Tag: Economic Crisis

Do The Right Thing–Abolish The Debt Ceiling

Recently all sides came to some sort of agreement on the debt ceiling….which calmed the markets and makes the chance for another political drama to return in the next couple of years.

Just in case you have a short memory…..

The Fiscal Responsibility Act of 2023, the debt ceiling deal President Biden signed into law recently, served its primary purpose: avoiding default on our nation’s debt, which would have plunged the economy into chaos.

President Biden also skillfully repelled the worst of the House Republicans’ demands, which included slashing social programs and government services by 60 percent. That would have utterly devastated everything from Head Start and Pell Grants to job training, housing and nutrition assistance, and even air traffic safety.

So talking points from the White House paint the bipartisan deal as a victory for ordinary people. But that isn’t the whole story.

The bill will still cut or freeze many programs that were already underfunded by the last debt ceiling drama in 2011 — even as it increases military spending by a whopping $28 billion, bringing the Pentagon to a shocking 56 percent share of the budget Congress sets each year.

The deal also prevents President Biden from pausing student loan payments and imposes harsh “work requirements” for some recipients of the Supplemental Nutrition Assistance Program (SNAP aka food stamps) and the Temporary Assistance to Needy Families (TANF) program.

Work requirements don’t encourage work — they just make it more difficult for even eligible families to get help.

In a final blow, the deal cuts corners on environmental review for energy projects — and specifically greenlights a pet project of Senator Joe Manchin (D-WV) for a highly destructive fossil fuel pipeline for his state. Authorization of this pipeline had failed every other legislative attempt.

https://www.commondreams.org/opinion/abolish-the-debt-ceiling-2661138342

Is all this drama really necessary?

In the future, Congress should abolish the debt ceiling. It doesn’t limit debt — it just creates one hostage situation after another when the GOP refuses to pay the country’s bills.

If Congress won’t act, the president should intervene with his considerable executive power and invoke Section 4 of the 14th amendment, which says that the validity of the public debt of the United States “shall not be questioned.” He could even mint enough money to ensure there would be no default and no harm to families.

Democratic lawmakers and President Biden didn’t take any of these steps, instead opting to negotiate with their hostage takers. Next time, they shouldn’t make the same mistake.

This is all a moot point for the debt ceiling is no longer a useful tool so it will go to the back burner until the GOP needs it in 2 years.

None of this stupidity is necessary!

I Read, I Write, You Know

“lego ergo scribo”

The GOP Debt Plan

After a couple of weeks of no progress on the debt ceiling thing the GOP has come up with a plan (they always have a plan that does little to solve the problem…..as usual it will involve benefits for business and of course the inevitable tax cuts.

Here is a look at this ‘plan’…..

With the U.S. careening toward a default crisis that they manufactured, House Republicans are reportedly crafting a major tax cut package that would overwhelmingly benefit the rich and corporations while blowing a multitrillion-dollar hole in the federal deficit.

The fresh push for tax cuts, according to Rep. Ilhan Omar (D-Minn.), further shows that “this hostage crisis has never been about deficits for the GOP.”

“It has always been about wealth transfer—taking away food and healthcare from the poor and middle class to give away $3 trillion more in tax cuts to their rich friends,” Omar, the deputy chair of the Congressional Progressive Caucus, tweeted Tuesday.

Politicoreported earlier this week that Republicans on the House Ways and Means Committee hope to finish work on their emerging tax legislation by June 16, just over two weeks after the so-called “X-date”—the day on which the Treasury Department expects the federal government to run out of money to cover its obligations unless Congress raises the debt limit or President Joe Biden acts unilaterally.

“Key parts of the [tax cut] package… will likely include a full restoration of research and development deductions, full bonus depreciation, removing caps on business interest expensing, and a doubling of the $1.08 million limitation on the section 179 deduction (which, like bonus depreciation, allows a company to deduct an asset’s cost up-front),” Politico noted.

The Congressional Budget Office (CBO) estimated last week that extending the individual provisions of the 2017 tax cuts—which are currently set to expire in 2025—would add $2.5 trillion to the deficit over the next decade. The original law made the cut to the corporate tax rate from 35% to 21% permanent.

https://www.commondreams.org/news/gop-tax-cuts-debt-limit

Let me ask you….if you have a debt problem would cutting your income help solve your problem?

