RECOVERY HELD HOSTAGE BY WALL STREET AND POLITICIANS
THIS IS WHAT I WANTED AVOID. WE ARE FAST APPROACHING THIRD WORLD STATUS, FORMER WORLD LEADER. AND THE REASON IS SIMPLE, WALL STREET OWNS THE GOVERNMENT PROCESS. THE RESULT IS THAT THE ONLY RIGHTFUL STIMULUS PACKAGE THAT WOULDN’T COST THE TAXPAYERS A DIME IS BEING BLOCKED. WAKE UP, AMERICA! IT DOESN’T HAVE TO BE THIS WAY!
THE RIGHTFUL RETURN OF EQUITY TO HOMEOWNERS AMOUNTING TO TRILLIONS OF DOLLARS (WITHOUT A DIME MORE FROM TAXPAYERS) WOULD PRODUCE ALL THE STIMULUS NECESSARY TO JUMP START OUR ECONOMY FROM REVERSE GEAR TO FORWARD. IT WOULDN’T CURE EVERYTHING BUT IT WOULD ALLOW EVERYTHING TO GO RIGHT OVER TIME.
In the article below the gruesome details are shown and we all know that when it comes to bad news, the government tends to understate it and when it comes to good news, the government tends to overstate it. 4 million people have been officially added to those living below the poverty level. The total is now 44 million people, many of them children, and the government concedes this number is going to rise.
So let’s just put politics aside for a moment and focus on practicality. Just how close do the flood waters have to come to your front door before you stop caring how they got there and who else would benefit if you drained the swamp?
About 15% of our population, the highest in decades, is officially below the poverty line and the real figure is nearly twice that because of families that have had to move in together or because they couldn’t be located to be counted. In the same period of time it took us to get there, Wall Street grew from 15% of our our economy to 44%. Those kinds of result are impossible without government complicity and intentionally channeling the money from 98% of Americans to the top 2%.
It’s not that our people are stupid. The reason we have to wait for everyone to get mad enough is that everyone is trying so hard to stay afloat for themselves and their families that they don’t have luxury of reading, analysis and staying informed. Their news comes in tiny sound bites that say nothing but inflame the passions, because that is about all we have time for. But just like you don’t have to worry about crime until there is a home invasion in YOUR home, suddenly the pendulum swings the other way as we go into defensive and offensive mode to put down this takeover of the government and economy.
It’s happening. You can see it in politics as incumbents get hammered, as well they should, in new groups forming just to get heard or just to get the the existing person in office out and somebody, anybody else in. Voter anger is only part of this. Civil incidents are rising and will continue to rise until the vast majority of people start believing that the government is keeping the peace and the government is returning the piece of the American pie to its people.
What I think is the only legally, ethically and morally right thing to do is the only practical thing to do to drain the swamp before everyone ends up below the poverty line regardless of their current apparent economic condition. The economy needs the injection of trillions of dollars in individual wealth to start a REAL RECOVERY and the government doesn’t have it and can’t print it without causing even worse conditions than we now have.
Those trillions of dollars are locked up in the bondage of bogus claims by bogus intermediaries who are holding REO property from fraudulent foreclosures and who are adding to that pile of wealth every day because the judicial system is letting them. It is true that a complete change of policy that gives the middle class and poor the benefit of the bargain they thought there were getting when they accepted the “loan product” that they were sold, along with a fraudulent appraisal and fraudulent claims that the appraisal had been verified in the underwriting process that had been fraudulently claimed to have taken place.
The trick of this scheme was to make absolutely certain that the loans pools failed. That is what they did. And to make it fail-safe they put conditions in the pools that even if they were largely performing they could still be declared in default and collect money on insurance, counter-party risk obligations (credit default swaps) etc. But they knew that virtually all the loans would fail because regardless of the borrower’s ability to pay, which they sought to recruit at as a low a standard as they could find, they knew the borrower would not WANT to pay because the deal turned out to be like one of those car deals where you drive off the lot and you already lost 20%, drive another 100 miles and you lost 25% and so on.
Practically every borrower thought when they accepted these deals that they had equity in the deal. Practically none of them did actually have equity. They had a loss and it got worse with each passing month and every dollar they put into the home. That loss was Wall Street’s gain. By any legal standard that I know that gain was illicitly obtained and should be re turned to the borrowers. If the borrowers were offered a deal where they ended up with at least part of the equity they were sold, the foreclosures would end, the housing market would rebound, the consumers would have money, the economy would start recovering and Wall Street would shrink back to where it belongs — a small portion of a vibrant economy that actually makes things of value that people want and actually performs services that people want and will pay for.
Free house? Maybe, if that is what it takes put the deal right after they robbed the homeowner blind. In most cases, no it won’t take that much. And in all cases the free houses are being given to intermediaries who never invested a dime in the deal would stop. The free houses that are being greedily split up by disinterested parties who have been paid multiple times on a transaction that never should have happened in the first place would also stop. Wall Street would groan and scream and call it socialism, as though ANY system of government or economics would allow the institutionalization of theft and the socialization (payment with citizens money) of losses.
We already paid for those losses by socializing the ridiculous machinations of Wall Street. Shouldn’t we get something for our investment? Shouldn’t there be some sort of exit strategy that leaves the economy right side up? And shouldn’t there be a day of reckoning for those caused this catastrophe?
What would be so bad if that day of reckoning also was the day we put things right with homeowners?
What would be so bad if some homeowners made out a little better than the Wall Street thieves who caused this mess, especially if it produced a healthy economy?
Do we really WANT our neighbors home to go down in flames when we know it will cause fire damage to our own home, just because he was smoking in bed, drunk, passed out?
When do we get practical about this and simply say, we want the economy right-side up, we want our society free and controlled by the people and for the people and if that ends up offending some souls out there, they’ll get over it or they won’t. Who cares?
