Bailing out Wall Street without fixing Main Street is like fixing the cracks in the wall while your foundation is crumbling. The measures listed above, as well as more basic changes, are necessary. But with more than 100,000 families losing their homes each month, I would like to focus on one critical part of the foundation — stopping foreclosures and keeping families in their homes.
The root of the crisis is that working families have been squeezed from all sides, especially since the recession of 2001. Household income has been falling behind the increasing cost of necessities. The squeeze has been aggravated by the decline of medical coverage and retirement plans, shifting these costs, along with soaring costs for education, food and energy, onto over-strained family budgets.
Many have dealt with this strain by going into debt. They were pushed deeper by the mortgage brokers, real estate agents, appraisers, and credit card vendors, who piled on fees, charges, and hidden interest rates, often based on wildly inflated housing prices. Even when this debt was not the result of outright fraud and conspiracy by the financial and real estate industries, it was in violation of any reasonable banking standards. Financial institutions, staffed by MBAs, PhDs and other highly-trained experts, made loans that no first-year economics student should have approved.
The immediate cause of the financial crisis on Wall Street is this mountain of debt smothering people on Main Street. In simplified form, here is what happens.
● Hard-pressed families fall behind on their mortgage and credit card payments.
● When homeowners can’t make payments, the banks foreclose, but the home frequently stands empty and the bank is unable to recover much of the outstanding loan..
● The bank, with less money coming in, has trouble paying other banks and investors that it borrowed money from.
● Those other banks and investors have trouble paying banks and investors they borrowed from.
● Banks, investors, and ordinary businesses are afraid to lend money to other banks, investors and ordinary businesses.
Families owe more on their mortgages and their credit cards than they can ever pay back. And their effort to save their homes and meet creditors’ demands is undermining their families, their neighborhoods and the local economy, as family members work multiple jobs and cut back on health care, local purchases, local taxes, utilities, and home maintenance.
The bailout package just approved by Congress doesn’t address this problem at all. Homeowners and consumers still have the same debt, still face the same monthly payments. The only change is that the U.S. government has become a collection agent for the banks and investors.
THE SECOND AMERICAN REVOLUTION IS ON THE HORIZON
The words “No Taxation without Representation” began as a slogan in the period 1763-1776 just before the first American Revolution. The slogan summarized the primary grievance of the American colonists in the Thirteen Colonies who believed the lack of representation in the British Parliament was an illegal denial of their rights as English citizens. The colonists believed that the laws excessively taxing them for services they did not receive were illegal.
It has become apparent to most Americans that both houses of our Congress, just like the British Parliament of the 1760’s and 1770’s, no longer represents the interests of the American people. Our congress routinely passes legislation that benefits a wide variety of special interest groups at the expense of the average American citizen and taxpayer. Through the use of special interest bribes (I mean campaign contributions), it can now be said that America has the best congress that money can buy.
American taxpayers are seeing their taxes go up at every level of government, oftentimes for services and programs that they do not benefit from, nor approve of. Our local and school taxes are rising at a rate far exceeding any increases in our incomes. The U.S. congress and the Federal Reserve are printing fiat money (backed by nothing) as fast as the printing presses can print it and the American taxpayers are starting to get angry about the increasing burden of taxation placed upon them and they have every right to be angry.
The American taxpayers who live up to their responsibilities and who work hard (often holding two jobs) to pay their bills with less take-home money are:
1. paying for ongoing failed social engineering experiments in housing and education,
2. paying for the funding of anti-American, socialist organizations like LaRaza and ACORN,
3. paying for a variety of services provided to 15 million +/- illegal aliens,
4. paying for the bailout of large international banks,
5. paying for the bailout of Wall Street firms,
6. paying for the bailout of real estate investors and
7. paying for the bailout of people who are unable or unwilling to be responsible adults and who fail to pay their own bills, including their mortgages.
Many American citizens, particularly those who pay taxes, are frustrated by a government that no longer represents them, but rather represents the interests of an oligarchy of about one thousand political and financial elites who exert unconstitutional and illegal control over our government and economy for their personal gain.
The members of this oligarchy are not loyal Americans who have the best interests of the county in mind, but rather they are people who benefit financially or politically by keeping our country in a constant state of war, by dumbing down our education system, by devaluating our currency, by separating us into categories by race and ethnic origin, by drugging 6 million of children with mind altering drugs, by flooding our country with illegal aliens, and by chipping away at our nation’s sovereignty, freedoms and liberties.
I believe that Americans are fast approaching a point of frustration and anger with their own government similar to what the American colonists reached in 1776. They want to take their country and government back from the corrupt political and financial elites who control it. Let’s hope that the second American Revolution that we see on the horizon, is accomplished via the ballot box.
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John Wallace
New York Campaign for Liberty
Chatham, New York
http://www.NYCampaignForLiberty.com
Hello John welcome to the neighborhood. I will agree with you for the most part, but I start pulling away from any organization that tries to use a fear of socialism. Call it what you may, I believe that the government should put the American people first and then if there is anything left over let the rest of the world in for a piece of the pie.