How is the economic crisis effecting you?

[Tzipi Livni]

makes me sick to my stomach. the unknown is scary when you hear you may be out on the street and no income to eat. that makes anybody sick.

[8***L]

More people not paying for our products and we are forced to lock-off their service.

On the positive side - "things" in general are cheaper - my toys.
People are selling their toys at discounts for the money.

The government is the problem but not the solution.

Gee, if I had a big tax cut this year - guess what! I'd have more money to spend on toys, thus stimulating the economy!

[8***L]

The crisis hasn't affected me that much as far as money is concerned, but it has really made me weary of the politicians we elect to high-powered positions. It seems that no matter who we elect, things just keep going on a downward spiral.

I think some of the solutions would be to:

1. Get rid of the Federal Reserve and income tax
2. Start doing research on the people we choose for public office. Our votes are paramount to this country's success.
3. Stop sending money to foreign countries until we get ourselves back on our feet.

[sklinkaware]

The major cause of the current economic situation was 'cheap' money due to the Federal Reserve keeping interest rates artificially low since the mid eighties.
This coupled with government regulations put in place in the late seventies and updated in the 90's basically encouraging if not out right forcing financial institutions to loan money for mortgages to more risky individuals. Add to this in the nineties regulations were changed to allow the packaging of these in securities and marketing these risky investment to investors. Specifically exempting these transactions for existing gambling laws show that they were known to be risky and a 'gamble'.

Unfortunately the is now easy answer to what will get us 'out of this'. The question is do we just want to 'right' our economy, or do we want to fix the underlying issues involved.

The current proposed 'stimulus' will moderate job losses short term, but is going to to cause major long term issues, The dollar will be greatly devalued, inflation will increase dramatically, and more jobs will be lost than were saved short term.
Compounding the problems is the current massive federal debt ( nearly $10 trillion) that these proposals will only add to.(another $3trillion minimum over the next two years) At some point just the interest payments on the debt will become untenable.
And we cannot forget about the looming social security insolvency. In 2007 in was estimated that an immediate reduction in benefits by half and a tripling of the payroll taxes( currently 12.65%) would be needed to meet current obligations. Think for a minute on that, that would be nearly 40% right of the top on your pay check, BEFORE any state or federal income tax.

So to address just our current federal commitments both payroll and income taxes would probably be near 70% add to that any state taxes and nearly 80 cents of every dollar earned will be taken and spent by government. Remembering the increased cost of goods and services due to inflation and the devaluation of the dollar we are facing conditions that will make the depression of the thirties look like boom times.

The most viable long term solution would be to 'bit the bullet' now while we still have some flexibility. Yes, it will be very 'painful' in the short term, but the long term prospects will be immensely better. The first order of business would be to eliminate the Federal Reserve. Second would be to reduce the size of federal government and focus only on the things that it should do as spelled out in the Constitution, national defense, regulating interstate commerce, negotiating international treaties. Allow the state governments to do the thing they are suppose to do, again as per the Constitution.
Focus on paying down the debt before any discretionary spending, insure balanced budgets. Rectify election finance laws and get the money influences out of elections. ( this can be done, but will never happen because the current political parties control the system and would lose the most, the power and influence they currently 'enjoy') Restrict to the extreme if not eliminate lobbyists all together.

As for how I have been affected, I was fortunate enough to 'see' major issues coming and moved my investments into cash and equivalents. They have gained 2% since then, but most others have lost 40% or more. I am currently evaluating foreign currencies to avoid the impending collapse of the dollar. My current employment is steady and do not foresee any issues going forward. My work actually increases in poor economic conditions, but if it gets bad enough, no one will be secure. The biggest issue will be in the decline of the value of the mony earned, it will not buy what it used to.

[RtV]

Financially I'm doing extremely well. From flipping homes last year to cost averaging my stocks and fattening my portfolio. Of course I can read and understand the contracts I sign and don't depend on the government to bail me out so I guess I'm not a good example for you to use.

[skinner]

not really