GOP wants to cut the revenue that the country gets….but they want to keep spending on stupidity like wars…..I cannot see our debt ceiling problem being solved by these plans from the Right.

They keep doing this horrible plan so that they can attack social safety nets while giving a helping hand to those that need no help.

But these plans do keep the dollars rolling into their coffers….and that is what it is all about.

Pay attention!

I Read, I Write, You Know

“lego ergo scribo”

Another One Bites The Dust

For the past week or so there has been the failure of a couple of banks…..something not happening since 2008 and Lehman Bros. Well a 3rd bank has failed.

The government has taken what the AP calls “extraordinary steps” to avert a potential banking crisis in the wake of Silicon Valley Bank’s failure, with the Treasury Department, Federal Reserve, and FDIC issuing a joint statement Sunday assuring SVB clients they would all be protected and that depositors, starting Monday, will be able to access their money, even if their holdings exceed the FDIC’s $250,000 insurance limit. The statement also notes that “no losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.” As the AP points out, there has been no bailout of the actual bank—banks, actually; more on that below:

Another bank fails: Signature Bank, which is based in New York, also failed and was being seized Sunday, regulators announced. The feds’ statement says “a similar systemic risk exception” will apply to Signature Bank: “All depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.” It’s the third-largest bank failure in the nation’s history at more than $110 billion in assets (SVB was the nation’s second-largest ever). It’s also the third bank failure in recent days after Silvergate Bank and then SVB.

  • Shoring up other banks: The feds’ statement said “additional funding” will be available “to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors,” and First Republic Bank has already announced it’s getting access to that funding as well as funding from JPMorgan Chase. The Wall Street Journal has more on that.
  • Emergency lending program: The Fed also announced an emergency lending program Sunday, under which banks that need to raise money to pay depositors can borrow it from the Fed instead of dumping Treasuries or other securities, as SVC was forced to do at a loss to cover customer withdrawals. MarketWatch has more on the program.
  • Who’s not protected: The feds’ joint statement notes that “shareholders and certain unsecured debtholders will not be protected. Senior management has also been removed.” Axios reports that SVB had reportedly paid out bonuses to some US employees hours before it was seized.
  • Biden comments: Speaking as he boarded Air Force One Sunday on his way back to Washington, Biden said he was “firmly committed to holding those responsible for this mess fully accountable and to continuing our efforts to strengthen oversight and regulation of larger banks so that we are not in this position again.” He said he’d address the situation in further remarks Monday.
  • What will Monday look like? Analysts predicted financial markets would be soothed a bit by Sunday’s moves. “Monday will surely be a stressful day for many in the regional banking sector, but today’s action dramatically reduces the risk of further contagion,” economists at Jefferies, an investment bank, said in a research note.

Is this the beginning of another economic crisis?

Shades of 2008!

You might want to keep an eye on your accounts in these large banks….you may be in line for a problem.

I Read, I Write, You Know

“lego ergo scribo”

Inflation–How Did It Come To This?

Tomorrow we go to our polling stations and cast our votes for the ‘future’ of this nation.

We are told by the MSM that the most important issue of this election is the economy more specifically rising inflation…..watching the events and the sounds around this election I do not agree that it will be the deciding factor.

If that is true why has seemingly no one explained how it came to this.

One side blames Biden for the disaster of the economy and the other side blames…well whatever is the most convenient…..but just what or who brought us to this moment in our election process?

One of the culprits for this crisis is being dropped at the feet of the Fed.

The Federal Reserve has made two major policy blunders in the last 25 years. 

The first was being unaware that the foundation of the U.S. banking system had been eroded away by complex mortgage securities that carried high credit ratings but turned out to be toxic during a broad housing downturn. The resulting meltdown in valuations caused the global financial crisis in 2008 that hobbled the U.S. economy for years.

More recently, a misreading of the strength of the labor market and the persistence of price shocks sparked by the pandemic led to the highest inflation rate in 40 years and the final chapter of this saga is still to be written. The policy error paved the way to make 2022 the worst year in financial markets arguably since the 1930s. Both stocks and bonds have plummeted and Federal Reserve Chairman Jerome “Jay” Powell is at the center of the financial turmoil, landing him on the MarketWatch 50 list of the most influential people in markets. 

