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Friday, July 29, 2011

By the numbers

There's much conversation going on throughout the Nation at the present with much rancor and vitriol between the major two political parties, Tea Party, both houses of Congress, the White House and the citizens of this great nation. The cause for such furor stem from the need to raise what is commonly called, the "debt ceiling", simply put, debt ceiling is a cap on how much money the US federal government can owe. The debt ceiling has been raised 74 times since March of 1962 and 10 times since 2001. In the past, the debt ceiling was raised without much of a squabble and it only took a one page document to accomplish the raising of the debt ceiling, but with the mid term election of 2010 and the various political activist groups, things are a bit different this time around. The newly elected members of congress in the house of Representatives seems to have a mind set that they have been given a mandate to close the purse of the federal government. Albeit, I do believe their ideologue has cause them to act in a fashion that is not beneficial to the well being of this nation as a whole. There is a difference between "debt" and "deficit", the former refers to an obligation, something that is owed, which translate 'you have already utilized or are utilizing the goods; it's time to pay up' , it's the same as if you were making payments on an automobile, now the latter refers to an excess of expenditure over revenue, which is to say 'you are spending more than you are taking in' i.e. your weekly bring home pay is $300.00, your mortgage on that 3'000 sq, ft. home is  $1,400.00 a month, you are $200.00 in the hole in just one month, that $200.00 short fall is your deficit as it pertain to revenue minus expenditure. In twelve months, at that rate of 'short fall' you'll be behind to the tune of $2,400.00 dollars. This is what the federal government is facing. Moreover, one must take in account the interest that is accumulated on such borrowing. For the U.S. government, it has been reported that out of every dollar the federal government spend, no less than 40 cents is borrowed, ladies and gentlemen, this kind of borrowing will eat you alive.
At the end of fiscal year of 1992, the national debt was 2.999.7 trillion dollars, the end of fiscal year 2000, 3.409.8 (T), end of fiscal year 2008, 5,803.1 (T), with  approximately two months before the end of this fiscal year, it stands at over 14 trillion dollars. No country can continue on a path of prosperity with those kind of incongruous numbers. Further more, no nation is able to remain a nation with its citizens unable to compromise for the good of that country. This country did not dig this hole we find ourselves in over night and we will not extricate ourselves from this place of indebtedness on any short order. But surely, the one thing we must do, is work together and remember, "we all are Americans and in great effort with unity of mind and body, we shall chart our course with much resolve to accomplish that which we know we must, for the survival of the nation hinges on our toil for the greater good of our most beloved". 

Tuesday, July 26, 2011

How the American dream became a nightmare (a continuance)

There was a time when owning a home was considered one of the most accomplished achievement a person could stick under their belt, and it continue to be a good investment (what else can you possess in todays market that will give you the same type of exuberance?) The investment nowadays (as it pertains to owning a home) is not what you have in a bank account but rather its in the serenity of mind. The unscrupulousness of derivative traders and others on Wall Street has caused much alarm in the housing market. The Gross Domestic Product (GDP) refers to the market value of all final goods and services produced within a country in a given period. For sometime now, this nation has not been producing very much, certainly not as it pertains to the goods that are made in America. It has been reported lately, the foreclosures of homes is the most single cause of "return to poverty" for a large number of this country population (most noticeable among the African - American population), that is not to suggest that other groups has not been affected severely. But when you are behind in the economic picture as it relates to all that goes with it, it is not hard to imagine how the "return to poverty" would not apply to the African - American community (AAC) in a most profound way. 
Congress allowed those on Wall Street (which include your largest banks) to play a game of "get all you can; anyway you can," the result has been nothing short of catastrophic for this country citizens and quite frankly, it has added to the depression and survivability of this nation.
A nation is only as great as its people are in harmony with the actuality of being cared for and at peace with the conditions and well being of its citizens. That is not the case with what I believe of the ninety-eight percent of this nation (United States) citizens.
Fannie Mae and Freddie Mac, two entities that are privately run ed  but has the backing of the U. S. government. Congress authorized Fannie Mae to purchase private mortgages  in 1970, i.e. those mortgages not ensured by the FHA, VA or FmHA, those mentioned, along with the Federal Home Loan Corporation (FHLMC) were the instruments used to put this country citizens into their "dream home". In 1999, Fannie Mae came under pressure from the Clinton Administration to expand mortgage loans to low and moderate income borrowers, even a blind person should have seen this having the potential of being a recipe for disaster. One of the principle item in repaying any loan is, the ability to earn a wage. If you become unemployed or injured to a degree that you are without a pay check for two weeks, you are going to be hard pressed to meet any of your obligations as it relates to finances, and by the way, that's what happened to many of the borrowers of such loans. Of course, there was another dynamic that added to the current foreclosure atmosphere, and that is, some bankers steered individuals into the sub-prime corral (this happened to more AA's) than needed to be, whereas they would have qualified for a conventional loan, some unscrupulous jackass or jenny steered them into Adjusted Rate Mortgages (ARM's), the acronym fit quite well here, after all, that's the price this charade has cost-ed those that got caught up in this swirl wind,which has only exacerbated the foreclosure atmosphere.
Going forward will require some skillful maneuvering. It's hard, if not downright impossible to get the baby clean while she's still in the mud (the nation economy). I do not mean to cause any further distress to you, but allow me to say this, I don't think you'll be having any pleasant dreams for quite some time to come.