planet earth looks blue

The leaders of the G20 summit met in London, and came to some sort of agreement that is going to save the world.  A $1.1 trillion dollar stimulus package, tighter banking regulations, oversight on tax loopholes, and an international economic demise warning agency.  This was all accomplished within just a few hours.  The meeting did lend confidence to markets worldwide, and it is a positive move against protectionism and isolationism, but what purpose did it really serve?  World leaders seem to act as a one-trick pony.  Print more money, poor it into financial institutions, and discuss vague blanket regulations, that in the end will be nearly impossible to pass and enforce.  There is no international legislative body that can pass financial laws.  These twenty leaders are not financial experts, they are not ethical experts, and they certainly are not in touch with the people.  They are political figure heads, posing for a historic photograph and then dining together on a meal fit for a queen.

Meanwhile, the four horseman of the apocalypse ( war, climate chaos, financial crimes, and homelessness) were marching with protesters outside on Wednesday.  Smashing windows and clashing with police outside, they were a force of negativity, the necessary equal and opposite force to the calm chinking of wine glasses as leaders dined and exchanged pleasantries within.  Many were arrested, anywhere from 30 to 90, and one man was found dead, reasons still unknown.  Their chaos represents the frustration that people are feeling across the world.  Having a meeting is just not enough.  The reality we are in today has taken decades to develop, and will take a much more serious commitment to heal.  Any positive move is a step in the right direction.  But a ‘pretend’ positive move, only sends us all ten steps backward.

 President Obama met with Republicans today to discuss the planned $825 billion economic stimulus package.  The House votes on the bill today.  Although they were urged to vote against the proposal by John Boehner, Republican Representative from Ohio, the majority of the GOP members left, if not convinced, at least with a lighter bounce in their step after talking with the new President, hailing him for his openness and honesty.  

The bill has been widely criticized by Republicans as well as by some media for a specific $200 million that they are ideologically opposed to. The money is set for family planning for lower income families.  In the whole scheme of $825 billion, this tiny sliver doesn’t really amount to much, and if that’s all they have to disagree with, why not just take it out?  

Other than that, it is the socialist principal of pouring all of this money into the masses.   A lot of the funding will help the lower and middle classes, and the $275 billion in tax cuts is directed towards those who could actually use the $500/person.  Although Republicans complain that it is irresponsible to increase our huge deficit, pointing out that even the interest we will pay on the stimulus over the next decade will amount to another $300 billion, they are asking for making the Bush tax cuts permanent.  Doesn’t 2-2=0?  Or am I missing something here?  If they want to be fiscally responsible, then the Bush tax cuts, which focused on keeping more money in the pockets of the upper classes, have to go.  As they themselves point out - the top 5% contribute around 85% of the total tax revenue.  Simple math will tell you that we can’t afford to lower taxes for the rich.  And simple reality will tell you that some people are struggling to keep their homes and pay for health care for their children, with many unable to afford it for themselves.  Many people are hungry.  Many people can’t swing the increase in energy prices.  But those who can more than afford it, they don’t have to be compassionate or concerned, but they don’t deserve more.  The past eight years and additional $5 trillion dollars added to the deficit has taught us that.  

Yes, people have already forgotten that is was the former President that managed a near equal stimulus package just a few weeks ago.  Somehow that one was more acceptable to the politicians, although the public never saw where exactly the money went, until we hear the media reports of banks spending millions to redecorate or purchase company jets, while still laying off workers.  This one however, is posted online.  I would recommend READING IT YOURSELF.  All the suggested expenses are broken down so we can all see where the money is going.   And I for one want to know what people think about this huge decision, it’s certainly not an easy one to make.  

Today was a big day for the billions floating around, waiting patiently to be poured into the American economy.  Congress allowed the remaining half of the $700 billion Troubled Asset Relief Fund to be released.  It will be used just as the first $350 billion was - to open up the credit market, the main pumping organ of the economy.  Apparently it didn’t work the first time, but the theory is still correct, so they’re trying it again.  Only this time the focus will be more on buying up troubled assets and helping people from falling down the slippery slope of foreclosure.  

Also the House Democrats brought out their proposal for a second relief fund.  This time, with $850 billion, the money would be pushed through various channels, with the motive of keeping money flowing in the areas where it has almost completely stopped. $275 billion would go towards tax cuts for businesses and individuals.  Huge chunks would go to medicaid, to education, to building infrastructure, and to the investment of renewable sources of energy, all the while creating work.  Obama’s most optimistic predictions are 3 to 4 millions jobs.  Economists are predicting a hike in unemployment to just under 9% sometime this year.  

As long as we can continue pumping money into the economy we can keep the whole body alive, but when there are no more pills left in the bottle, we’re on the way to clogged arteries, chest pains, and a massive heart attack.  To solve a problem as huge as this one, we need to find out what created it in the first place, and stop doing it.  I mean approaching the financial crisis from a more holistic angle - stop consuming so much junk, stop getting into the debt/stress cycle, start exercising all of our abilities as humans and as corporations, instead of popping a pill and hoping all out problems will disappear.  We as human beings are capable of so much, of innovating, of building, of solving problems.  But if we fail to acknowledge this, and go back to our old routines, what’s to stop the same crisis from happening again?  

2009-01-15 

The deficit for 2008 is going to break $1.2 trillion.  That’s not just a tip off the ice-burg, that is an ice-burg.  The Bush Administration is dumping it into our already overflowing sea of debt, which today is $10,641,795,079,237.35.  A number so huge that the debt marker in New York City didn’t even have a place holder for the new digit, the 1 now being shared with the dollar sign.  

Breaking it all down, the deficit is the difference between the amount spent and the amount earned.  The national debt is the accumulation of the annual deficit.  Let’s not forget there is a such thing as a surplus.  If we can remember back as far as the Clinton years, we were actually accumulating national surpluses.  Despite what it feels like now, we haven’t always been on this shrieking car ride to the bottom.  But today the brake pads are worn down so much that it is literally metal scraping on metal.  Trying to slow the momentum down seems almost impossible considering the fact that we spend more on interest than we do on the Iraq War.  And with another economic stimulus package in the works when Obama takes office, well, that is how we have the behemoth deficit this year in the first place.  

Who are we in debt to?  Well, mostly the Federal Reserve and various government accounts.  And a large portion is owed to foreign governments and banks, with the three most generous lenders being China, Japan, and the United Kingdom.  But the list is a long one, including Thailand, Mexico, Russia, and India.  

Its hard not to blame the Bush administration for getting us into the current mess.  Their decisions added just under $5 trillion dollars to the debt.  That means in the history of our country, during the past eight years we accumulated a little less than half of our total debt.  Tax cuts for the rich, payouts to wall street and the banking system, two endless wars have all contributed to these absurd numbers.  Medicare and Social Security are bankrupt.  There isn’t any money for future generations, just drawers full of IOU’s for our children’s children to pay off.  

Makes you wonder how much longer we can play this game?  How long before America’s credit runs out?  

2009-01-07