capitalism and socialism. Neither system works and too many people have suffered and are suffering as a result of this.

The Problem with Credit

Cash only was a better system. Prices have risen too high as a result of credit, creating a society that lives beyond its means and requires living constantly in debt for necessities such as housing, insurance and medical. If people use credit then prices rise too high (don't have the cash, just charge it). If it was a cash only society the prices would match the salaries of the majority in order to sustain a healthy economy. For a very long time the rich have been the only real consumers who could afford what they buy. For the past 30 years everything has been "unaffordable" for the Middle Class, thus credit has been abused and "what the market will bear" has been out of proportion to the reality of what is. No credit would also eliminate Greed.

Lillian Abel: Housing Market, Article by Michael Snyder

Lillian Abel: Housing Market, Article by Michael Snyder

Housing Market, Article by Michael Snyder

15 Signs The U.S. Housing Market Is Headed For Complete And Total Collapse
Michael Snyder, The Economic Collapse | Aug. 20, 2010

Read more: http://www.businessinsider.com/15-signs-that-the-us-housing-market-is-headed-for-complete-and-total-collapse-2010-8#ixzz0xehK5xBj

The U.S. housing market is dying. You will only hear hints of this on the mainstream news and from the politicians in Washington D.C., but as statistic after statistic continues to roll in, the reality of what is happening is becoming very difficult to deny.

Up until the end of April, the giant tax credit that the U.S. government was bribing home buyers with helped stabilize the real estate market, but now that the tax credit has expired the decline of the U.S. housing market has resumed. Mortgage defaults continue to set new records. Foreclosures continue to set new records. Home repossessions by banks continue to set new records. The number of homes being constructed and the number of Americans applying for home loans is at stunningly low levels.

The truth is that this is not a short-term downturn in the housing market. During the past two decades, an insane amount of debt fueled an artificial housing bubble that drove home prices to ridiculous levels. Now the U.S. housing market is trying to correct itself, and no matter how many trillions of dollars the U.S. government throws at the problem the fundamentals of the marketplace are still going to have their way eventually.

The U.S. economy is in decline. The employment situation is going to go from bad to worse. Americans without jobs are Americans that cannot buy homes. Millions of Americans who are employed are finding it increasingly difficult to make it from month to month. The truth is that there is no way that Americans can afford the ridiculously inflated home prices that we have seen over the past decade any longer.
So, yes, the U.S. housing market is headed for a complete and total nightmare.

* Home Sales Drop 27 Percent In July And Things Are Only Going To Get Worse For The U.S. Housing Industry
* Bancor: The Name Of The Global Currency That A Shocking IMF Report Is Proposing
* This Economy Is Ripping The Dignity Of Millions Of Unemployed Americans To Shreds

So exactly how bad are things out there right now?

The following are 15 signs that the U.S. housing market is headed for a complete and total nightmare....

Read more: http://www.businessinsider.com/15-signs-that-the-us-housing-market-is-headed-for-complete-and-total-collapse-2010-8#ixzz0xecOnNks

Commen Sense Investment

If a home cost half million there are only a few people who could afford to keep up the payments on such a house. If a person who buys a house for say even 350,000. What happens if they loose their job? Do they have enough savings to cover the high payments every month until they're employed again? What happens if they don't get all the "raises" they expect over the next 10 to 20 years? Will they still like living from paycheck to paycheck and putting all their money in the house? What happens if the value of the house goes down and not up due to ability to pay by most of the population? Housing is not a good investment when it's high priced.

Paying 350,000. for housing for a person who lives from paycheck to paycheck is insane. All they need to do is loose their income and they loose everything. If a person pays 80,000 for a house then they most likely will survive on savings they have until they are employed again. Also, that half million dollar home may go down in value if the wages of people are still below the cost of housing. No one will be able to buy it at that price. This is happening now to people who paid over 500,000 for their home. They can't sell it. It's only going to get worse not better. Housing prices have not hit bottom yet.

The Economy; It's broke

The cost of housing is still too much to pay for a necessity. People are paying 50 to 75% of their income for housing. There's a continuing growing population of homeless who can't afford housing at all. Children are living with their parents and more than one roommate are needed to afford one apartment. We're making a whole subculture of homeless in an "affluent society". That's just plain horrible.