Critics have pounced on the Fed. Powell’s insistence that rising inflation was “transitory” and would quickly dissipate once the economy reopened more fully has been called “probably the worst inflation call in Fed history” by Mohamed El-Erian, chief economic adviser for Allianz. The economist Stephen Roach has compared Powell to former Fed chair Arthur Burns, whose indecisiveness under intense political pressure led to the crushing inflation of the 1970s. As recently as March 2022, when the Labor Department was reporting a 7.9% annual rise in consumer prices, Powell and the Fed were just wrapping up their injections of liquidity into financial markets.

How Powell, who is not a trained economist, is ultimately remembered will depend on whether he’s able to tame inflation without driving the U.S. into a deep recession. It could still all end relatively well, but the debate about what signs the U.S. central bank ignored and why will be studied and debated for years to come.

https://www.marketwatch.com/story/why-did-inflation-surge-to-a-40-year-high-here-are-4-causes-of-the-worst-monetary-policy-mistake-in-years-11667318263

I tried last week to help fill in the gaps in our knowledge of inflation and even included some ‘solutions’ given by some in the GOP….

It’s Election Time–It’s Inflation

If you want to help this country then please consider all angles….do not just vote for pasty faced old white guy….for their solutions are antiquated and not going to actually help in the 21st century.

Please take the time to vote.

I Read, I Write, You Know

“lego ergo scribo”

Shades Of 2008

Here we go again!

Does anyone remember the crash of 2008…..well do not look now but it is happening all over again (as predicted because Congress could not rein in the greed and corruption of the banks.)

A year ago, mortgage rates were below 3%. On Thursday, Freddie Mac data showed the average rate for a 30-year fixed mortgage was up to 5.89%, the highest point since 2008, NBC News reports. Rates briefly dropped this summer as the Federal Reserve raised the key interest rate in an effort to slow inflation. The housing market already was cooling off, per the Wall Street Journal. It’s a sector the Fed can exert great influence over because the market responds to changes in interest rates. “We’re all focused on the housing sector,” Fed Vice Chairwoman Lael Brainard said at a conference Wednesday.

The mortgage industry boomed during the pandemic, as many companies refinanced borrowers seeking loans at lower rates. Companies often were able to expand, but that’s over now that rates are rising again, with some having to lay off employees or shut down, per the Journal. Chairman Jay Powell indicated Thursday that the Fed wants to keep rates higher for a while. The climb in mortgage rates is a reaction to Powell’s comments last week, said Lisa Sturtevant, chief economist for a real estate data firm, “in which he reiterated his unwavering focus on bringing inflation down to its 2% target level.”

If there is yet another crash we can lay the blame at the feet of Congress and the president…..the powers are scrambling to try and head off this inevitability until after the mid-terms.

Watch your mortgage rates closely…..

I Read, I Write, You Know

“lego ergo scribo”

Answers To Inflation

As the country is in the grip of runaway inflation especially on gas and food all our politicians are scrambling to look for answers ahead of the upcoming elections….and there are many solutions none of which will do much for us mere mortals.

The GOP has some big ideas…..

House Republicans gathered this week for an off-site hearing denouncing the Biden administration’s economic and energy agenda, blaming the president for record-high inflation and gas prices while proposing solutions that largely focused on reining in government spending and expanding domestic energy manufacturing.

Led by Rep. Andy Biggs (R-AZ), members of Congress heard from a panel of witnesses including former Trump administration Energy Secretary Rick Perry and Club for Growth co-founder Stephen Moore at an event held Tuesday at the Heritage Foundation.

For an hour and a half, Republicans considered proposals ranging from dramatically cutting taxes and government spending, enacting work requirements for social welfare programs, and abolishing “renewable energy mandates” that restrict the production of oil and other fossil fuels.

Although some policy disagreements among them were evident, the event’s attendees were unified in their harsh criticisms of President Joe Biden, fixing the blame squarely on his administration for the country’s economic woes.

“With gasoline at $5 per gallon and inflation at nearly 9% year over year, we need to hold the Biden administration accountable,” Biggs argued. “With Democrats in charge of the House, Senate, and the White House, they are the ones who produced this problem.”

https://www.washingtonexaminer.com/news/house/house-republicans-biden-inflation-gas-prices-heritage-biggs

As pertaining to a ‘gas holiday’….this seems to be popular with both parties….apparently the American voter is so stupid that paying $3 a gallon for gas will make them somehow comfortable….to me this is just a feel good solution that will do little to ease the economic pain of us peasants.

