Preparing for the next collapse

[one...two...tree 2,762]

Does it really matter what got us here? Regulation, deregulation, shmeregulation.

True, Social Security isn't what got us here, but the surplus in that account

has been spent - poof, gone.

We are f*cked, I hope you understand that, Steven.

Ignoring what got us here is part of the problem.

Over the next five years, about $1.4 trillion in commercial real estate loans will reach the end of their terms and require new financing. Nearly half are "underwater," meaning the borrower owes more than the property is worth. Commercial property values have fallen more than 40 percent nationally since their 2007 peak. Vacancy rates are up and rents are down, further driving down the value of these properties.

When the reckoning comes, it could threaten everyone from banks and pension funds to renters and small businesses -- and small banks could be particularly vulnerable.

Warren warned against government inaction.

"When commercial properties fail, the result is a downward spiral of economic contraction; job losses; deteriorating store fronts, office buildings and apartments; and the failure of the banks serving those communities," she said. "These are the same small banks that provide loans to the small businesses that create jobs and boost productivity. If hundreds more community banks go under the effect could be to dump sand in the gears of our economic recovery.

http://www.huffingtonpost.com/2010/02/11/commercial-real-estate-wa_n_458092.html

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Read this, there are some lessons to be learned here.

Please point me to a source that isn't flagged by Websense. Thanks. The .edu domain would be perfect.

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Ignoring what got us here is part of the problem.

If the premise is correct (that collapse is inevitable) then it doesn't really matter (anymore) how we got here. If you disagree, tell me why it does (assuming the premise is correct).

[one...two...tree 2,762]

If the premise is correct (that collapse is inevitable) then it doesn't really matter (anymore) how we got here. If you disagree, tell me why it does (assuming the premise is correct).

Government intervention can either prevent it or at least soften the fall. Reforms in regulations, especially in the real estate market, will prevent future bubbles like the one we had from devastating the economy.

Edited February 28, 2011 by 8TBVBN

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Government intervention can either prevent it or at least soften the fall. Reforms in regulations, especially in the real estate market, will prevent future bubbles like the one we had from devastating the economy.

You're not assuming the premise.

[Mr. Big Dog 10,747]

Social Security and Medicare are a part of the problem because they have failed since their inception for the intent in which they were supposed to be. The money was never intended to be used in the general fund, however that's exactly where it has been and continues to be....

Nonsense. Excess Social Security funds necessarily end up in the general fund. There is, by law, only one investment that Social Security funds can invest in: US Treasuries. So, if excess Social Security funds must be invested in treasuries which are, of course, issued to fund government, then any excess funds Social Security takes in - by design - funds government.

What we're looking at now is the situation where the investor (Social Security) doesn't have as much excess to invest and actually needs to take out some of its past investment each year to pay benefits. The US government owes the American people some 2.6 trillion dollars in Social Security investments. These 2.6 trillion dollars are due to be received back over the next 25 or so years - that's roughly $100 billion dollars annually. Of course, Social Security also ceases to be contributor to government funding since there are no or very low excesses in the forecast for the years to come.

The question then is, how does that get addressed? Does Social Security not get paid back for the loans it made to the US government? Will the US government go down the path where we honor the obligations to private investors both home and abroad as well as public investors abroad but tell the American public to shove it?

It's not the first time, remember, that Social Security needed adjustments to stay afloat. The last President that was faced with this issue and actually had the guts to do what what was not only necessary but also what was right to save the system was the Gipper. He raised taxes and reduced some benefits to leave the system solvent for decades to come. With the right being so hung up on Reagan's legacy, it's painful how they forget that Reagan was committed to Social Security - not only verbally but with very specific actions to make that point.

Here's a good read on the issue:

Time to live up to Reagan's Social Security deal

Before the confetti from Ronald Reagan's 100th birthday is entirely swept away, we might pause to remember one of his signature achievements -- back when Democrats and Republicans actually spoke to each other.

It was in some ways a less entertaining time, but some things actually got done.

One of them, in 1982, was a bipartisan overhaul of the finances of Social Security. A commission headed by Sen. Daniel Patrick Moynihan, D-N.Y., and Alan Greenspan, later the Oracle of the Federal Reserve, reduced some benefits and considerably increased Social Security taxes. Reagan and Democratic House Speaker Tip O'Neill signed off on the deal.