The government will never be able to "fix" an economy where everyone whose employed is over their heads in debt and most of the population can't afford a roof over their heads. The flow of buying and spending will come to a compete stop. It's doing so already .... the brakes just aren't completely floored yet so the worst is yet to come, unless the high price of necessities stops cold.

Still too high

The astronomical cost of housing, still far over what the majority can afford without having disposable income to stimulate the economy is one of the major reasons for unemployment.

"Investors" turned to real estate many years ago instead of the Stock Market. This is one of the major reasons for over inflated housing costs. The average consumer then got involved and jumped in buying homes they really could not afford. Still today there are many people out there who now think housing is an "investment" which it is not. It is a long term investment, which in 30 years will increase somewhat in value (economic history of real estate) , however, not the enormous profits which people expect to acquire immediately. It is true that many became very rich when they sold the homes and buildings that they paid 30,000.00 for half a million up to a million. Houses are not worth that much and the consumer needs to wake up and say NO! to ridiculous prices. I've also read several articles recently that people who are millionaires and live well pay low prices for their homes (as low as 30,000).

Finally someone gets it !!

Deflation Would Be a "Good Thing": Peter Schiff's Plan to Help Struggling American

Posted Jul 23, 2010 07:30am EDT by Aaron Task in Investing, Recession


'The idea deflation would be a "good thing" certainly puts Schiff at odds with most mainstream economists. Then again, that's where he's most comfortable.

And given his view the dollar is a "bottomless pit," it's not surprising Schiff believes inflation is a much greater threat than deflation.

"The real evidence of inflation is that the Fed is creating too much money," he says. "Interest rates are at zero, the Fed's balance sheet ballooned and now they're talking about cranking up the purchases [of mortgage-backed securities and agency debt] again. That's more monetization -- more money printing. That is the very definition of inflation."

As a result, Schiff believes Americans are soon going to be paying more - much more - for food, clothing, energy, healthcare and even consumer electronics. But prices of financial assets and real estate? They're not going anywhere but down in real (i.e. inflation-adjusted) terms, according to Schiff.'

Deflation Would Be a "Good Thing": Peter Schiff's Plan to Help Struggling Americans

Interesting statistics from Michael Snyder, "The Business Insider"

The Middle Class in America Is Radically Shrinking. Here Are the Stats to Prove it
http://finance.yahoo.com/tech-ticker/the-u.s.-middle-class-is-being-wiped-out-here's-the-stats-to-prove-it-520657.html
Posted Jul 15, 2010 02:25pm EDT by Michael Snyder

From The Business Insider

Editor's note: Michael Snyder is editor of theeconomiccollapseblog.com

• 83 percent of all U.S. stocks are in the hands of 1 percent of the people.
• 61 percent of Americans "always or usually" live paycheck to paycheck, which was up from 49 percent in 2008 and 43 percent in 2007.
• 66 percent of the income growth between 2001 and 2007 went to the top 1% of all Americans.
• 36 percent of Americans say that they don't contribute anything to retirement savings.
• A staggering 43 percent of Americans have less than $10,000 saved up for retirement.
• 24 percent of American workers say that they have postponed their planned retirement age in the past year.
• Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32 percent increase over 2008.
• Only the top 5 percent of U.S. households have earned enough additional income to match the rise in housing costs since 1975.
• For the first time in U.S. history, banks own a greater share of residential housing net worth in the United States than all individual Americans put together.
• In 1950, the ratio of the average executive's paycheck to the average worker's paycheck was about 30 to 1. Since the year 2000, that ratio has exploded to between 300 to 500 to one.
• As of 2007, the bottom 80 percent of American households held about 7% of the liquid financial assets.
• The bottom 50 percent of income earners in the United States now collectively own less than 1 percent of the nation’s wealth.
• Average Wall Street bonuses for 2009 were up 17 percent when compared with 2008.
• In the United States, the average federal worker now earns 60% MORE than the average worker in the private sector.
• The top 1 percent of U.S. households own nearly twice as much of America's corporate wealth as they did just 15 years ago.
• In America today, the average time needed to find a job has risen to a record 35.2 weeks.
• More than 40 percent of Americans who actually are employed are now working in service jobs, which are often very low paying.
• or the first time in U.S. history, more than 40 million Americans are on food stamps, and the U.S. Department of Agriculture projects that number will go up to 43 million Americans in 2011.
• This is what American workers now must compete against: in China a garment worker makes approximately 86 cents an hour and in Cambodia a garment worker makes approximately 22 cents an hour.
• Approximately 21 percent of all children in the United States are living below the poverty line in 2010 - the highest rate in 20 years.
• Despite the financial crisis, the number of millionaires in the United States rose a whopping 16 percent to 7.8 million in 2009.
• The top 10 percent of Americans now earn around 50 percent of our national income.

