So, u run an unlikely campaign, now ur president. Where do u start? Where is the line drawn? Somebody is going to have to get hurt. That's the cold hard truth. Tax the wealth has been the out, but they are few, and they can and will move. Now u have the middle class, a majority electorially. That parent who works 60hrs a week is not going to take kindly to u writing executive orders to tax them to give to Bobbie Jo and Barsheeka to have more babies. Mr. President, what do we do first?
Good points, someone IS going to have to get hurt. If I was in desperate need to revenue, yea damn straight I would tax the wealthy. Why? Because that's where the money is. It wouldn't take much percentage wise either. Consider that the top 1%. THAT'S 1%, as in 1 out of 100 hold 42.2% of all the financial wealth in this country. I wouldn't tax the middle class because that's a huge amount of people of which taxing would of course hurt (spending wise etc), and frankly there's no money there. The bottom 80% of this country only account for 15% of all the net worth. So yea, I would tax em, and tell them why. I doubt they would flee (though some of them would) from me raising taxes by 2-3%. Next, as far as Bobbie Joe goes I would figure out a way to create a capitalist-like welfare watch program. Hiring outside (non governmental) agencies to do the studies on who needs it and who doesn't. This would probably cost just as much if not more than some huge bureaucracy, but it would be much more efficient. Each family would have their own case worker or something like that. I think I would have to take the a similar role as one of those guys who big companies hire when they are failing. You know, its an outside guy with no emotional ties and he comes in and fires a but load of people, trims up all the fat, ruins lives but restores the company back to profitability within a few years. Anyways, good points. I don't have the answers, but that's what I would do if I had to make a decision in the next 45 minutes lol.
Detroit city council member's property taxes: $68 http://news.yahoo.com/s/ap/20090524/ap_on_re_us/us_detroit_city_council_watson http://www.joannwatson.com/JoAnn_Watson_Home_Page.html
Easy answer, now go sell that to ur corrupt board, all of whom have to go back home and get reelected b4 u do. This is why a president loses congress halfway through his first term if he tries to do 2 much. I think ur a thinker johnbig, but we differ on raising taxes on the rich. Trickle down does work, rising tides do raise all boats. Now if I run a business and U, Mr. President, reach into my pocket because I work harder, or smarter than my peers, Im not gonna like that too much. I might close up shop and move to Mexico, or I might lay off a lot of people. Cut taxes, Mr. President. Those that provide jobs can provide more jobs. They will buy more stuff. They will hire servants and landscapers. They will have new houses built. And if we overextend, Mr. President, let us die a natural death. Someone smarter will pick up the pieces. Eventually u are going to be in that tax bracket, my friend. Don't vote where u are, vote where ur going.
Back 2 the topic though. We have to let our system work. GM, BAC, AIG, they have to die a natural death. President Obama, is messing with the system. He should let things do what they do. Enforce anti-trust and worker safety and opportunity laws, and let America work. What he is doing now is forestalling the inevitable. He is keeping bad business models on life support. That ICU is burning a hole through our money. When the dollars starts slipping, investors r going to dump our debt. What then will we do?
Good points, and it would be stupid for me to say that it won't work, clearly it has in the past. I understand the idea behind dropping taxes, and I think that is absolutely the best solution, if it worked like that. I'm not convinced that it would right now. But what that comes down to is a difference in opinion..which is fine. I've been in that bracket before and plan to go back, so I see your point. I don't know. Lets say you raised income taxes on the top 5%, 2% per year. I don't know if that money is the same money they would be using to hire landscapers etc. In the middle class sure. Money is so tight that any that goes out for taxes pretty much means less spent. But I'm talking the top 5% here. The people that own 50% of all stock. In my mind this kind of money and these kinds of people aren't the kind that will stop hiring a gardener because their portfolios are worth 19,600,000 rather than 20,000,000. This is all IMO though.
I will say this. I believe honestly that if Mccain had won, he would have done the same thing. Yup, I said it. Why? Because I don't think people realize the potential catastrophic consequences of a systemic bank failure. Bush started TARP for this reason, I don't think Obama has much of a choice. I agree with you and everyone else that failure shouldn't be rewarded. But I really think that America wouldn't have been able to handle the consequences. Besides the CDS netting and hedging...what kind of politician would do something as unpopular as the bailouts unless they had no other choice?
