United States Heading towards a Depression?

@DuDu... it's not a contradiction, it's an evasion.

Assuming the percentages are correct for Greece, legally the wealthiest 10% of the population is expected to pay for 90% of the salaries for 80% of the population. So, when that upper 10% of the population resents the tax burden placed upon them, and finds it cheaper and easier to bribe the government to pay little or no taxes, you get Greece's economic meltdown.

Take a look at this report from the BBC from February:
http://news.bbc.co.uk/2/hi/programmes/from_our_own_correspondent/8509244.stm

Two years ago, I worked with a guy that wanted to sell property in Greece to wealthy Americans. He spent seven months in Greece. Everyone, EVERYONE in the government was corrupt. Everyone wanted a bribe. Everyone. He told me that at one point he was visited by the Hellenic Police who wanted an envelope stuffed with American dollars or they would throw my friend in jail on invented charges. He told me he had to give the guy $5,000.

Here's the deal - tell if this is familiar:

1. Greek politicians started promising huge benefits to the middle-class in return for votes.
2. Once in office, to stay in office the politicians had to give bigger and bigger handouts. This included two months paid vacation, and employing citizens by ballooning the size of the government
3. Government employees are given more and more lavish handouts to get their votes. For example, each year they are paid for 14 months.
4. To pay for these handouts, Greek politicians constantly increase taxes on the wealthy ("tax them fairly")
5. The wealthy, who work for a living, resented the unfair tax burden and so a few years ago a thriving underground economy sprang up. It's so huge that the wealthy now pay almost no taxes - it's a lot cheaper to simply bribe the tax investigators, who become wealthy in their own right.
6. As a result the Greek economy became tax-starved, it was revealed that the Greek government has been lying to the EU all along and the debt is really something like 115% of GDP
7. This is, of course, insane

With no money in the economy, the Greek economy has just completely collapsed.

If you read the European news, they will tell you that the reason why the Greek middle-class are rioting is because they are being forced to pay the penalty and suffer because the measures being enacted by the Greek government do not require Greek's wealthiest 10% to pay the taxes they evaded.

This is a completely incompetent corrupt Greek government and no one can see how it can be fixed, ever. People are going hungry and there is real danger of violent revolution, which is probably inevitable when people have no food.

I say, dissolve the country.

 

Wow so many experts in one thread! Now we know where the federal reserve should do its recruiting from...lol

 

Definitely familiar, but the bribes seem to be what enabled it. I don't see US IRS agents ever getting away with taking bribes. At least not on a level that most rich Americans avoid paying anything. Uncle Sam will always find a way to get his money from whoever the target is.

 

I completely agree!

 

Well, there are no wealthy people in Greece. That's the whole problem. The source of that problem is a HUGE, VAT, inflation, high taxes, and the fact that 1 in 5 people in Greece works for the government. The result? No wealth producers.

Guys, this is what happens when you tax wealth to the extreme. This is what happens when the majority of the population that works, works for the government, not as producers of wealth.

A system like this can NEVER perpetuate or produce any form of wealth. All it does is sucks any wealth out of the system, transfers and dilutes it such that NO ONE is willing to produce any longer.

Dubs, the harsh reality here is that taxing wealth to the point that you kill off wealth means no more wealth to tax. How hard is that to understand?

There's only so much you can take before the taken are bust, and become takers themselves.

Reading a great many of your posts and others here like you I've come to one conclusion. You're too young to have experienced the reality that is life, else you'd not make goofy statements like this.

 

Correct. There are no wealthy people in Greece - technically and legally.

The people in Greece that are living large and APPEAR to be wealthy have all their euros in banks in other countries. Like Mia wrote, Greek taxes sucked the money out of the system.

There are no producers of wealth in Greece.

BTW, just to show how incompetent the Greek government is, they lied to the EU about the enormity of their debt and expected it all to just go away.

 

That just shows you how delusional and incompetent all of Europe is (save for the UK) when they make up a new currency (monopoly money) out of thin air, and then over value it against the dollar in an effort to shore up an already devalued economic system. One made up of a culmination of countries whose currency was worth zip to begin with. What a joke.

 

The strength of the USA relative to Europe has been its centrally oriented commerce that the conservatives rail against and then use the dysfunctional, decentralized European model to illustrate the failings associated with such a system that is their very own philosophy....just a little more time and surly the midterms will put the conservatives so deep in the hole we'll forget they ever existed, can't wait for November.

 

That's why Great Britain refused to adopt the Euro. The U.K. didn't need the euro, they knew that Europe needed the U.K.'s economy to prop up that currency! The Old Empire still has her smarts, eh what?

 

Fannie Mae seeks $8.4B in aid after 1Q loss

The Obama administration pledged to cover unlimited losses through 2012 for Fannie and Freddie.

http://finance.yahoo.com/news/Fannie-Mae-seeks-84B-in-aid-apf-687711093.html?x=0

Socialism doesn't work. I thought we learned that lesson after the Soviet Union collapsed. At the time, the Russians couldn't feed themselves. Now they are a leading exporter of wheat.