Continuing Housing Crisis

Housing is still unaffordable for most of the population. The Crisis will not be over until people can pay 25% of their income for housing. Now they are paying as much as 70% just for housing. How can the economy improve if people don't have money for anything else except their housing?

See following interview:

http://finance.yahoo.com/tech-ticker/hope-you-enjoyed-the-housing-recovery-...-because-it%27s-history-says-suttmeier-482467.html?tickers=FNM,FRE,XLF,XHB%20,HD,LOW,WFC

Greed in America

There has been little regard of how a lopsided economic society is destroying America from the bottom up. The high cost of living with the people paying as much as 75% of their income for housing due to this necessity becoming an "investment" has contributed to the Great Recession. It has taken awhile for the burden of the high cost of necessities to manifest within the middle class of America. However, it manifested itself 30 years ago when housing prices went through the roof and caused thousands of low-income people to become homeless. America turned a blind eye to the homeless crisis, which has continued to grow as a blight on this land of "prosperity". And now it's obvious that the people are paying too much for basic necessities as the Middle Class are being crushed under the burden of paying for basics. I am surprised it took so long for the public to just stop buying and charging and living beyond their means. This, of course, contributes to unemployment. How can unemployment be eradicated when no one can or should "buy stuff" and more importantly, pay for the necessities (housing, insurance, health care, food) that we've grown accustomed to, such as affordabale housing.

The Rich will always be rich and the poor will get poorer. I would like to include opinions on the "feeding" of the rich and the neglect of the average person in this country, as well as the poor.

Bob Herbert wrote in 2007 in his NY Times column: “Even as the Wall Streeters are high-fiving and ordering up record shipments of Champagne and caviar, the American dream is on life support.” We would all later learn that this time was the start of the Great Recession.

The following is an excerpt from the New York Times October, 2009 article by Bob Herbert

"We’ve spent the last few decades shoveling money at the rich like there was no tomorrow. We abandoned the poor, put an economic stranglehold on the middle class and all but bankrupted the federal government — while giving the banks and megacorporations and the rest of the swells at the top of the economic pyramid just about everything they’ve wanted.

And we still don’t seem to have learned the proper lessons. We’ve allowed so many people to fall into the terrible abyss of unemployment that no one — not the Obama administration, not the labor unions and most certainly no one in the Republican Party — has a clue about how to put them back to work.

Meanwhile, Wall Street is living it up. I’m amazed at how passive the population has remained in the face of this sustained outrage.

Even as tens of millions of working Americans are struggling to hang onto their jobs and keep a roof over their families’ heads, the wise guys of Wall Street are licking their fat-cat chops over yet another round of obscene multibillion-dollar bonuses — this time thanks to the bailout billions that were sent their way by Uncle Sam, with very little in the way of strings attached."

"Safety Nets for the Rich" by Bob Herbert, New York Times, Oct. 19, 2009

The high cost of Greed

It's all about greed for power and money with the Republicans. I find it amazing that more people can't see through their double speak. It's never going to get better in this country until people start doing "the right thing" for the entire community. It's not about "I" anymore. It's got to turn to "we". The moral measure of this country is it's awareness of the suffering greed has caused on all levels as a result of the high cost of necessities; housing, insurance, medical care and recently food has been added to the mix.

The economy cannot recover until these high cost are  addressed; The Middle class and the poor are now one in this country. The economy is fueled from the bottom up and not the top down.

Stimulus Plan

http://www.youtube.com/watch?v=J28tLOpzfpA (Housing is more affordable in those middle states)

Regarding the above link: Perhaps a Stimulus Plan that lowers the price of necessities such as housing, food and health insurance would leave room to buy cars, furniture, and clothing, etc. When the people are not buying "stuff" the community looses jobs. AND when the cost of all of this is too high, people use credit to buy rather than pay cash or save money to buy a car. Once they are in over their heads for necessities as well as their "stuff" they cannot buy anymore. There is a limit as to how high prices can go before the whole thing falls like a house of cards.

http://www.observer.com/2009/homelessness-rise?page=all

Regarding the above link: This has been happening in New York for the past 30 years. When I lived there I watched the homeless population skyrocket when the cost of housing rose to astronomical proportions. All of a sudden the homeless were very visible on the streets (1980's). Before this time it was a "big deal" to see a homeless person and somewhat shocking. Now it's commonplace.

