More thoughts on this financial disaster.

Anyone who has read The American Theocracy, knew this was coming. Oh let's get real folks, anybody who has read anything about history, knew this was coming. You can't sustain yourself as a debter nation, and you cannot feel secure in any way when your nation has sold off those debts, in huge chunks, to foreign entities who can sell them off at any point.

How did we get here?

In October of 2000, under Bill Clinton, the unemployment rate was 3.9%

In October of 2008, under George W. Bush, we are at 6.1% unemployment on our latest jobs report.

The average worker (adjusted for inflation) has seen their wages drop by 2% over the Bush term.

The average cost for gas at the pump has gone from $1.49/gallon to over $4.00/gallon this summer.

Workers were paying on average $1400 more, out-of-pocket, to cover a family under their employer insurance policy last year as compared to 2000.

The cost of a gallon of milk in 2000 $2.99
The cost of a gallon of milk, I'm lucky to find the non-organic kind for $3.89/gallon today.

The Federal budget went from a $237 billion surplus in 2000
to an estimated $482 billion deficit expected for 2009!

In case your bad at math, that's a $719billion turnaround in 8 years.

Oh yeah, and then there is the fact that all of these banks and lending institutions are worthless on paper. So what do we do about it?

For some reason, The Bushies have told us they have to step in because if they don't - what will happen? Another Great Depression. Bread lines. CEOs without yachts and retired folks left with no pensions! All of this may be true.

I have a suggestion on how to easily fix this problem, but I'll save that for the end. First, I'm gonna fully define how I think we got here. The problem exists because these lending institutions gave out risky loans that any economist worth his weight in gold (and gold is very valuable right now) would have said was just plain stupid.

As a little side story, a few years back when my husband had been laid off just after we bought a new house, and things weren't so good in the Sadie family (financially speaking), we went to our bank to ask them to give us a fixed rate loan in place of our adjustable loan. They actually told us that they would love to put every penny of debt that we had (including student loans) in to a flex rate loan for more money than we wanted or needed, because the value of our house had skyrocketed since we bought it. I told the bastards to pound sand. We only wanted to refinance the one loan, clearly we could pay it back, and if they thought we were so damn risky (because we were both self-employed at the time) then why would it make more sense to give us an adjustable rate loan? We pulled our money out of that bank and went to Bank of America where they were happy to give people like us with good credit, huge amounts of equity, and the obvious ability to pay our bills, the loan we wanted at a fixed rate.

So Republicans say, "Everyone should have known better!" How? You don't require a basic level of understanding of economics and loans, much less the detailed ins and outs of finances, in public schools. Isn't it the job of the MBA's who all run these financial institutions, to set up economic policies that are good business practices? Isn't it the job of the Federal Government to regulate industries who's financial stability greatly affects the security of us all? Well, of course it is - but Republicans and some DLC Democrats, hate regulation.

All of that aside here we are today being told that if you bought a house you couldn't afford (and I agree you are an idiot for doing so, but just as we trust our doctors to not tell us smoking is healthy, we expect our financial gurus to not throw loans at us that we really can't afford to pay back), you lose. You lose your house. You will be saddled with bankruptcy and unable to have an easy time switching jobs or renting a house, or even having transportation, for many years to come. If you had your retirement in pensions that are now greatly shrunken, too fucking bad. But if you were one of these MBA's, take a deep breath and relax. The rest of us schmucks will bail you out at the cost of $3,600/person. Why is it criminal for doctors to tell us to smoke and perfectly acceptable for experts in the financial industry to tell us to buy a house we can only afford on paper and in theory?

Anyway, fast forward to where we are today. All of these people suddenly can't afford to pay for their homes. The government has tried to step in and help those whom they can help. It wasn't enough - the abuse within the financial industry was too great. Now those institutions are left holding mortgages that are worthless. Nobody will buy them. The houses themselves aren't able to be sold. Everybody is kind of fucked. Or are they? Here's an idea. If your institution sucked this bad go under. That's right go under! The Government can then *sell* those mortgages to the people who are living in the house, for $3,600 (in place of asking me to acquire that much debt).

Everyone will then outright own their house once they pay that fee. The financial institution will go under. Yet suddenly you'll have a ton of folks who work damn hard with huge amounts of disposable incomes. They'll actually spend it on useful things. And this economy will be roaring again in no time. Those financial institutions that screwed up will go under. Those that didn't won't. You'll have a natural redistribution of wealth in this country that frankly is well deserved.