We Must Not Repeat the Great Depression

Family Security Matters ^ | 20 September | Dick McDonald

[K-oneTexas]

 We Must Not Repeat the Great Depression

In 1929, men flew out of windows because they lost their highly leveraged bets (you only had to put up 10% to buy stock). In 2008, instead of dead bodies on the pavement we have the “financiers” retreating to the Hamptons to spend their millions. This time, instead of Republicans committing suicide, we have Democrat CEOs fleecing the public and laughing all the way to the bank – cleverly blaming Republicans for the fraud they have perpetrated.

Now enter the 1930s communist adherents to the debate in 2008. It seems like déjà vu all over again. The Democrats under Barack Obama want to raise taxes, raise interest rates, renegotiate trade agreement, eliminate outsourcing, raise tariffs and over-regulate business. Everyone on earth knows those policies are the prescriptions for an extended and massive depression just like the Great One FDR nurtured. The collectivist-inspired Democrats of the 1930s never righted the economic ship. It took a World War to do that. They extended at most a two-year economic downturn into a 12 year nightmare – 1929 to 1941 – and visionless Republicans like Herbert Hoover gave them an assist. We even had RINOs then.

 

Ordinary Americans have been fooled into believing that FDR was a great steward of America’s economic ship when in fact he was a collectivist who believed government was the solution, not the problem. His 91% tax rate on incomes over $50,000 proves how out-of-touch he and the Democrats were. Over the years that marginal tax rate has been lowered under the Republicans to 15% for investment income and capital gains. As a result during the last eight years the country has realized the greatest period of wealth creation ever experienced by any civilization on Earth.

 

Today what these latter-day socialists are peddling is a tax cut for 95% of the people. It amounts to nothing more than chump change. The $1,000 or $2,000 Obama claims he will save ordinary Americans will be gone in a nanosecond on deferred purchases. And while we are at it, did you get the middle-class tax cut the Democrats promised you in 2006? Of course not; and chances are they will be unable to give you one in 2009 either considering a projected $400 billion deficit.

 

In November, if the Democrats win, ordinary Americans will be no closer to the American Dream than they ever were. What ordinary Americans want is that dream – a dream of financial independence not some meaningless tax cut immediately spent on the increased costs of products and services.

 

The American people are not stupid; they just have been duped into believing that letting their Federal government takes 15.3% of their lifetime income in payroll taxes just to have no investment to show for that investment at retirement is somehow the best they can expect from their politicians. This is a tragic mistake for a country operating their economy under capitalism.

 

An average household in America makes more than $50,000 a year and have $7,500 withheld in payroll taxes. In 40 years that $7,500 amounts to an investment in the government of $300,000. If that amount had been invested weekly in the stock market it would have grown at average rates of return for indexed stocks into $4,004,000 nest egg in 40 years and generate a $33,000 a month retirement check. As Social Security now pays $1,400 a month and the taxpayer has no investment, Americans are being taken to the cleaners by those politicians wanting to retain these entitlements.

                                              

There is a way for John McCain and Sarah Palin to deliver the American Dream of financial independence to ordinary Americans. They can privatize Social Security and Medicare and annually invest the $1.4 trillion in payroll taxes in the American economy and let those funds compound into millions for each American taxpayer. That would mean we would scrap the present system and replace it with one that gives Americans the REAL CHANGE they are asking their politicians for – wealth that will enable them to retire affluently and buy the best medical care on the planet and build wealth for future generations.

 

I have written a book How to Make the Poor Rich and America Wealthier that outlines the way ordinary Americans can realize the American Dream. You can get a free copy on line at www.riseupamerica.us . It describes how Rise Up does for the poor and middle-class what “trickle down” has done for the rich.

 

By adopting the Rise Up America plan, America will avoid the tragedy that socialists will inflict on ordinary Americans in November with their deceptive plan to deliver change by draining money from those that fuel the American economy and retaining the entitlements that are draining the treasury each year.

FamilySecurityMatters.org Contributing Editor Dick McDonald is a career financial analyst, accountant and champion of establishing Personal Accounts for American workers in place of the outmoded, inefficient Social Security program. Dick maintains websites at www.dickmcdonald.blogspot.com and http://www.riseupwarrior.com/.

[Old Professer]

The big problem is that after all these years of politicians trying to swing votes with an endless series of media supported sob-stories of the average family living from paycheck to patcheck; the corporations with the aid of these same politicians have been doing the same thing with the national treasury.

The only difference being that the corporations have been engaging in a series of check-kiting type schemes where they shift assets and debts from hand to hand while pocketing the change from each transaction as the combined debt piles up.

Worse, this whole mess has become global in its reach as this week’s rescue of AIG has shown us. The $85 billion lent by the Feds is chump change to the outstanding debt of AIG and barely enough to cover this month’s payroll.

Other governments are reacting to this and are going through the same sort of rapid calls for payment we see in our markets (http://www.usnews.com/articles/business/economy/2008/09/19/a-new-direction-on-wall-street.html); if we’re not headed for a depression, then this has got to be right up there with grandpa betting the farm on a open straight.

[K-oneTexas]

You are right Pubbies and Dems are the problem. Also let's not forget the one Socialist and the one Independent in the Senate either.
Not all Republicans are included there is a small group (House & Senate) that fought and voted against.