The Federal Reserve is part of the Greek bailout having provided $30 billion and US taxpayers are providing money through the International Monetary Fund.

 

Which is why I mentioned the UK Their currency and economy was fine, without devaluing it.

No, it certainly does not. And Greece, as well as the rest of Europe is having a very difficult time facing up to that harsh reality.

As for Fannie and Freddie? Well, like I've said all along, the main cause of the sub prime melt down and housing bust. In this order. FDR ---> Fannie Mae ---> Johnson ---> Great Society ---> Freddie Mac ---> Carter ---> CRA ---> Clinton ---> CRA expanded ---> Obama ---> WE'RE FUCKED!!!

 

The market took a good breather today - up 404 pts. - 10,785.14 on the Dow. Undoubtedly a new test will be in short order but the doomsdayers will need wait another day or two.....or in fact the correction may already be over.

Europe has never functioned well as a unit and better for the US it stays that way - and better the reactionaries in this country be held accountable for their past performance than blame others for their failings.

 

It's pretty evident by your statements that my previous comments stand.

 

The drumbeat of economic recovery continues to role - Market up 50 pts. noon - The Summer events are just now unfolding and will be to the advantage of the Democrats if properly managed.

 

This is your brain on crack.

Wow, dow is up 50 points... Great economic indicator for recovery. Still down a 1000 from a week ago.

 

Europe has never functioned well as a unit and better for the US it stays that way - and better the reactionaries in this country be held accountable for their past performance than blame others for their failings.[/QUOTE]

There's a disconnect between Wall Street and Main Street. Don't fool yourself. Jimmy Carter and the Democratically controlled Congress created a bubble in the late 1970s by increasing the money supply to 112%. It actually worked for a couple of years and unemployment dropped to as low as 5.6% during the 1978-1979 period. (see http://research.stlouisfed.org/fred2/data/UNRATE.txt)

The writing was on the wall in 1979 when the price of Gold hit $1,000. Gold for June 2010 delivery jumped $19.50 to settle at $1,220.30 an ounce

The end of the story was the double dip recession of 1980 and 1981-82. So in any case, the crisis is not over. Barry Obama has increased the money supply 120%. The resulting inflation will be far worse.

The US is worse shape than Europe. Who is going to bail us out?

The reason for the decline is the welfare state. Rather than learning that welfare doesn't work. Obama is trying to copy European style socialism. There are now 29 million municpal and state workers whuch surpases the manufacturing sector. Further, 20% of males aged 18 to 54 do not work.

The housing crisis is not over. Home prices may fall an additional 25%.

Fannie posted an $11.5 billion loss for the January-to-March period and Freddie lost $6.7 billion.

Around 5.5% of Fannie’s loans are 90 days or more past due, and the same is true for around 4.1% of Freddie’s loan book.

Foreclosures will increase, and more inventory will hit the market. Already, Fannie said that at the end of March it had 110,000 homes in its possession to sell, up from 62,000 one year ago.

The Federal Housing Administration, which currently allows down payments as low as 3.5%

http://blogs.wsj.com/developments/2...signals-on-the-state-of-housing/?mod=yahoo_hs

 

Wild up and down days like we've seen on Wall Street over the last few days are much more indicative of a bear market than a bull market. Trying to make something of a one day 50 point swing is as idiotic as looking at a single day's political polling numbers(unless that day is election day).

Bogart has it spot on. We added jobs to the economy last quarter and some of the millions of forgotten unemployed in this country reappeared to look for work, bringing the unemployment rate up .2%, not down. The $8000 federal subsidy for home purchases expired at the end of April. It should be interesting to see what the real estate market looks like when people aren't being paid to buy. Many analysts, including the President's don't expect any significant improvement in the numbers over the next year. The rest, also a large number, expect things to get quite a bit worse. It will be interesting to see if the Republicans can filibuster every new spending bill put out by congress until Obama is out of office, or at least until Nov. elections. By all accounts, that is what the majority of Americans, including independents and some liberals want them to do. It will be even more interesting to see if the newly elected can slash government jobs and terminate government union contracts once they are elected. Lets hope its not too late by then.

 

It is probably fair to say, everyone is waiting for a spike in Inflation - just what it is waiting for is anyones guess but everyone and their uncle will be gunning for it when it shows up. The economy may be strong enough for rates to creep up if necessary.

The market lost 30 pts. - Dow 10,748. Needs a little more time to play out as far as direction.

 

Holy crap!

 

Lets not forget about those Americans that are no longer on unemployment and have just GIVEN UP looking for work. Real Unemployment is closer to 18% or more.

What you really need to do is stop posting for a few months, sit back, and listen. You're making a fool out of yourself every time you post this garbage.

Look at Greece. 1 in 5 work for the government. Remember "WE THE PEOPLE". We, you and me, are paying for this in America. Number one recession proof industry in the US? GOVERNMENT.

If anyone should be laying off, its the FED. Creating government jobs does not produce wealth, it redistributes and eventually (sooner rather than later) completely dilutes it.