As a result, for 30 years, Social Security piled up considerable surpluses -- surpluses that were supposed to be there for the system when the Baby Boomers started to retire and begin decades of looking for their old Beatles records. Since by law Social Security can invest its surplus only in Treasury notes, it now holds $2.6 trillion in U.S. bonds -- leaving it in position to make full payments until 2037.‡

Hardly any other entity in the world, public or private, can call itself a multitrillionaire. That's why John Burbank, executive director of the Economic Opportunity Institute in Seattle, calls Social Security "the best-funded program in the federal government."

Still, in the midst of our current budget crisis, Social Security has just gotten thrown in with its bankrupt bureaucratic brothers. Last weekend on CNN, former Wyoming Sen. Alan Simpson, co-chairman of President Barack Obama's budget commission, explained that his critics were "jerks" and declared, "So I'm waiting for the politician to get up and say, there's only one way to do this, you dig into the big four: Medicare, Medicaid, Social Security and defense."

But as the television show that featured the original Oscar the Grouch used to explain, one of these things is not like the other.

One of these things has the moral and legal commitment of the U.S. government for $2.6 trillion.

There is a suggestion out there that because the $2.6 trillion is not piled up in gold bars somewhere, but is only a file of U.S. government IOUs, that it doesn't actually exist. Since the Social Security shortfall, like the Medicare shortfall, actually has to come out of the general fund, critics claim the situations are the same, and urge that Social Security's retirement ages should be jacked up until the books balance.

But if all those T-notes in the Social Security trust fund are just pieces of paper, we'd better keep that news from the other people holding them.

"If we pay off China for its purchase of Treasury bonds," notes Burbank, "we should pay off the American people for their purchase of Treasury bonds."

The Social Security surpluses were used to help pay off years of federal deficits. When the prospect of federal surpluses first appeared, Bill Clinton urged, in his 1998 State of the Union speech, that the money be used to "save Social Security first." Running for president in 2000, Al Gore wanted the Social Security surpluses put in a "lockbox," an idea that struck people as so hilarious it became a punchline.

Instead, hundreds of billions of dollars of Social Security taxes -- a flat tax that the government stops collecting above certain incomes -- were used to help balance three major George W. Bush tax cuts. As Harry J. Holzer, public policy professor at Georgetown University, put it seven years ago, "Thus the Social Security surplus -- financed by payroll tax increases on the lower and middle classes -- has been used to fund income tax cuts that overwhelmingly benefit high-income people."

And to use that reality to raise retirement ages for waitresses and security guards would be grotesque.

Retirement is now a considerably different reality than when Reagan and O'Neill shook hands on the Social Security fix in 1982. Private pensions have withered, and savings and personal retirement accounts have melted away like the Greenland ice cap. To postpone Social Security would just stretch more barbed wire across the path to retirement.

Americans keep telling pollsters they'd prefer other approaches, such as raising the income level of the Social Security tax, which would at least get to the people who most benefited from the tax cuts.

And we could at least make it clear that when the federal government owes money to Americans, that's an actual obligation.

After all, that was the deal Ronald Reagan made.

[one...two...tree 2,762]

You're not assuming the premise.

Even if nothing can be done immediately, which I disagree, government intervention can soften the impact. As to whether such intervention is possible under the current political climate in Washington, I think it's possible.

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Even if nothing can be done immediately, which I disagree, government intervention can soften the impact. As to whether such intervention is possible under the current political climate in Washington, I think it's possible.

Actually, assuming the premise is correct (I'm not convinced of that and apparently neither are you), there's nothing 'the government' can do because at the other end of this we'll end up with a new government. America Part II, if you will. The Second Republic.

[one...two...tree 2,762]

Actually, assuming the premise is correct (I'm not convinced of that and apparently neither are you), there's nothing 'the government' can do because at the other end of this we'll end up with a new government. America Part II, if you will. The Second Republic.

...or broken up into small, independent states. If I were in the northeastern part of nation, I'd be sweet talking Canada into letting us join them.

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...or broken up into small, independent states.

That would not be a terrible outcome, IMO.

Join Canada? Why? The American NE, Texas, California, etc. will all do just fine on their own.

[one...two...tree 2,762]

That would not be a terrible outcome, IMO.

Join Canada? Why? The American NE, Texas, California, etc. will all do just fine on their own.

Who gets the Statue of Liberty?

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Who gets the Statue of Liberty?

New York and New Jersey.

DC can have that s h i t h o l e we call the White House.

[one...two...tree 2,762]

New York and New Jersey.

DC can have that s h i t h o l e we call the White House.

It'd make a great party house.

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It'd make a great party house.

I betcha not one of the neighboring states is gonna want DC. The White House may turn into a homeless shelter.

