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The overall debt is far too high to be resolved by the government creating more debt to try and slow the fall enough to let the big boys bail out. There is no way to stop the crash but they might just slow it down a bit.
What politicians fail to understand, is that its the throwing of the kitchen sinks into the boat which is causing the sinking. Yes, lets just keep loading ourself up with debt, borrowing funds, added interest, creating special interest groups because "life isnt fair" and then expecting others to pay the bill.. Yes, that'll stop the boat from sinking.. it just has to..
They are throwing the kitchen sink at the economy but it isnt working, next stop zero interest?
If you think this through even more.. The lower the interest rate, the lower the incentive the banks have to loan their money out. Why would I loan money out at 5.5%, when I can sit on it, and take a wait and see attitude..
Raise the rate, and see banks tripping over each other to loan money out!!
What politicians fail to understand, is that its the throwing of the kitchen sinks into the boat which is causing the sinking. Yes, lets just keep loading ourself up with debt, borrowing funds, added interest, creating special interest groups because "life isnt fair" and then expecting others to pay the bill.. Yes, that'll stop the boat from sinking.. it just has to..
Politicians like Pelosi dont know what is happening so they believe the crap that Bush and Paulson throw out there. Why dont they call in some real economists who dont have an agenda, now that their rush rush bailout failed to stop the bleeding.
The overall debt is far too high to be resolved by the government creating more debt to try and slow the fall enough to let the big boys bail out. There is no way to stop the crash but they might just slow it down a bit.
Well, national debt is different than consumer debt. But yes, there is too much debt in the system and it can't be paid off. It has to be written off the books to a level people can pay. Right now, they are just kicking the can down the road.
If you think this through even more.. The lower the interest rate, the lower the incentive the banks have to loan their money out. Why would I loan money out at 5.5%, when I can sit on it, and take a wait and see attitude..
Raise the rate, and see banks tripping over each other to loan money out!!
The Federal Funds rate that they cut 1/2% is the rate of interest on money loaned between banks or between banks and the Federal Reserve. The banks set their own interest rates for consumers.
Most of the money has not even gotten to the markets yet. The first thing that has to happen with the 700 billion is to first have banks apply then to determine waht the value of the assets are.Its like reading your getting a tax cut next year and then wandering why its not in you account now.
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