Im skeptical about a systemic meltdown. I just don't understand how these banks risk management depts did not analyse this and put measures in place. Their retail business should not brought the whole house down. When u trade, do u bet the farm? LTCM had a black swan. These banks did not. There were people who saw this coming, I think they didn't make margin and decided to tighten their retail business, thus pushing the gov into a corner. I think the banks scared Congress, which forces the President's hand. McCain would have indeed done the same thing, but he is not a fiscal conservative. Not to sound like a conspiracy nut, but government should have pulled a Lincoln and taken this out of the hands of the Fed. Of course, they did compare Obama to Kennedy, which must have sent a variety of messages, not all of them good.
President John F. Kennedy, The Federal Reserve and Executive Order 11110 On June 4, 1963, a little known attempt was made to strip the Federal Reserve Bank of its power to loan money to the government at interest. On that day President John F. Kennedy signed Executive Order No. 11110 that returned to the U.S. government the power to issue currency, without going through the Federal Reserve. Mr. Kennedy's order gave the Treasury the power "to issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury." This meant that for every ounce of silver in the U.S. Treasury's vault, the government could introduce new money into circulation. In all, Kennedy brought nearly $4.3 billion in U.S. notes into circulation. The ramifications of this bill are enormous. With the stroke of a pen, Mr. Kennedy was on his way to putting the Federal Reserve Bank of New York out of business. If enough of these silver certificates were to come into circulation they would have eliminated the demand for Federal Reserve notes. This is because the silver certificates are backed by silver and the Federal Reserve notes are not backed by anything. Executive Order 11110 could have prevented the national debt from reaching its current level, because it would have given the government the ability to repay its debt without going to the Federal Reserve and being charged interest in order to create the new money. Executive Order 11110 gave the U.S. the ability to create its own money backed by silver. After Mr. Kennedy was assassinated just five months later, no more silver certificates were issued. The Final Call has learned that the Executive Order was never repealed by any U.S. President through an Executive Order and is still valid. Why then has no president utilized it? Virtually all of the nearly $6 trillion in debt has been created since 1963, and if a U.S. president had utilized Executive Order 11110 the debt would be nowhere near the current level. Perhaps the assassination of JFK was a warning to future presidents who would think to eliminate the U.S. debt by eliminating the Federal Reserve's control over the creation of money. Mr. Kennedy challenged the government of money by challenging the two most successful vehicles that have ever been used to drive up debt - war and the creation of money by a privately-owned central bank. His efforts to have all troops out of Vietnam by 1965 and Executive Order 11110 would have severely cut into the profits and control of the New York banking establishment. As America's debt reaches unbearable levels and one conflict after another emerges in Bosnia, then Afghanistan, Iraq and threatens in Iran, each of which has further increased America's debt, one is force to ask, which President will have the courage to consider utilizing Executive Order 11110 and, if so, is he willing to pay the ultimate price for doing so? Executive Order 11110 AMENDMENT OF EXECUTIVE ORDER NO. 10289 AS AMENDED, RELATING TO THE PERFORMANCE OF CERTAIN FUNCTIONS AFFECTING THE DEPARTMENT OF THE TREASURY By virtue of the authority vested in me by section 301 of title 3 of the United States Code, it is ordered as follows: Section 1. Executive Order No. 10289 of September 19, 1951, as amended, is hereby further amended- By adding at the end of paragraph 1 thereof the following subparagraph (j): (j) The authority vested in the President by paragraph (b) of section 43 of the Act of May 12,1933, as amended (31 U.S.C.821(b)), to issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury not then held for redemption of any outstanding silver certificates, to prescribe the denomination of such silver certificates, and to coin standard silver dollars and subsidiary silver currency for their redemption and -- By revoking subparagraphs (b) and (c) of paragraph 2 thereof. Sec. 2. The amendments made by this Order shall not affect any act done, or any right accruing or accrued or any suit or proceeding had or commenced in any civil or criminal cause prior to the date of this Order but all such liabilities shall continue and may be enforced as if said amendments had not been made. John F. Kennedy The White House, June 4, 1963. Of course, the fact that both JFK and Lincoln met the the same end is not mere coincidence. Another overlooked aspect of Kennedy's attempt to reform American society involves money. Kennedy apparently reasoned that by returning to the constitution, which states that only Congress shall coin and regulate money, the soaring national debt could be reduced by not paying interest to the bankers of the Federal Reserve System, who print paper money then loan it to the government at interest. He moved in this area on June 4, 1963, by signing Executive Order 11,110 which called for the issuance of $4,292,893,815 in United States Notes through the U.S. Treasury rather than the traditional Federal Reserve System. That same day, Kennedy signed a bill changing the backing of one and two dollar bills from silver to gold, adding strength to the weakened U.S. currency. Kennedy's comptroller of the currency, James J. Saxon, had been at odds with the powerful Federal Reserve Board for some time, encouraging broader investment and lending powers for banks that were not part of the Federal Reserve system. Saxon also had decided that non-Reserve banks could underwrite state and local general obligation bonds, again weakening the dominant Federal Reserve banks. A number of "Kennedy bills" were indeed issued - the author has a five dollar bill in his possession with the heading "United States Note" - but were quickly withdrawn after Kennedy's death. According to information from the Library of the Comptroller of the Currency, Executive Order 11,110 remains in effect today, although successive administrations beginning with that of President Lyndon Johnson apparently have simply ignored it and instead returned to the practice of paying interest on Federal Reserve notes. Today we continue to use Federal Reserve Notes, and the deficit is at an all-time high.
