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Originally Posted by TheGame
I accept the numbers, but I also understand that the country is going deeper and deeper into debt.. even before the bailouts were taken into consideration. Since taxes are continuiously lowered, the only conclusions I can come to is either 1) The economy how it is now, and how it was, simply does not work. There's no escaping the end fate of everything crashing down regardless of what we do. Capatilism fails. Or 2) The government over time has been using the wrong strategy when it comes to generating revenue, which for at least the last 30+ years, the main strategy has been tax cuts.
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I'm afraid neither of those conclusions are very accurate. To the first, the basics of our economy and capitalism work very well. For example, look at our wealth creation over the course of our country's brief history: it has been the greatest and the fastest the world has ever known. To the second, again, as I have said before, the problem is government spending above and beyond revenue intake. The problem is not the amount of revenue intake, the problem is excess spending.
The two main causes of the financial collapse were: excessive toxic loans (which destroy a bank's balance sheet) and over reliance on outdated risk management software.
The main cause of our enormous debt is excessive spending.
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The thing that disturbs me about the bailout packages, in a system that's supposed to be capitalism, is that in order for it to work properly the companies need to have the countrie's best interest at heart and not just their own. Which I don't think they have, and the government is giving them little incentive to do so.
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Not really... in order for the current bailout system to work, the banks must raise their value back up to where the government purchased them (as the government purchased the banks at a premium) or above. So the banks simply need to do what any company is meant to do: return profits to shareholders (in this case, the government).