Military, Medicare, Social Security would be the first things the government could cut to put more money into the economy.

Military, Medicare, Social Security would be the first things the government could cut to put more money into the economy.

Social Security is a forced individual retirement, disability and survivor insurance programed funded by contributions from your wages that is approximately doubled for the self-employed or matched by your employer.

Medicare is also funded by deductions from your wages.

Plus, Medicare charges around $100 a month per member for Doctor and Hospital care at 80% of the charges for Doctor and a huge deductible for the hospital.

Medicare Rx insurance varies depending on what you select, but a good aveerage would be $25-$40-$100 per month for standard-better-best.

Many seniors purchase supplemental insurance to cover what Medicare doesn't pay at around $150
per month.

Personally my spouse and I pay around $625.00 per month.

Point being. It aint free, it aint welfare and it aint cheap.

November payrolls fell 533K, the biggest drop in 34 years and much worse than the consensus -335K. And there was a massive net revision of -199K to the previous two months' numbers, thanks largely to overdue downward revisions to the seasonals. This is almost indescribably terrible. In the past six months the US has lost 1.55M jobs, almost as many as were lost in the whole 2001 recession, which included 9/11 and the two months after. The pace of job losses is accelerating alarmingly, as this report attests, with steep drops in most sectors but the biggest deterioration in services.

The government's announcement on Tuesday that the economy grew even faster than expected makes the current "jobless recovery" even more puzzling. To give some perspective, unemployment normally falls significantly in such economic boom times. The last time growth was this good, in 1983, unemployment fell 2.5 percentage points and another full percentage point the next year. That's what happens in a typical recovery. So why not this time? Because we have more to recover from than we've been told.

The reality is that we didn't have a mild recession. Jobs-wise, we had a deep one.

The government reported that annual unemployment during this recession peaked at only around 6 percent, compared with more than 7 percent in 1992 and more than 9 percent in 1982. But the unemployment rate has been low only because government programs, especially Social Security disability, have effectively been buying people off the unemployment rolls and reclassifying them as "not in the labor force."

In other words, the government has cooked the books. It has been a more subtle manipulation than the one during the Reagan administration, when people serving in the military were reclassified from "not in the labor force" to "employed" in order to reduce the unemployment rate. Nonetheless, the impact has been the same

Obama hasn't DONE anything yet.  Those companies were already cooked.

By STEVEN A. HOLMES (New York Times)

Published: September 30, 1999

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

.....

Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market.

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's

''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''

Mr. Wallison gets a seegar for best performance in future forecasts....

Link

Then when Bush tried to rein in the starting to be runaway housing market and the various financial "instruments" in 2003, and McCain again in 2005, Barney jumped in with this.

''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''

Barney did it again as late as last July, claiming the things were okay, "going forward." (I think that qualifies as the "oopps of the century.)

If he was a CEO he would be going to trial for issue false financial information.

Source link plus video.

As for the oil prices, the claim re falling dollar vs EU..... Consider that the dollar fell due to the Feds cutting interest rates trying to pump up the housing market.. All commodities rose in price as people moved out of dollars into metals, oil, wheat, corn, etc..... The housing market bubble bursting was the reason the Fed cut, the falling dollar was the effect...

But this, while hurtful, isn't the total story. In fact, by April prices had stabilized...and things looked better.

So we know what started it, but what was the trip wire that has caused the collapse?

Go back to last April. For the previous six months or so the Fed had been dumping money into the markets to keep them liquid and to stem the foreclosures. And it was working. Things didn't look good, but things looked under control.

Oil prices started the year at around $93.00 and had increased a little bit over $5.00 to $98 at the beginning of April, then $12.00 in April to end at $110 and by the middle of July oil was at $146 and gasoline as $4.00 a gallon.

($5.00 increase in 3 months, $48.00 increase in three and and a half months.)

OPEC oil prices.(link in souce)

Along with increased energy prices, everything that it effects jumped in price. The people who could barely hang on started defaulting and the spiral started.

The dagger that was thrust into America's financial heart is oil pricing.

And remember, it was at that time Pelosi refused to let various bills re drilling come to the floor for a vote.

No, I think that $4/gal gas had nothing to do with any energy bills passed by congress.

Uh, the problem was that there were NO energy bills passed.... or for that matter none were allowed to come to the floor by Nancy P, Queen of Save The Planet!

It is the automakers, or the marketplace, that will be putting people out of work unless the government steps in.

How many of the economic savants, wonks, conultants and NYT/Wall St mouthpieces (in between working themselves into an ecstatic lather over things like Free Trade), saw any of this coming? Not many it seems. And yet, some still have the truely monumental arrogance to expect developing nations to follow our lead and dance to our tune.