Bidenism in a nutshell: After blasting oil companies for price gouging, Biden announced a suspension of the federal gas tax for three months, a move which will do almost nothing to reduce prices at the pump but will almost certainly provide an even bigger boost to oil company profits.

The site fivethirtyeight.com takes a closer look at the idea of a gas holiday……

Earlier this week President Biden asked Congress to temporarily suspend collection of federal gas and diesel taxes for three months as a way to relieve pressure on Americans as national gas prices rise to $5 a gallon. If the price keeps going up, it could top highs not seen since the summer of 2008. High gas prices are also helping to drive overall inflation, which reached 8.6 percent as of May. 

It’s no surprise, then, that Biden is responding to pressure to do something — anything — about gas prices. As plenty of people have pointed out, the cost per gallon is displayed on giant signs everyone can see. Transportation and groceries are necessities that are purchased weekly or even daily, which means Americans feel these changes in a visible, visceral way. It also gets at why they’re so important politically, especially as surveys show that Americans are adjusting their budgets. 

Nearly three-quarters of Americans say they’ve altered their spending habits to save money because of inflation, according to a Morning Consult poll released this week. More than half, 53 percent, say they’ve changed their eating and drinking habits. Families are eating out less often, cutting back on meat and forgoing alcohol and organic produce.

A similar poll from last month found that middle-income households were spending slightly less on groceries overall and shifting to less expensive options, like store brands instead of name brands. (Higher-income families were just spending more.) 

A Gas Holiday Might Be Popular, But It’s Unlikely To Do Much To Lower Inflation

So far none of the solutions being offered by either party will do the trick at easing our economic pain…..at least that is my opinion.

There are answers but they would flying in the face of the oligarchs that have bought a Congress and that will NEVER happen in my lifetime…..the Congress gets paid too well to actually work for the people that send them to DC.

As I have stated inflation is eating away at the fiber of this country….its people…..and we should learn all we can about this deadly situation….

The focus of the US media and economists for the past several months has been increasingly on inflation.  In recent weeks, however, US policymakers awoke as well to the realization that inflation is chronic, firmly embedded, and growing threat to the immediate future of the US economy.

A qualitative ‘threshold of awareness’ was reached this past week when the US central bank, the Federal Reserve, accelerated its pace of rate hikes by 75 basis points—purportedly to bring the rate of price hikes under control. Whether the Fed can succeed in taming inflation and do so without precipitating a recession remains to be seen but is highly unlikely. Taming inflation without provoking a recession is thus the central economic question for the remainder of 2022.

Clearly some think this is possible—i.e. that further rate hikes will moderate the pace of inflation without driving the real economy into recession and result in what is called a ‘soft landing’. Clearly the Fed and the Biden administration believe that will happen. But a growing chorus of even mainstream economists and bank research departments don’t think so.  Almost daily new forecasts by global banks and analysts appear indicating recession is more than 50-50 likely—and arriving sooner in late 2022 than in 2023.

The Anatomy of Inflation

Hard answers are needed……weak responses will be the norm.

I Read, I Write, You Know

“lego ergo scribo”

Biden On Inflation

Inflation is roaring to new heights daily…..high gas prices….runaway food prices….everything is making life difficult for most Americans…..

With an election approaching Biden has decided to sound more in control than he is…….

How about those gas prices?

About a month ago, President Biden ordered the release of a million barrels of oil a day from national reserves to help curb steep gas prices. On Tuesday, however, those gas prices reached their steepest point on record—an average of $4.37 across the US, reports the Hill. No state has gas for less than $3.90, and drivers in California are paying $5.84. When adjusted for inflation, Americans paid more in 2008, the equivalent of an average of $5.37 a gallon in today’s dollars. But Biden himself on Tuesday acknowledged the hit to people’s wallets from rising prices in general.

“I know that families all across America are hurting because of inflation,” he said in a White House speech Tuesday, per Reuters. “I want every American to know that I am taking inflation very seriously and it is my top domestic priority.” Biden, apparently trying to head off voter resentment before the midterms, sought to blame Republicans for holding up his agenda and contrasted his plans with one floated by GOP Gov. Rick Scott of Florida for a minimum federal income tax, reports the Washington Post.

