TonyCinTX

The U.S. on the Precipice

huangjin: Programs such as Social Security and Medicare do exactly the opposite of what you claim, they force people TO "save". Yes, I know they are not actually saving and their contributions are redistributed to the elderly. But historically, the problem was that *nobody* saved for retirement. If they did anything, they relied on lifelong employers to fund their retirement, and when those all went under in the Depression everybody was screwed.

We have already tried the alternative to SS, it fails miserably and creates poverty, disease, homelessness and crime. When it comes to planning for retirement, people are no smarter now than they were a century ago. They won't do it! They ignore their financial future and bet on schemes and wild chances and lose all their money! If you completely eliminate their taxes they will bet and lose that, too.

Politicians and corporations are just as bad as individuals, short term thinking is inherent human nature. There is absolutely no evidence that people are "discouraged" from saving by SS, in fact among people under 35 that firmly believe SS will be gone before they retire and they will have to fund their own retirement, they still do not save or invest anywhere close to what that would cost. Education is not the answer either, this same thing holds true for professors and college graduates. THEY JUST DON'T CARE ENOUGH to sacrifice this year's comfort for their future comfort, and NEVER WILL.

Some sort of mandatory, inescapable long term investment combined with a social safety net is the answer, and SS and Medicare taxes are the closest we can come. The big problem with SS and Medicare is they are managed by appointees and politicians that never have to face any consequences for their own short term thinking. But something must be done and this is as close as we get.

The Fannie/Freddie Heist

I'm on the author's side. Capitalism encourages the whole spectrum of risky trades; some pay off and some lose. But the risk must be real! If you can count on the government to force taxpayers to foot the bill for the losses, why judge risk at all? This is what happened at FM&FM and throughout big corporate America. The result is not a free market at all, it is just free money for the penthouse suite of offices. The CEO's of FM&FM will get their parachutes funded at taxpayer expense.

As for whether the numbers appear on the balance sheets, who cares? Does anybody think the problem will be corrected for nothing? No. It is going to cost tens of billions at minimum, and that money is going to come from the only player with pockets so deep they have zero regard for profit and no concern for losses: The US Government. As long as they protect their cronies and retain power, and project the *image* of caring for the middle class while raiding our wallets they are golden.

We should have let nature take its course and let them collapse. Actually we never should have deregulated them in the first place! That is water over the dam, but the dam should be repaired and the Enron loophole closed.

And Jimbo, if you think you don't gamble, you should take a clear-eyed look at the current market, because with the current state of deregulation and law enforcement by the SEC and government in general, the US market is worse than any casino. At least in a casino they aren't allowed to tell blatant lies to you, cook the books, steal your money under false pretenses and then walk away with impunity. At least in a casino they play by the frikkin' RULES, the dealer can't help his buddy by arbitrarily declaring a pair of threes a full house, or a busted flush "close enough".

To me, these bailouts are proof of lies. If the bailout was a good idea, let Warren Buffett or Bill Gates or Steve Jobs do it, or any of the other thousands of billionaires. They don't step up because they aren't stupid, the bailouts are going to produce staggering losses that the government will never recover, it will just sweep them under the rug and declare they saved America while destroying it.

We should let these things fail, institute regulations to prevent similar irresponsible greed from happening again, and use taxpayer money to aid those driven into poverty and homelessness as a result. Financially speaking, the stupid, the irresponsible, the criminals liars and frauds must lose everything. Bailouts don't just fail to punish them, they reward them! That positive feedback creates ever more of the same, and will destroy the market altogether.

Global Stock Markets: We All Fall Down!

Thanks, that's a lot of useful information. So when can we start saying "recession"?