Recession Raises Poverty Rate to a 15-Year High
By ERIK ECKHOLM
The percentage of Americans struggling below the poverty line in 2009 was the highest it has been in 15 years, the Census Bureau reported Thursday, and interviews with poverty experts and aid groups said the increase appeared to be continuing this year.
With the country in its worst economic crisis since the Great Depression, four million additional Americans found themselves in poverty in 2009, with the total reaching 44 million, or one in seven residents. Millions more were surviving only because of expanded unemployment insurance and other assistance.
And the numbers could have climbed higher: One way embattled Americans have gotten by is sharing homes with siblings, parents or even nonrelatives, sometimes resulting in overused couches and frayed nerves but holding down the rise in the national poverty rate, according to the report.
The share of residents in poverty climbed to 14.3 percent in 2009, the highest level recorded since 1994. The rise was steepest for children, with one in five affected, the bureau said.
The report provides the most detailed picture yet of the impact of the recession and unemployment on incomes, especially at the bottom of the scale. It also indicated that the temporary increases in aid provided in last year’s stimulus bill eased the burdens on millions of families.
For a single adult in 2009, the poverty line was $10,830 in pretax cash income; for a family of four, $22,050.
Given the depth of the recession, some economists had expected an even larger jump in the poor.
Dr. Smeeding said that in a typical case, a struggling family, like a mother and children who would be in poverty on their own, stays with more prosperous parents or other relatives.
The Census study found an 11.6 percent increase in the number of such multifamily households over the last two years. Included in that number was James Davis, 22, of Chicago, who lost his job as a package handler for Fed Ex in February 2009. As he ran out of money, he and his 2-year-old daughter moved in with his mother about a year ago, avoiding destitution while he searched for work.
“I couldn’t afford rent,” he said.
Danise Sanders, 31, and her three children have been sleeping in the living room of her mother and sister’s one-bedroom apartment in San Pablo, Calif., for the last month, with no end in sight. They doubled up after the bank foreclosed on her landlord, forcing her to move.
“It’s getting harder,” said Ms. Sanders, who makes a low income as a mail clerk. “We’re all pitching in for rent and bills.”
There are strong signs that the high poverty numbers have continued into 2010 and are probably still rising, some experts said, as the recovery sputters and unemployment remains near 10 percent.
“Historically, it takes time for poverty to recover after unemployment starts to go down,” said LaDonna Pavetti, a welfare expert at the Center on Budget and Policy Priorities, a liberal-leaning research group in Washington.
Dr. Smeeding said it seemed almost certain that poverty would further rise this year. He noted that the increase in unemployment and poverty had been concentrated among young adults without college educations and their children, and that these people remained at the end of the line in their search for work.
One indirect sign of continuing hardship is the rise in food stamp recipients, who now include nearly one in seven adults and an even greater share of the nation’s children. While other factors as well as declining incomes have driven the rise, by mid-2010 the number of recipients had reached 41.3 million, compared with 39 million at the beginning of the year.
Food banks, too, report swelling demand.
“We’re seeing more younger people coming in that not only don’t have any food, but nowhere to stay,” said Marla Goodwin, director of Jeremiah’s Food Pantry in East St. Louis, Ill. The pantry was open one day a month when it opened in 2008 but expanded this year to five days a month.
And Texas food banks said they distributed 14 percent more food in the second quarter of 2010 than in the same period last year.
The Census report showed increases in poverty for whites, blacks and Hispanic Americans, with historic disparities continuing. The poverty rate for non-Hispanic whites was 9.4 percent, for blacks 25.8 percent and for Hispanics 25.3 percent. The rate for Asians was unchanged at 12.5 percent.
The median income of all households stayed roughly the same from 2008 to 2009. It had fallen sharply the year before, as the recession gained steam and remains well below the levels of the late 1990s — a sign of the stagnating prospects for the middle class.
The decline in incomes in 2008 had been greater than expected, and when the two recession years are considered together, the decline since 2007 was 4.2 percent, said Lawrence Katz, an economist at Harvard. Gains achieved earlier in the decade were wiped out, and median family incomes in 2009 were 5 percent lower than in 1999.
“This is the first time in memory that an entire decade has produced essentially no economic growth for the typical American household,” Mr. Katz said.
The number of United States residents without health insurance climbed to 51 million in 2009, from 46 million in 2008, the Census said. Their ranks are expected to shrink in coming years as the health care overhaul adopted by Congress in March begins to take effect.
Government benefits like food stamps and tax credits, which can provide hundreds or even thousands of dollars in extra income, are not included in calculating whether a family’s income falls above or below the poverty line.
But rises in the cost of housing, medical care or energy and the large regional differences in the cost of living are not taken into account either.
If food-stamp benefits and low-income tax credits were included as income, close to 8 million of those labeled as poor in the report would instead be just above the poverty line, the Census report estimated. At the same time, a person who starts a job and receives the earned income tax credit could have new work-related expenses like transportation and child care. Unemployment benefits, which are considered cash income and included in the calculations, helped keep 3 million families above the line last year, the report said, with temporary extensions and higher payments helping all the more.
The poverty line is a flawed measure, experts agree, but it remains the best consistent long-term gauge of need available, and its ups and downs reflect genuine trends.
The federal government will issue an alternate calculation next year that will include important noncash and after-tax income and also account for regional differences in the cost of living.
But it will continue to calculate the rate in the old way as well, in part because eligibility for many programs, from Medicaid to free school lunches, is linked to the longstanding poverty line.
Reporting was contributed by Rebecca Cathcart in Los Angeles, Emma Graves Fitzsimmons in Chicago, Malcolm Gay in St. Louis, Robert Gebeloff in New York and Malia Wollan in San Francisco.