The Road To U.S. Economic Recovery: Who Will Help And Who Will Hinder?
The "Subprime Crisis" was like a large dirty nuclear bomb going off with fallout all over the world. Below is an excellent overview of where this is coming from:
The Federal Reserve and various central banks of the world have tried to contain this contamination through lower interest rates and currency injections, but the damage has been done to many major banks and financial institutions.
Perhaps, the biggest damage has been the "doom and gloom atmosphere" that has spread from former U.S. homeowners to billion dollar investors in every corner of the Globe.
It boogles the mind that this "subprime mess/bubble" was developing long before 2007/2008 without a word from U.S. and G8 leaders. "Non Bank Paper"(i.e. subprime mortgages, credit card debt and card loans) were bundled together as "highly rated securities" and sold to banks.
Where were the political and financial leaders when this "junk paper" was being sold by the billions?
Any political or financial CEO in the West has to have a good grasp on what could go wrong with the global economy. It's obvious that more than bandaid solutions are necessary to get the U.S. and the world out of this financial mess.
Here are some suggestions:
- There's no reason why subprime mortgage financing should exist at all. Canada has done well without it.
- High risk securities should be properly rated and regulated so that buyers know what they're getting into.
- Mortgages sellers should inform their customers of all costs relating to their mortgages.
- Citizens of the U.S. should be encouraged to save money in high interest bank accounts which are not taxed. This is now done in Canada.
- The U.S. Government should promote a house as a long term investment rather than as a line of credit or a way to make a quick buck in "a house flip". Pride of ownership would be the theme.
- Children at school should learn as early as possible the ABCs of investing, saving and credit before they make use of them.
- The candidates in the U.S. election should be challenged to come up with a better plan for a U.S. economic recovery.
Posted by qualteam
at 2:03 PM EDT
Updated: Tuesday, 11 March 2008 4:26 PM EDT