“The bottom line is this: Americans have a choice right now between two paths reflecting two very different sets of values,” Biden said. “My plan attacks inflation and lowers the deficit. … The other path is the ultra MAGA plan.” Emma Vaughn, a spokesperson for the Republican National Committee, counters: “Voters know that Republican-led states are leading in economic recovery and job creation, and will vote for Republicans and our proven agenda come November.”

This is all so much bullsh*t!

How will he work ‘lower deficits”?

I mean we are throwing money at Ukraine in a shocking amounts….money that is needed here….but no somebody somewhere has decided war is more important (read profitable) than the people of this country.

I want to see this ‘plan’ more in detail….but what little information I have it is nothing more than election posturing that is no help to those Americans struggling with their monetary lives.

But what the big story is that inflation may be slowing before the plan is announced…

Inflation slowed in April after seven months of relentless gains, a tentative sign that price increases may be peaking while still imposing a financial strain on American households. Consumer prices jumped 8.3% last month from 12 months earlier, the Labor Department said Wednesday. That was below the 8.5% year-over-year surge in March, which was the highest rate since 1981, reports the AP. On a month-to-month basis, prices rose 0.3% from March to April, a still-elevated rate but the smallest increase in eight months. Consumer prices had spiked 1.2% from February to March, mostly because of a sudden jump in gas prices triggered by Russia’s invasion of Ukraine

Still, the Wall Street Journal points out that the so-called core-price index—which drops some volatile categories, like food and energy—was up 0.6%, a “sharp pickup” from March’s 0.3% rise. Nationally, the price of a gallon of regular gas has reached a record $4.40, according to AAA, though that figure isn’t adjusted for inflation. Gas had fallen to about $4.10 a gallon in April, after reaching $4.32 in March. The April report “suggests that the deceleration is going to be painstakingly slow,” Principal Global Investors chief strategist Seema Shah tells CNBC.

New disruptions overseas or other unforeseen problems could always send US inflation back up to new highs. If the European Union decides, for example, to cut off Russian oil, gas prices in the United States would likely accelerate. China’s COVID lockdowns are also worsening supply problems and hurting growth in the world’s second-biggest economy.

My question now is…did Biden make his announcement because he saw the news for political gain?

I guess it did not matter for the inflation news was worse than the media had pretended otherwise….

Stocks fell on Wall Street Wednesday, led by more drops in technology companies, after a report on inflation came in worse than feared. The S&P 500 fell 65.87 points, or 1.6%, to 3,935.18. The Dow Jones Industrial Average fell 326.63 points, or 1%, to 31,834.11. The Nasdaq fell 373.44 points, or 3.2%, to 11,364.24. Wednesday’s report from the US Labor Department showed inflation slowed a touch in April, down to 8.3% from 8.5% in March. Investors also found some glass-half-full signals in the data that inflation may be peaking and set to ease further. Nevertheless, the numbers were still higher than economists forecast.

They also showed a bigger increase than expected in prices outside food and gasoline, something economists call “core inflation” and which can be more predictive of future trends. Economists said the inflation report will keep the Fed on track for rapid and potentially sharp increases in interest rates in upcoming months, the AP reports. “Core inflation came in hot, and that’s what really matters to the Fed at this point,” said Brian Jacobsen, senior investment strategist at Allspring Global Investments.

Where will this American nightmare end?

I will be watching!

Watch This Blog!

I Read, I Write, You Know

“lego ergo scribo”

Closing Thought–22Jul20

This pandemic has done major damage to the working class…..they have seen the wages disappear and their livelihood shrink to nothing. In other words it has been devastating to the economy….well not so devastating for some…..some have made out like bandits without guns…..

How wonderful!  I am so glad that billionaires keep making lots of cash while the rest of society suffers.

Time for society to fight back.

Time for these slackers to do their part for this society.

The time has come……period!

Have you been impressed with the Dems handling of the economic pandemic?

Re-think your “atta boys”…..

Some 25 million US workers are facing a reduction or outright elimination of a $600 weekly federal addition to state unemployment benefits when the supplemental payment authorized by Congress under the CARES Act expires on July 25.