[lostinblue 1,989]

As usual your response is " I am from the govermnent and I am here to help." The government will not rescue main street. The internet is causing the death of the stores. Wallmart is building smaller stores for this reason . Case in point ...Step son wanted a camera. We went online and we ordered it cheaper from wallmart than it was for sale at the stores. A week later we just walked in the store and picked it up. There is no need for that massive retail space. Your younger generation will rapidly shop this way. This is the future of retail. So say good by to all your union construction jobs. City after city has dead retail space that will never be used again.At least not for stores. Maybe if it is cheap enough you can adapt them. Maybe homeless shelters or some other feel good government project that is the flavor of the year.

Danno If a person understands that the government will not help you (unless you are willing to give something up)Then they are on the way of being prepared for what is upon us.

http://apps.leg.wa.gov/billinfo/summary.aspx?bill=1716&year=2011

Read this and weep. Your government will help you all right. In a nut shell.....

Introduced by Rep. Katrina Asay, (R - Milton) ® on January 31, 2011, clarifies current law to include transient buyers of precious metals in the definition of second-hand dealers regulated along with pawn brokers. This act requires that any secondhand dealers obtain a business license from local authorities. This act requires pawnbrokers and secondhand dealers that buy or loan money for precious metals to display reporting requirements of each transaction, including identification requirements and specific information about the customer and the goods being exchanged. The documentation required by this act must be made available for inspection during all hours of business operation. This act also requires that precious metals be held at the place of business of pawnbrokers or secondhand dealers for forty-five days before any disposition of the property. Finally, this act makes it a felony to violate any of the requirements set out in this act.

Referred to the House Business & Financial Services Committee on January 31, 2011.

Referred to the House Public Safety & Emergency Preparedness Committee on February 1, 2011.

Substitute offered in the House on February 16, 2011, creates a new category of secondhand dealers called "secondhand precious metal dealers." New, separate, and distinct provisions relating to the regulation of secondhand precious metal dealers are created separate and distinct from pawnbrokers and other secondhand dealers.

Referred to the House Rules Committee on February 17, 2011.

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1) Re: 2011 House Bill 1716 (Regulating secondhand dealers who deal with precious metal property) [by M_DragonKnight on January 31, 2011]

First, when was the last time you heard of a shopkeeper doing felony time for not displaying proper signage? It is a standard warning.

http://www.washingtonvotes.org/2011-HB-1716

http://www.bullionstacker.com/viewtopic.php?f=3&t=3313

Prepare To Give Up All Private Data For Any Gold Purchase Over $100

By Tyler Durden

Created 02/18/2011 - 20:59

A week ago, when we reported [1]on a move by the Dutch central bank that ordered a pension fund to forcibly reduce its gold holdings, we speculated that "this latest gold confiscation equivalent event is most certainly coming to a banana republic near you." And while we got the Banana republic right, the event that we are about to describe is not necessarily identical. It is much worse. A bill proposed in the State of Washington (House Bill 1716), by representatives Asay, Hurst, Klippert, Pearson, and Miloscia, whose alleged purpose is to regulate secondhand gold dealers, seeks to capture "the name, date of birth, sex, height, weight, race, and address and telephone number of the person with whom the transaction is made" or said otherwise, of every purchaser of gold in the state of Washington. Furthermore, if passed, Bill 1716 will record "a complete description of the property pledged, bought, or consigned, including the brand name, serial number, model number or name, any initials or engraving, size, pattern, and color or stone or stones" and of course price. But the kicker: if a transaction is mode for an amount over $100, which means one tenth of an ounce of golds, also required will be a "signature, photo, and fingerprint of the person with whom the transaction is made." In other words, very soon Washington state will know more about you than you know about yourself, if you dare to buy any gold object worth more than a C-note. How this proposal is supposed to protect consumers against vulture gold dealers we don't quite get. Hopefully someone will explain it to us. We do, however, get how Americans will part with any and all privacy if they were to exchange fiat for physical. And in a police state like America, this will likely not be taken lightly, thereby killing the gold trade should the proposed Bill pass, and be adopted elsewhere.

While we are confident that representatives Asay, Hurst, Klippert, Pearson, and Miloscia have no clue why they are even proposing this bill, we would also be delighted to find out which moneyed interests they represent, and what happens to precious metal trading in America should Bill 1716 become a legal precedent which is effectively the first step before the final implementation of Executive Order 6102 version 2.

Welcome to your new world order. Can a fed bill be far behind?