Part Two:
The quotes show that the White House had seen the mortage crisis
coming. Had taken some action on it. But I think that they underestimated it. They were talking millions, and needed to be talking billions.
Also some of what the White House was proposing needed legislation.
I am not sure if they got it. If not, assuming that they asked for.....the
congress has a share of blame here.
Moving on.
Why can GWB and McCain say that the economy is healthy? Well they had economic growth....6 straight years....averaging 2.8%. Growth
in the eocnomy is healthy. Negative is sick.
GNP is one of the critical number of your country. If it is shrinking, you got problems.
Let us consider the bailout. The effect of a $700b bailout on a $1400b
GNP has never been studied. It is 50% of the GNP. To put it another way.....you make $50K per year. And get hit with a court ruling on civil case...the Judge order you to pay $25K this next year in a lump sum to the plantiff. You just had a very bad year.
The bailout is nothing but negative numbers for the budget and economy, untill the mortages that the gov't is buying starts to be resold. There the housing bubble burst, has reduced the prices of house by 50%. How do they get the $700b when thier market for houses is down?
That is why I am support loans, creditlines, insurance programs. The more from the private sector that better.
They just announced the Senate is voting on a $832b bailout. That add ons and pork has been added. So my numbers are off. But......to me....$700b or $832b it is too big for the economy and its GNP.
This thing is beginning to effect credit. My initial concern of this. When the plastic starts to go bad.....this will effect consumer confidence big time. Auto dealers are closing because of lack of credit.
I don't have any good suggestions for you on credit. If you are tapped out and high balances right now.....don't expect the banks to extend you more. Pay as much in cash as you can. Watch the terms of creditline, cards, and other credit carefully. If the banks have any kind of term on your credit lines to adjust the rates...they will do so now.
This not over with. Hang on. Be good and safe. Enjoy life......just with less for a time.
My sources for this:
GNP United States
http://www.data360.org/graph.aspx?Graph_Group_Id-150Budget of the DoD
Http://whitehouse.gov/omb/fy2009/defense.htmlOverview of the President's 2009 Budget
http://www.whitehouse.gov.omb/budget/fy2009/overview.htmlMid year 2009 Budget Summary