In the midst of a raging pandemic and the worst economic crisis since the Great Depression, with at least 30 million out of work and new jobless claims surpassing one million a week, the supplement is all that has been keeping many families above water. Coinciding with the impending end of a federal moratorium on evictions and the expiration of state moratoriums, the cut in jobless pay will propel millions into destitution and homelessness.

One survey found that 37 percent of renters and 26 percent of homeowners feared they could be homeless by the end of the year. Researchers at Columbia University say they expect US homelessness to increase by 45 percent compared to 2019.

https://www.wsws.org/en/articles/2020/07/21/pers-j21.html

STOP! believing the hype that Dems are the friends of the working class….it is a CON!

A closing thought…..we know how much Trump hates China and has gone out of his way to sanction them, right?

If that is true why has he ordered about 8 tons of stuff?

President Donald Trump’s US properties imported more than eight tons of Chinese goods since September, according to a CNN analysis. 

More than six tons of tables were shipped to Trump International Hotel in New York last fall and two tons of cabinets were delivered to Trump National Golf Club Los Angeles in May, CNN reported.

On the 2016 campaign trail and throughout his presidency, Trump has accused China of unfair trade practices and pledged to address the trade deficit between the two countries.

As part of his “America First” policy, Trump entered a months-long tariff war with Beijing and has pressured American companies to redirect their business within the U.S.

https://www.businessinsider.com/trump-owned-properties-imported-more-than-8-tons-of-chinese-goods-2020-7

I Read, I Write, You Know

“lego ergo scribo”

Coronomics (A New Term)

This damn virus, the Covid-19, has brought about a whole bunch of new thinking and responses to a crisis……even some new terms for the analysis…..Coronomics is the one that I wish to introduce to my reader.

Economics is not something that most people will want to read about….but maybe they should because this virus is playing fast and loose with their economic future.

The ugly side of the economics of the pandemic……

The chart shows that 9.9 million initial unemployment insurance claims have been made over the last two-week period, creating a graphic described as "difficult to stomach" by economic analysts. (Source: The Block/FRED)

That extension of the Unemployment insuarnce has its dark side as well…..

It’s worth noting that UI claims do not include many workers who are out of work due to the virus, including independent contractors, those who don’t have long enough work histories, those who had to quit work to care for a child whose school closed, and more, so the actually number of people out of work is higher than today’s’ data show us. One of the most effective parts of the CARES ACT, the relief and recovery act that Congress passed last week, is a $250 billion expansion of unemployment insurance, including an increase in the level of benefits and the creation of a Pandemic Unemployment Assistance (PUA) program which will be available to many workers who are not eligible for regular unemployment insurance. These provisions are very important and will help millions. However, the broader stimulus package contains many weaknesses that reduce its effectiveness, which is regrettable because the job loss we have seen so far is just the tip of the iceberg. Based on new GDP forecasts, we project that nearly 20 million workers will be laid off or furloughed by July, with losses in every state. And importantly, the GDP forecasts these projections are based on include the impact of the CARES Act and they assume that Congress will pass another relief package focused on aid to states. That implies that far more than 20 million workers will be laid off or furloughed if there is not another meaningful relief and recovery bill.

(commondreams.org)

Small businesses are suffering because of this shelter in place orders and there are those that will take advantage of the situation…..those crooks in the “pay day loan” business…..

…

one industry, which offers an obscure form of financing to small businesses called Merchant Cash Advances (MCA), has seemingly taken a different approach.

“There’s lots of talk about helping small businesses. But in the last few days, lawyers running lawsuit mills are suing small businesses to extract cash,” Federal Trade Commission member Rohit Chopra tweeted on March 19 about the MCA industry. “The lawyers work for lenders that offer pricey payday-style loans using sketchy contract terms to restaurants and businesses.”

MCAs are a form of financing typically leveraged by small businesses that don’t have access to traditional loan options. MCAs are not loans, rather, they’re the sale of a portion of a business’s future income at a discount. Typical MCA agreements require businesses to make payments every business day of a set dollar amount until the agreement is settled.

