OMG
Greetings!
From this day forward, I will be the new chairman of the federal reserve. Now let's see if we can do anything about that deficit!
You see, the current government is stuck in the 'more is better' mindset. Basically, the think that as long as there are people willing to spend money, then they should provide the people with whatever it is they want. This isn't necessarily BAD, as long as the people actually have the money to pay for what they want.
The problem arises when you throw 'credit' into the mix. Basically, large companies are trusting you to pay that money back someday, so they'll give it to you now. and this can be beneficial for large purchases, like homes and cars and such. No person would be able to save up enough money upfront for something like that.
Previously, the government had laws about who you could give credit to how much credit you could give. That's why your credit rating was so important: you couldn't get jack shit if you had messed up credit. And why was that? Because everyone knew you wouldn't pay them back for the loans you took out. And loan companies also looked at things like your yearly income to decide how much credit to give you. If you only make 30,000 a year, they're not going to give you a loan for over 9000 million dollars.
However, those laws have been repealed, and large loan companies like Fannie Mae and Freddie Mac have been giving out huge loans left and right. They thought it was more money for them in the long run, so why not?
But of course, those people couldn't pay for their loans, and they had to default on them and declare bankruptcy. Sure, the loan companies get some money back, but most of it is lost in the process and the companies have to eat the loss. It is normal for a few loans to go bad at any given time, and loan companies have a big enough profit margin that a few won't hurt them much. But when you have a lot of people defaulting on huge loans like this, losses are in the billions of dollars, and the companies themselves have to go bankrupt.
Of course, the government can't just let the companies go bankrupt. America is a Capitalist nation, and if all of the loan companies suddenly went bankrupt then it would cause a chain reaction that would destroy our economy and possibly our whole country. So, the government uses tax dollars to help these loan companies when they are in trouble. Of course, this means that the government SHOULD raise taxes to offset the cost, right?
But our current administration is full of Republicans. You see, Republicans are known as the 'spenders': they cut taxes, so that the American people have more money to buy the shit they want. This helps to stimulate the economy, but the government has to cut back on government programs. And on the other side, we have Democrats, who are the 'savers': they raise taxes, so the people have less money to spend on nifty shit, but in return they have all sorts of government programs to help the American people.
Now, neither of these are inherently good or bad. In fact, you need cycles of both to have a good economy and a good country. Problems begin to happen when you spend too much time in one or the other. Too much time with the Democrats, and you have awesome programs for the poor, but there are more poor people because companies are shutting down because of decreased spending. Too much time with the Republicans, and there's lots of entry-level jobs at stores to sell shit, but it's almost impossible for poor people to find better jobs and get better lives (and thus have more money to spend) because there's little to no support for the people from the government.
So, in order to restore our economy to it's previous glory, we have to make the switch from the current 'spend' mindset to the much-needed 'save' mindset. Then we can save up the money to pay for the fuck-ups of the last eight years, and hopefully get those old loan laws back into place. That way the loan companies stop giving loans for more than people can afford to have, then the people stop defaulting on the loans, and the companies stop relying on the government for help with their massive debt.
You don't want to stop spending ENTIRELY, however. There are still needs you have to meet, like housing, food, and utilities. However, instead of spending all of your extra money to buy a bunch of new video games each month, how about only buying one every other month and saving the rest of your money?
The sad truth is, most people don't realize how everything relies on another to keep up a harmonious balance within the government. I encourage everyone to help bring the economy back to what it was before. I may be the chairman of the federal reserve, but the people still get to decide what becomes a law.
From this day forward, I will be the new chairman of the federal reserve. Now let's see if we can do anything about that deficit!
You see, the current government is stuck in the 'more is better' mindset. Basically, the think that as long as there are people willing to spend money, then they should provide the people with whatever it is they want. This isn't necessarily BAD, as long as the people actually have the money to pay for what they want.
The problem arises when you throw 'credit' into the mix. Basically, large companies are trusting you to pay that money back someday, so they'll give it to you now. and this can be beneficial for large purchases, like homes and cars and such. No person would be able to save up enough money upfront for something like that.
Previously, the government had laws about who you could give credit to how much credit you could give. That's why your credit rating was so important: you couldn't get jack shit if you had messed up credit. And why was that? Because everyone knew you wouldn't pay them back for the loans you took out. And loan companies also looked at things like your yearly income to decide how much credit to give you. If you only make 30,000 a year, they're not going to give you a loan for over 9000 million dollars.
However, those laws have been repealed, and large loan companies like Fannie Mae and Freddie Mac have been giving out huge loans left and right. They thought it was more money for them in the long run, so why not?
But of course, those people couldn't pay for their loans, and they had to default on them and declare bankruptcy. Sure, the loan companies get some money back, but most of it is lost in the process and the companies have to eat the loss. It is normal for a few loans to go bad at any given time, and loan companies have a big enough profit margin that a few won't hurt them much. But when you have a lot of people defaulting on huge loans like this, losses are in the billions of dollars, and the companies themselves have to go bankrupt.
Of course, the government can't just let the companies go bankrupt. America is a Capitalist nation, and if all of the loan companies suddenly went bankrupt then it would cause a chain reaction that would destroy our economy and possibly our whole country. So, the government uses tax dollars to help these loan companies when they are in trouble. Of course, this means that the government SHOULD raise taxes to offset the cost, right?
But our current administration is full of Republicans. You see, Republicans are known as the 'spenders': they cut taxes, so that the American people have more money to buy the shit they want. This helps to stimulate the economy, but the government has to cut back on government programs. And on the other side, we have Democrats, who are the 'savers': they raise taxes, so the people have less money to spend on nifty shit, but in return they have all sorts of government programs to help the American people.
Now, neither of these are inherently good or bad. In fact, you need cycles of both to have a good economy and a good country. Problems begin to happen when you spend too much time in one or the other. Too much time with the Democrats, and you have awesome programs for the poor, but there are more poor people because companies are shutting down because of decreased spending. Too much time with the Republicans, and there's lots of entry-level jobs at stores to sell shit, but it's almost impossible for poor people to find better jobs and get better lives (and thus have more money to spend) because there's little to no support for the people from the government.
So, in order to restore our economy to it's previous glory, we have to make the switch from the current 'spend' mindset to the much-needed 'save' mindset. Then we can save up the money to pay for the fuck-ups of the last eight years, and hopefully get those old loan laws back into place. That way the loan companies stop giving loans for more than people can afford to have, then the people stop defaulting on the loans, and the companies stop relying on the government for help with their massive debt.
You don't want to stop spending ENTIRELY, however. There are still needs you have to meet, like housing, food, and utilities. However, instead of spending all of your extra money to buy a bunch of new video games each month, how about only buying one every other month and saving the rest of your money?
The sad truth is, most people don't realize how everything relies on another to keep up a harmonious balance within the government. I encourage everyone to help bring the economy back to what it was before. I may be the chairman of the federal reserve, but the people still get to decide what becomes a law.