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STRATFOR To The Rescue

STRATFOR to the rescue.  For those who find this a tad confusing, STRATFOR explains it in a nutshell.  I don’t want to belabor what STRATFOR explains below except that the US rescue plan was exactly what we needed to do.  The balance sheet of our banks needed to be cleared of these poor mortgages they were forced to make thanks to politically/racially motivated government intervention that directed/forced companies to make these awful mortgage loans.  By forcing politics into the financial sector, mortgages were approved to those who could not afford them (and they tended to be minorities) with little or no down payment and, not surprisingly, the lenders defaulted, sending a ripple effect throughout the financial sector.

The government, who caused the problem, put through a rescue plan.  It is the first step in a series of steps the government must take to arrest the problem.  Capitalism and deregulating did not cause this, government intervention did.  Right now, as STRATFOR explains, what we have is a race against time for the Treasury has to “ramp up” and buy these bad mortgages in time to provide liquidity to the banks so they can resume normal business operations.

In the meantime, there are things congress can do to help outside of this rescue plan.  Unfortunately, since this congress is led by Socialists, it is doubtful any of these can happen.  Certainly, no one on Washington is even discussing how to help the economy.  In any event, here goes:

Cut spending, immediately.  Tax receipts are already in trouble due to lost jobs.  Congress, like all of us, must tighten our purse strings and allow the private sector to keep more of the money it earns.  If congress continues to spend like drunken sailors, Debt-to-GDP ratio will close to 90% or higher

Eliminate taxes on all small businesses and corporations.  We need pro-growth, pro-GDP fiscal legislation right this instant.  Eliminating taxes will reduce cost of goods sold and allow small businesses and corporations to weather this storm

Make the Bush tax cuts permanent.  It’s a simple vote.  Right now, investors are skittish to invest in the US because a MASSIVE tax increase is coming within 2 years.  Making the Bush tax cuts permanent will alleviate the fears these investors may have.  Given that the entire world is facing a credit/financial problem, it makes sense to provide a business-investor friendly approach.  Worldwide investors prefer to invest in countries that are stable, have sound infrastructures, solid supply-chain-logistics concepts, and are low coast.  The US is a preferred location, but not with the coming tax issues.  An Obama presidency would be disastrous for FDI into our nation.

Pass, right now, all free trade agreements languishing in Congress.  Our exports need new markets now to help sales.  The best thing for our manufacturing now is exports and free trade agreements are a significant avenue for our exports (w e have a trade surplus with 100% of the countries we have a free trade agreement with)

Repeal Jimmy Carter’s “Community Reinvestment Act” and Clinton’s Nationwide Homeowners Strategy that ordered the government to force poor mortgages down the throats of financial institutions and banks.  These programs forever destroyed Wall Street’s big financial houses, and so we cannot allow them to destroy our banks

Immediately repeal and end any attempts to thwart our ability to produce the energy we have.  ANWR, the continental shelf, the Gulf of Mexico, the Rocky Mountains, the Bakke fields, and nuclear power must be opened up as never before.  This all started due to the price increases to energy.  We can end this problem by increasing supplies and insulating our country from overseas energy exporters

Long term suggestions include the implementation of a flat tax system, elimination of all subsidies, and an elimination of any and all barriers to trade, bar none.  We need to return to the free market, government interference has been far more harmful than good, as is plain to see.  The crisis we are undergoing is a manufactured one, and  thus can be disassembled with ease, common-sense accounting, and fortitude.  Unfortunately, it begins with Congress, which is now a Marxist institution.  Until such time as Americans realize that the problems we are facing is due to the Democrat Party of the United States, we are in for a continued world of hurt

The Financial Crisis in the US.

US Air Force MSgt (Ret)

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