I believe the reasons such huge risks were taken is simple. They were insured. ostensibly of course. Since no one is going to read the CDS thing I wrote, I'll just paste a few paragraphs. These are all taken out of the context from which I wrote them, but i think it states my position. This is all IMO of course: Credit Default Swap. Credit just refers to a loan, default refers to someone not paying you back the said loan, and swap just refers to something changing hands, in this case swapping the risk. Imagine if you were to loan a friend $100 and he agreed to repay you $120 for giving him the loan (this is the credit part), we'll call him the poor friend. Thats $20 profit in interest. So you go through with it, but you soon start to notice your friend isn't doing well. He lost his job. You aren't certain, but you have a feeling he may not be able to pay you back (that's the default part). So you go to another friend who has lots of money and you say to them "I will give you half of my $20 profit, if you agree to pay me back my full $100 if he goes broke". We will call him your rich friend. He doesn't believe your poor friend is really that bad off. This way you are giving away some profit, but you are insured against any loss of your principal. You "swapped" the risk to somebody else. There, that's a CDS. With the advent of the CDS, bond holders could insure themselves against any losses. So why not bet on the high paying, risky bonds? Worst case is that you make nothing, if the bond holders default you get your money back and if they don't default you might as well be printing money. Basically the demand for high yield, risky debt soared because of the false sense of security CDSs provided. Do you think its a coincidence that the CDS market grew 1000% (one thousand) between 2002 and 2007? The exact SAME time the subprime lending increased (see the chart)? Of course not. The demand for subprime-backed bonds grew, which in turn means lenders on main street started doing all they could to close more subprime loans to satisfy the now subprime addicted secondary market, hence the drastic increase is subprime loans and CDSs. All of this because bond holders could now, ostensibly, eliminate their risk. That is where the subprime mess started. The big financial companies were doing something called"netting". The value, or spread, of the CDS terms would of course fluctuate and they could take advantage and ostensibly insure everything. For example. Lets say you want to buy $10 million in risky subprime bonds, you want the nice return but you dont want the risk. You come to me and we enter into a CDS for lets say 2% of the total value per year. You're off the hook, but I am on the hook for the $10 million. I don't like all this risk though and want to protect my principal investment. Next week the market improves a bit and I go to another person, call them Bob, and say I want to insure $10 million worth of the same risky subprime bond. Bob says ok, i'll do it for 1.75% of total value per year. Perfect! Now I'm making 0.25% risk free, but I didn't tell you that. I have a CDS with Bob. The market starts to head south a bit. Bob then is like "Uh oh, I'm on the hook for $10 million", looking to protect himself he goes to another person and says "I need to insure $10 million I have in this risky subprime bond", they agree because its likely they are insured VIA a CDS by someone else. I'll do it for now he has 0 risk. Do you see the problem here? When the markets are unregulated and not transparent it was impossible to see that the risk was just being transferred around so much that everyone thinks they are completely covered when actually if there is a default there is not going to be enough money to go around. Now what happens if I, you, Bob or anybody else defaults? If you default, I default, Bob defaults and so on down the line. This is exactly what the financial companies were doing when subprime loans started to default, large companies holding billions in debt began to say "Ok I'm insured, where is my money" the company that sold the CDS to them (the insurer) then went to another company and said the same thing untl eventually they get back around to the original company. So where does the money come from. Since CDSs arent regulated no one has any idea of the solvency of the company who they just bought this "insurance" from. Imagine not knowing for sure if your car insurance company has enough money to actually pay for your car if you have an accident. So basically if one company fails the rest of them default as well. Now we know why certain companies were propped up so quickly."