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Not in a depression? 1 in 2 Americans are now poor or low income


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2011 Dec 16, 1:49am   23,123 views  101 comments

by Dan8267   ➕follow (4)   💰tip   ignore  

As mentioned in today's links, 1 in 2 Americans are now poor or low income.

Explain to me then, exactly how the Federal Government's efforts to bail out too-big-to-fail banks and prop up housing prices avoided a depression?

50% of the people in our country are below the poverty threshold. Isn't that about the same level as during the First Great Depression?

Nothing the government did avoided a depression. In fact, its actions deepened and prolonged the Second Great Depression. I think we can say definitively, that bailing out the major banks was the wrong thing to do. It destroyed trust and accountability and that prevents future business transactions because all business requires a certain level of trust, and without that trust, no business can be done. Commerce dies.

#housing

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73   HousingWatcher   2011 Dec 19, 3:27am  

Hospitals don't have to treat you if it is not an emergency. IF you have a tumor, then the hospital is not required to operate on you. If you need a transplant, they are not required to perform it.

74   Dan8267   2011 Dec 19, 3:39am  

david1 says

If there were no bailouts and the major banks failed, there would have been chaos and most likely a complete shutdown of society with an overthrow of the government on top.

Cool. Let's test that theory. $500 says that wouldn't have been the case. Hop in your Delorean and stop the bailouts so we can see the result. Short of that, I'd consider any predictions about what would have happened if the too-big-too-fail institutes had been allowed to fail to be conjecture, no matter how many times the conjecture is repeated.

75   david1   2011 Dec 19, 3:41am  

shrekgrinch says

Then that is a pretty fucked up definition. Not having health insurance does not mean you don't have access to health care. Or did they suddenly change the laws forcing hospitals to treat anyone despite inability to pay?
Health insurance and actual health care are two completely different things. But that doesn't stop Libruhls from deliberately confusing them in order to 'sell' their BS.

Stabilize and release does not equal health care in the modern western world. Look up the EMTALA requirements. If you do not have insurance, and you are stable which is defined as able to:
Breathing
Feeding
Mobility
Dressing
Personal hygiene
Toileting
Medicating
Communication
And having no conditions that are immediately life-threatening

You are getting released without further care. Maybe if they changed the name from health care to "stable" care you would get it.

76   Dan8267   2011 Dec 19, 3:41am  

david1 says

Think about it. The top 10 banks has roughly half of total market share. If only the top 10 banks would have failed half of the country would be instantly penniless.

Wrong. FDIC insurance takes care of the deposits. Money doesn't magically disappear. The account holders are not harmed; they simply go to a new bank with their savings intact. The big banks cease to exist, not their depositor's money. No depositor would become penniless.

That's the whole point of FDIC insurance. Protecting depositors does not require protecting huge parasites. Many small banks failed, but their depositors did not lose a penny.

77   david1   2011 Dec 19, 3:43am  

Dan8267 says

Cool. Let's test that theory. $500 says that wouldn't have been the case. Hop in your Delorean and stop the bailouts so we can see the result. Short of that, I'd consider any predictions about what would have happened if the too-big-too-fail institutes had been allowed to fail to be conjecture, no matter how many times the conjecture is repeated.

Go out and watch black Friday behavior for a good case study on what happens in human society when there is a scarcity of resources.

78   Dan8267   2011 Dec 19, 3:43am  

FortWayne says

Those take care of everyone from cradle to grave policies are working out so well.

Works out well when the government shortens the time between the two.

79   MisdemeanorRebel   2011 Dec 19, 3:45am  

shrekgrinch says

hence why the New Deal was a failure but WWII was not.

Whether the New Deal was a failure or not, going from 1.5M unemployed to 13M unemployed was not the fault of Social Security, medicare, food stamps, CRA, HUD, high income taxes on the middle class, or any other shit that didn't exist back then.

Increased military spending wasn't spent until 1940.

Note that the 1937 recession was already on the wane before WW2 broke out. Also, by 1937 the GDP had fully recovered to where it was in the summer before the crash, it's previous high.