MCA agreements often include “confessions of judgment,” clauses that force businesses to plead liable if the MCA provider alleges that the agreement has been breached, which can occur if the business misses just one or two of their daily payments. The agreements typically grant providers the immediate right to the outstanding balance from the business in the event of a breach.

https://dailycaller.com/2020/03/30/itria-ventures-merchant-cash-lawsuits/

Your ordinary economic solutions will be as worthless as the promises from the White House……

We have seen crashes before, recessions and depressions, but nothing like this. Our fear of coronavirus has hindered and halted every aspect of daily life. We look out of our windows and barely recognise the country we’re in: police film dog-walkers and pour black dye into lagoons to deter swimmers. We wait in queues for empty-shelved supermarkets. The stock market collapses, surges, then collapses again. None of the old rules make sense. Welcome to the world of Coronomics.

If this were a normal recession, the remedy would be simple: encourage people to go out, spend money and boost the economy. But today’s public health concerns require the government to repress the economy, while trying to keep it afloat at the same time. Streets are quiet, hotels are empty, restaurants, pubs and high-street shops are shuttered. To tackle the virus, the economy must hibernate.

https://www.spectator.co.uk/article/coronomics-ordinary-remedies-wont-be-enough-for-a-surreal-crash

The Atlantic has offered up 4 Rules for the economics of this pandemic……

Rule 1: “Save the economy or save lives” is a false choice.

Last week, a group of economists from the Federal Reserve and MIT published a paper on the 20th century’s most murderous flu, the 1918 outbreak. Because the federal government in 1918 offered little if any economic assistance to suffering Americans, the local response from city leaders varied widely. Some places, such as New York and St. Louis, quickly ordered social distancing and other interventions, while others, such as New Haven and Buffalo, allowed public gatherings even weeks after the flu reached crisis levels. This variance gave researchers the ability to see which cities recovered the fastest after the outbreak.

https://www.theatlantic.com/ideas/archive/2020/04/new-laws-pandemic-economics/609265/

These small businesses pay their taxes (or they should be) and if the government needs to step in and protect them from failing then I have NO problem with that solution.

I ask just one thing….please stop jumping down my throat when I write about socialism for this solution is socialism 101….

Learn Stuff!

I Read, I Write, You Know

“lego ergo scribo”

29 October In History

The year is 539 BC……Persian king Cyrus the Great conquers Babylon and frees the Hebrew slaves and allows them to return to their homeland……but that is not important for we hate Iran (Persia)…..

But what happened here in the good old U.S. of A.?

Does anyone know what happen 90 years ago today?  (Of course you don’t for it does not concern you)……

……..I will wait while the Google machine gets a work out…….

It was called “Black Tuesday”….does that help?

The great Stock Market Crash of 1929 and the beginning of what would be called the “Great Depression”….a time that changed much here in the US.

On October 29, 1929, Black Tuesday hit Wall Street as investors traded some 16 million shares on the New York Stock Exchange in a single day. Billions of dollars were lost, wiping out thousands of investors. In the aftermath of Black Tuesday, America and the rest of the industrialized world spiraled downward into the Great Depression (1929-39), the deepest and longest-lasting economic downturn in the history of the Western industrialized world up to that time.

https://www.history.com/topics/great-depression/1929-stock-market-crash

Let us look closely at what happened that caused this “crash”?

The stock market crash of 1929 – considered the worst economic event in world history – began on Thursday, October 24, 1929, with skittish investors trading a record 12.9 million shares. On October 28, dubbed “Black Monday,” the Dow Jones Industrial Average plunged nearly 13 percent. The market fell another 12 percent the next day, “Black Tuesday.” While the crisis send shock waves across the financial world, there were numerous signs that a stock market crash was coming. What exactly caused the crash – and could it have been prevented?

https://www.history.com/news/what-caused-the-stock-market-crash-of-1929

Now we know what happened so the question now is could it happen again?

Few people are alive anymore who remember living through the stock market crash of 1929. But plenty of people still view that fateful plunge as a worst-case scenario for what might befall investors.

The roughly 20% decline for large stocks in October 1929 actually wasn’t the market’s worst month ever, but the drop incited nearly three years of relentless selling and helped to usher in the Great Depression. Could a 1929-style market setback happen again?

Yes, it could.

https://www.azcentral.com/story/money/business/economy/2019/10/13/stock-market-crash-october-1929-great-depression-economic-downturn/3910471002/

More thoughts on the possibility of the Crash happening again…..https://www.washingtonpolicy.org/publications/detail/the-crash-of-1929-could-it-happen-again

Be Smart!

Learn Stuff!

I Read, I Wrote, You Know

Class Dismissed!

“Lego Ergo Scribo”