From
Why Does the GOP Hate the Occupy Movement So Much?
It’s generally accepted by the GOP and their allies that Wall Street trading had nothing to do with the 2008 economic downfall. Instead, they often find themselves blaming a host of boogeymen: the then-Democratic Congress, Massachusetts Rep. Barney Frank, President Clinton, President Barack Obama and the “losers” who got the shaft on their home loan.
But Wall Street did start this mess. And they were able to do so because of 30 years dedicated to dismantling Great Depression- era bank regulations. If the Occupy protests can get this message across to voters the way Tea Partiers got the “Obama is a fascist” mantra into peoples’ heads, that could mean trouble for the GOP in 2012.
“I think when people say they’re the 99 Percent,” says Robin, “they’re reclaiming that we’re all in this together and it’s really just this small minority that’s [destroyed the economy]. It reminds me of the way gays and lesbians have reclaimed the word ‘queer.’ We’re all in debt and it’s nothing to be ashamed of. It’s not our fault. It’s an economy that’s built on debt and subsidized by debt, and there needs to be a new way of organizing things.”
Ronald Reagan and Bush, father and son, destroyed America. Americans need to recognize that fact.
ReplyDelete"We’re all in debt and it’s nothing to be ashamed of. It’s not our fault."
ReplyDeleteWell I am in debt, but I know it is indeed my fault. I spent more than I made and therefore I am in debt. Whose fault does this person think it is that they are in debt? Did someone hold a gun to their head and force them to buy something that they didn't really need?
Jim, there was rampant fraud involved in many of the instances of debt.
ReplyDeleteOr haven't you heard of the robo signing scandals, or the widespread credit rating fraud?
DG - the robo signing scandals had to do with foreclosures on houses. I agree that if the banks acted fraudulently then the banks should suffer the consequences. I am not sure what you mean by the credit rating fraud, but I would assume that most of the debt these protestors have revolves around either student loans, mortgage payments, or personal credit card debt. The student loans and mortgages should have been fully understood by the people before they signed them. I have bought a few houses, and in every case I completely understood what my mortgage terms were for the length of the contract. If you signed up for a variable interest rate, then you needed to expect the rate to go up by the maximum allowed. If you signed up for an interest only loan, then you needed to understand that at some point you would have to repay the purchase amount. Again, it is not like anyone forced them to buy these houses. The same for student loans and personal purchases. You have to understand the terms you are agreeing to if you plan on financing your college or other purchases.
ReplyDeleteThere have instances of robo signing on other documents than mortgages; mortgages have gotten the most news attention.
ReplyDeleteBeyond that there are many people who find themselves in personal financial crisis because the real estate collapse left them out of jobs and out of their homes and without medical insurance which in turn resulted in their debt.
There is debt that IS the fault of individuals, but there was also more than enough cheating that has directly and indirectly resulted in the wealth gap and the debt crisis.
I think we've gotten into this before, Jim, but the comment: It’s an economy that’s built on debt and subsidized by debt refers to the fractional reserve banking system.
ReplyDeleteThis is where banks maintain reserves (of cash and coin or deposits at the central bank) that are only a fraction of the bank's deposits. Funds deposited into a bank are mostly lent out, and a bank keeps only a fraction (called the reserve ratio) of the quantity of deposits as reserves. Some of the funds lent out is subsequently deposited with another bank, increasing deposits at that second bank and allowing further lending. As most bank deposits are treated as money in their own right, fractional reserve banking increases the money supply, and banks are said to create money. Due to the prevalence of fractional reserve banking, the broad money supply of most countries is a multiple larger than the amount of base money created by the country's central bank. That multiple (called the money multiplier) is determined by the reserve requirement or other financial ratio requirements imposed by financial regulators, and by the excess reserves kept by commercial banks.
In short, only a fraction of bank deposits are backed by actual cash-on-hand and are available for withdrawal.
Simply put. You stick your money in the bank, the bank lends out the money which "multiplies" the amount of money. The multiplication of money is created by debt.
This leads to two criticisms of the fractional reserve system: first,since money creation requires loans from the banking system, people are required to go into debt in order for any new money to be created. They assert that this can debase the means of exchange. The second is that while the commercial banking system expands the money supply, it is problematic that banks "create money out of nothing" (actually what is created is debt).
But, the real bottom line is that the current system needs debt to function. If there was no indebtedness, the system would come to a grinding halt.
Wikipedia has a good summary of the Criticism of the fractional-reserve banking system.
But, don't get down on individuals for getting into debt since the system requires debt to function.
Only a systematic shake up of the world economy would change that.
Jim, I posted some vids on the Fractional Reserve banking System for you.
ReplyDeleteIf there were no debts in our monetary system, there would be no money.
Debt is not the real problem, usurious interest rates are the real problem.
ReplyDeleteIT's a bit more complicated than that, Demo.
ReplyDeleteBut, the debt based system combined with high unemployment creates a piss poor combination.