And in any case, War is a Government Program.

80   david1   2011 Dec 19, 3:45am  

Dan8267 says

Wrong. FDIC insurance takes care of the deposits. Money doesn't magically disappear. The account holders are not harmed; they simply go to a new bank with their savings intact. The big banks cease to exist, not their depositor's money. No depositor would become penniless.

50% of Savings Deposits is about $3 Trillion. I don't think the FDIC trust has that to make depositors whole. And that's just the savings deposits.

81   Dan8267   2011 Dec 19, 3:50am  

The GOP says

The day that 50% of the people in this country when people are so bad off, that they considers them self "POOR". Poor in the "Peruvian" sense, not in the "Obama needs to get reelected" sense.

The article says that 50% of Americans are poor by the government standards, not by how they feel. I'm sure that more than 50% of the population feels that they are poor.

david1 says

I love this argument. If you have a cell phone you are obviously not poor. Have you seen how much cell phones cost? They are cheap just like every other non-aaple technological innovation in the last ten years. Lets say a cell phone is $50 bucks a month.

Agreed. Mobile phones may have been considered a luxury when they first came out, but today many Africans have mobile phones and hand-powered laptops but not enough food. It's cheaper to give someone a phone than it is to feed him for a month.

82   Dan8267   2011 Dec 19, 4:02am  

david1 says

Go out and watch black Friday behavior for a good case study on what happens in human society when there is a scarcity of resources.

Great example. A scarcity of low-prices XBoxes does lead to Mad Max Beyond the Thunderdome.

83   Dan8267   2011 Dec 19, 4:06am  

shrekgrinch says

WWII was not about hiring men to dig pot holes just so we could hire other men to fill them up again or other Keynesian-based New Deal nonsense. It was a massive government spending program grounded in supply-side economic results and putting millions of previously unemployed men into uniform...

Great, now I don't know which thesis is more ridiculous. Mad Max if we didn't bail out the bankers or Reaganomics getting us out of the last depression.

Economics is the new religion.

84   Dan8267   2011 Dec 19, 4:11am  

david1 says

Personal hygiene

I've worked with many people who are considered mentally stable but have no personal hygiene.

85   Dan8267   2011 Dec 19, 4:14am  

thunderlips11 says

And in any case, War is a Government Program.

Not only is war a government program, but the defense industry is the most massive government jobs program ever.

86   Dan8267   2011 Dec 19, 4:17am  

david1 says

Dan8267 says

Wrong. FDIC insurance takes care of the deposits. Money doesn't magically disappear. The account holders are not harmed; they simply go to a new bank with their savings intact. The big banks cease to exist, not their depositor's money. No depositor would become penniless.

50% of Savings Deposits is about $3 Trillion. I don't think the FDIC trust has that to make depositors whole. And that's just the savings deposits.

$3 trillion is pissing in the ocean.

The Size of the Bank Bailout: $29 Trillion

87   tatupu70   2011 Dec 19, 5:44am  

Dan8267 says

Cool. Let's test that theory. $500 says that wouldn't have been the case. Hop in your Delorean and stop the bailouts so we can see the result. Short of that, I'd consider any predictions about what would have happened if the too-big-too-fail institutes had been allowed to fail to be conjecture, no matter how many times the conjecture is repeated.

Just like saying things would have been hunky dory without the bailout is also conjecture. The point is--if there was a 10% chance of Mad Max, would you have intervened? What about 25% chance? 50% chance? Like you said-this is uncharted waters. Don't you have to err on the side of caution?

88   Dan8267   2011 Dec 19, 5:59am  

tatupu70 says

The point is--if there was a 10% chance of Mad Max, would you have intervened? What about 25% chance? 50% chance

That's the exact same line of reasoning the Bush administration used to justify torture. If there was a 10% chance of Saddam having a nuke...

I didn't buy it from Bush. I'm not buying it from Obama.

What if there is a greater chance that the fraud that occurred during the past decade happens again because they got away with it. I find the moral hazard to be far more probable.

In any case, after the depression is fixed, are we going to prosecute the fraud or break up the too-big-too-fail banks? I doubt it.