[penelopesire]

To view everything thru a ‘bi-partisan’ lens misses the root cause..which goes back to democrat policies. I don’t have time to argue the point with either of you right now. Like i said, there is plenty of info out there and on here about the dem fingers in this whole mess.

Sorry...you cannot divorce this meltdown from ‘politics’..because politics are largely to blame.

[K-oneTexas]

I understand that many need hit between the eyes with a two-by-four to see things clearly. Having learned a lot from my Grandparents, Parents, Aunts and Uncles that lived though it ... I wouldn’t wish it on anyone. I do see and understand your point though.

[itsPatAmerican]

You are doing yourself a disservice to think that every issue is one of us versus the Dems/liberals and that the ones we choose to elect or support are always on the side of good. Naive thinking. I am a conservative not a Republican. Political beliefs are far different than political parties.

[K-oneTexas]

"Political beliefs are far different than political parties."

Well said. Thank you.

[itsPatAmerican]

They have BOTH created a huge pile of mess

You know what my main worry is now, that Al Qaeda will strike while we are still in chaos mode. The loss of life would be horrific, but I also it would send us into a real economic crisis. Our economy relies on confidence, and that would shake it tremendously. I just hope AQ is the disorganized mess they appear to be.

[B4Ranch]

>There’s no way taxpayers are going to agree to privatization without reasonable, but solid, regulations on Wall Street. And they have to know those regulations are being ENFORCED.<

Are you a comedian? Did Bush ask you if it was ok with you to use $283 dollars of your taxes for the bailout? No, he didn’t and he’s not going to give a rats ass what you think next time around either. Quit thinking that you have a voice in these matters and you’ll be more on track with the facts.

[ChiMark]

Real income has been rising during the last 4 years.
Income is not falling and were not entering anything akin to a depression.

Call McCain what you will but he sounded out in the past about the Fannie Mae mess.

Elect an Obama will ruin our country. This is not a lesson we need. We still are reeling from the bad foreign policy
of Carter.

[K-oneTexas]

Two realities we face in this election: Economics/financial as well as National Defense/Terrorism. Yes, this could be a moment those outside have waited for ... rather than complacency maybe disorganization on the part of the gov’t and populace.

[penelopesire]

You are making an assumption about me, that you have no facts to back up!

This is ONE ISSUE...with democrat culpability and graft sticking out on all sides of the cactus.

This needs to be exposed, so that Obama Inc. doesn’t end up ruining this country and many of us intend to make sure that it is!

FRegards.

[An Old Man]

"Historically speaking the Great Depression had about a 25% unemployment rate ... today ours is near 5%. Historically the agricultural base of the country collapsed ... today it has not. "

Not to be picky; but that statement is not quite accurate

1. It took some time from the inception of the crash of 29 until the unemployment reached a peak,

2. We are still in the process of gathering the crops into the barns. We have not sold them and have not paid off the loans to pay for this years production.

It's to early to make statements that predict the outcome of this event.

[itsPatAmerican]

Sorry if I made assumptions, I should not have. This is a complex problem/issue, one that is much more organic than planned. There are many to blame, many to point fingers at. The dems may be the most to blame, but we let's not let ANYONE off the hook based on party affiliation. Personally I think A root cause is the absurdly low interest rates that propped up--and then inflated--the real estate markets after 9/11 when the rest of the economy was in the tank.

This is a complex issue, let's not simplify it with partisan politics.

[Texas_shutterbug]

And he’s going to throw the country to the dems for the next two decades if those rats on wall street are allowed to get away with this with no strings attached.

[Texas_shutterbug]

You do realize that chasing Al Queda is one of the reasons we are in this mess?

Bush dropped the ball on the economy. He's very single minded - like a dog after a bone, I'm afraid.

[penelopesire]

No doubt it is ‘complex’...I am content however to use it in a partisan way to expose and hammer Obama Inc.....LOL

You guys that know the financial markets can discuss the nuances.

No hard feelings..these are passionate and scary times.

Your partisan pal,

Penelope

[Texas_shutterbug]

And for WHOM has real income been rising?

Rising health costs, rising utilities, rising gas bills, rising grocery bills.

There's statistics, and then there's damn statistics. I think we've been damned.

The republicans in Washington are not conservatives.

[B4Ranch]

Hey, Obama agrees with socialism which accepts Marxism. Right? So in other words when you strip all the fur off, he’s a Marxist, a Communist. If roughly 50% of voting America supports Obama then roughly 50% of voting America supports Communism.

Our mass media overwhelmingly supports Obama. That’s obvious to even the deaf and blind. Your neighbors who are Democrats support socialism. There’s a bunch of guys and gals where you work who support it. Ypur kids teachers support and the college professors support it. You want to worry about the national/world economy when half the country is 180 degrees out of line with you AND the Founders of America.

We have got much bigger problems than maintaining a global economy, in my opinion. #1 How much food do you have in YOUR house?

[Texas_shutterbug]

I"m not sure you're answer is really directed at me.

By letting the crooks off on Wall Street with their golden parachutes, we are much more likely to end up with the dems in office for a couple of decades. People are mad.

[MinorityRepublican]

I believe JFK was the last Democrat to actually go through with his campaign promise of tax cuts.