I've worked with the homeless since 1992 in California. During this time I've watched as the population grew from a handful of single men on Skid Row to single men and single women (housing prices rose) to single men and single women with children (housing prices rose again) to mom's and dad's with their children (housing prices rose once again) The price of housing has been out of reach for many for a long time and the middle class are now becoming homeless as well.

The cost of everything is out of proportion to what people are earning and therefore they must always be in debt and one paycheck from homelessness. The Housing Bubble broke, however, housing is still too expensive as the price of homes went too high over the past thirty years. The cost of home ownership is beyond the income of most.

We are building a whole culture and population of homeless that are now into second generations. What do you think the future of this will bring?

More thoughts on the high cost of Necessities today and Economic Depressions

"Those who cannot remember the past are condemned to repeat it." ~ Philosopher, George Santayana The "Great Depression" happened (coincidentally) when the people started living on credit and fell deep into debt. Another interesting history fact: Pullman created his own community and town in Chicago. He paid low wages and charged high rent to the people who lived in his town. The people were paying high costs for necessities and the economy of this town failed. Sound familiar? The consequences of Greed? "Pullman's misfortune came during the depression which followed the Panic of 1893. When demand for Pullman cars slackened, the Pullman company laid off hundreds of workers, and switched many more to pay-per-piece work. This work, while paying more per hour reduced total worker income. Despite these cutbacks, the Company did not reduce rents for those that lived in the town of Pullman. The Pullman Strike began in 1894, and lasted for 2 months." (wikipedia) "Pullman ruled the town like a feudal baron. He prohibited independent newspapers, public speeches, town meetings or open discussion. His inspectors regularly entered homes to inspect for cleanliness and could terminate leases on ten days notice. The church stood empty since no approved denomination would pay rent and no other congregation was allowed. Private charitable organizations were prohibited." (wikipedia) "The U.S. economy declined in 1893-94, causing a nationwide depression. To offset any losses to his investors and himself, Pullman drastically cut productivity in his factory and reduced wages by one-third without reducing rents, utility charges, or store prices. Since he deducted rent (approximately $14 per month) before paying wages (approximately $16 per month postreduction), workers found themselves taking home scant pay for their labor, if any at all. The press censured Eugene V. Debs for taking a stand with the Pullman workers. (CHS) Soon desperate Pullman workers and their families begged the company -and Pullman himself- to reduce rents during the tight economic times, but their pleas fell on deaf ears. In spring 1894, many Pullman workers turned for help to the American Railway Union (ARU), led by Eugene V. Debs. After Pullman refused to discuss employee concerns, 90 percent of his workers went on strike on May 11. ARU was sympathetic and called for a national blockade and work stoppage against all railroads using Pullman cars. Railroad management responded by firing all ARU members." (http://www.chicagohs.org/history/pullman/pul6.html)

Continued Notes on the Declining Middle Class

Jobs are being lost everyday due to the decrease in spending. Foreclosures are continuing and unemployment is rising due to low consumer spending. People are not able to "spend" as they are paying too much for the basic necessities of life such as housing, food and medical expenses. Many are loosing their homes and medical insurance as I write this and the homeless population continues to grow. Over the past twenty years there has been a constant increase in the population of the homeless in this country. The economy is fueled from the bottom up and not from the top down. The rich will only get richer and the poor will get poorer with this upside down way of conducting business in this country. Necessities need to cost what everyone can afford.

Notes on the Declining Middle Class

Money and Corporations have a stranglehold on the public. Insurance companies and banks have total control of the people's financial behavior. When everyone survives by living in constant debt due to the high cost of necessities such as housing, utilities, insurance and health care, they are doomed to pay the high interest on debt for their lifetime. Just 30 years ago the people could pay off their debts long before retirement, and 20 years ago "homelessness" was rare. If living on credit were nonexistent, everything would be affordable. A lot of people are paying as much as 75% (25% is acceptable) of their income on housing alone.

The high population of homelessness can never be an accurate count as there are many homeless (formerly of the middle class) who live in their car, RV or boat out of necessity. They don't want to call attention to their plight.

The banks are paying low interest on savings and charging high interest on loans. The bank executives are receiving obscene bonuses.