89   tatupu70   2011 Dec 19, 8:18am  

Dan8267 says

That's the exact same line of reasoning the Bush administration used to justify torture. If there was a 10% chance of Saddam having a nuke...

That analogy is completely ridiculous.

Dan8267 says

In any case, after the depression is fixed, are we going to prosecute the fraud or break up the too-big-too-fail banks? I doubt it.

That's a different subject, but I agree 100% that we must prosecute the fraud and break up the TBTF banks.

90   Dan8267   2011 Dec 19, 8:43am  

tatupu70 says

Dan8267 says

That's the exact same line of reasoning the Bush administration used to justify torture. If there was a 10% chance of Saddam having a nuke...

That analogy is completely ridiculous.

It's not an analogy. It's the exact same line of reasoning.

91   tatupu70   2011 Dec 19, 8:49am  

Dan8267 says

It's not an analogy. It's the exact same line of reasoning.

So is my buying car insurance the exact same line of reasoning then? There's a 1% chance I may get into a car accident, but the conequences could be very costly so I buy insurance.

92   Dan8267   2011 Dec 19, 8:59am  

tatupu70 says

Dan8267 says

It's not an analogy. It's the exact same line of reasoning.

So is my buying car insurance the exact same line of reasoning then? There's a 1% chance I may get into a car accident, but the conequences could be very costly so I buy insurance.

Does your car have weapons of mass destruction?

93   futuresmc   2011 Dec 19, 9:03am  

FortWayne says

If this helps, a lot of people hide their real income and look a lot more poor to the government. Not everyone, but quite a large number of folks do do that.

Yes, like all those rich people who hide their money offshore so that they don't pay taxes on it.

94   david1   2011 Dec 19, 9:17am  

futuresmc says

Yes, like all those rich people who hide their money offshore so that they don't pay taxes on it.

No, probably more specifically the small business owners that expense every single personal expense they have, like going to lunch or buying school supplies for their kids at Target so their business income at the end of the year is pretty close to $0.

Then they pull up to your house to give you an estimate on your basement remodel in their 2012 GMC Sierra 2500 Denali that stickers for $55,000.

Not rich, just the dishonest bastards that will rail all day and night about Obama and his socialist policies, while they had the best years of their business lives when they got their ARRA funded projects and have never since they opened the doors of the business paid any income taxes.

And even if they didn't cheat (yes I said Cheat) on their taxes Obama STILL hasn't proposed one policy that would actually raise their taxes because their income would have been less that $250,000...

Not that I have anyone in particular in mind or anything....

95   tatupu70   2011 Dec 19, 9:22am  

Dan8267 says

Does your car have weapons of mass destruction?

Do the TBTF banks have WMDs?

96   david1   2011 Dec 19, 9:29am  

Dan8267 says

$3 trillion is pissing in the ocean.

The Size of the Bank Bailout: $29 Trillion

What is your point here? Even if the logic behind this point had any merit whatsoever (Which it does not), honestly, what is the point? Are you saying the Fed would have recapitalized the savings accounts in the event of bank failure?

In bailing out the banks, isnt this, in essence, (and more, as they allowed the largest banks to remain a going concern) what the Fed did in issuing those loans? Didn't they essentially recapitalize the deposit accounts to avoid a further erosion of confidence? Isn't that what the Fed is for, to act as a lender of last resort?

97   Dan8267   2011 Dec 19, 9:59am  

tatupu70 says

Dan8267 says

Does your car have weapons of mass destruction?

Do the TBTF banks have WMDs?

Judging by the state of the economy, yes!

98   Dan8267   2011 Dec 19, 10:02am  

david1 says

What is your point here? Even if the logic behind this point had any merit whatsoever (Which it does not), honestly, what is the point?

Dude, the logic is just arithmetic.

If the federal government can bail out the banks to a tune of $29 trillion, then they could have instead just insured the deposits of $3 trillion.

$29 trillion > $3 trillion

Is that math too hard for you?

99   mdovell   2011 Dec 19, 11:55am  

Here's an example of "trust".
http://content.usatoday.com/communities/driveon/post/2011/03/hyundai-ending-job-loss-assurance-plan-friday/1

Hyundai for awhile ran a program that if you lost your job in a given period of time that you could return the car with no penalty. 350 cars were returned and sales rose significantly

http://www.hyundaiusa.com/about-hyundai/news/Corporate_top_5000,000_sold_history-20101210.aspx

Certainly that takes a pretty big leap to say you'd allow something to be returned if that person lost a job. But they had confidence and it paid off. The trouble is so many businesses say something is a risk but practically EVERYTHING is a risk. Apple 3 bombed but that didn't stop them from making other products, Waterworld tanked at the box office but did well overseas (no puns intended), New Coke didn't put coke out of business, mini disk didn't put sony out of business(or beta for that matter) etc.

Even though the internet makes some aspects of running a business simpler they still have to keep the customer in mind. I tried to help out some businesses in a local area last year. It was like herding cats. There was a computer repair place I could never seen to speak to face to face. Closed weekends..ok fine...closed monday..ok..tuesday?!? ok fine what time do you open on wensday...2:45pm!!? I cannot see anyone going to a repair shop for any item when they are closed for more than half the week.

That also reminds me before Hyundai there was John Deere. Old urban legend has it that during the great depression they didn't repossess a single piece of equipment. Mostly because the farmers needed it to make money so it would be counter intuitive.

That would be a interesting concept with health bills...

100   david1   2011 Dec 19, 8:40pm  

Dan8267 says

david1 says

What is your point here? Even if the logic behind this point had any merit whatsoever (Which it does not), honestly, what is the point?

Dude, the logic is just arithmetic.

If the federal government can bail out the banks to a tune of $29 trillion, then they could have instead just insured the deposits of $3 trillion.

$29 trillion > $3 trillion

Is that math too hard for you?

If you want to hold on to the flimsy point that the "cost" of the bailouts was $29 trillion, this is going to be easy.

The "cost" of the bank bailouts was zero, because all of those loans the Fed made were paid back, but let's stay on point here.

The Fed loaned $29 trillion to the banks to do many things, one of which was to protect the depositors.

Answer me this: Would you rather loan someone $3,000, of which you would get very little if any back, or loan a total of $29,000 of which you would get every penny back? By the way, when you make that loan the most you will have lent out at any one time is $1,700.

It is foolish at best and dishonest at worst to call the "cost" of the Fed bank bailouts $29 trillion when it was all paid back. The only "banks" that are not paying the government back are Fannie and Freddie, which were taken over by the Government. If other banks failed, they would have been taken over by the FDIC as well. Get it? Taken over to protect depositors = not getting paid back. Loaning to protect depositors with collateral to solve a liquidity crisis but not taking over = get paid back.

Either way, the depositors are protected. One way the cost is zero. The other, the cost is at least $3 trillion. Probably more like $6 Trillion, counting other non-savings accounts.

101   Dan8267   2011 Dec 20, 3:01am  

david1 says

If you want to hold on to the flimsy point that the "cost" of the bailouts was $29 trillion, this is going to be easy.

Feel free to inform CNBC why their wrong. I'll take their facts over yours because they have a much larger and more experienced research team than you.

david1 says

The "cost" of the bank bailouts was zero, because all of those loans the Fed made were paid back, but let's stay on point here.

And I should believe your assertion, why? Oh sure, the zero-interest loans of a few hundred billion were paid back, but not the whole $27 trillion. Furthermore, by allowing the banks to take these zero-interest loans and then loan the money back to our government for 5%, the banks have stolen our money as explained in the following video.

http://www.youtube.com/embed/HXNBlb0vsdM

And what did we get out of it? The next video explains...

http://www.youtube.com/embed/yipV_pK6HXw

What you don't get is that all Americans are paying the banks in terms of lost purchasing power so that the banks don't lose money on their bad bets.

So keep believing that protecting massive banks and letting them crush small banks is they way to make America strong. One day, there will be only one bank, and it will answer to no one. Are you looking forward to that day?

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