As the clock ticks towards our country's debt deadline, the grip of anxiety, has got it's nasty claws into the average american's mindset.  August 2nd, one week away, makes many wonder, if this scenario will play out until next Tuesday.  The truth of the matter is, debt default is serious business.  While many among us, would rather not think about government, politics or repercussions of a default, the fact of the matter is, a default will affect us all.  

Economists believe, the U.S. defaulting on its loans, would send interest rates sky rocketing, and drive the stock markets down around the globe.  At a delicate time, when recovering revolves so heavily on home loans and banks abilities to administer loans, this would inevitably put a stop to all loans.  

The United States will lose its AAA debt rating if a default occurs.  When a country has a perfect record like AAA, an investor knows positively, that they will receive their payment on their loaned money.  A default, will inevitably put the United States at a vulnerable position, where investors don't want to carry the outstanding loan of our country's bad baggage, due to not knowing if they will get a return on their investment.  This will increase the borrowing cost, which will further increase the debt.  The U.S. treasury securities, are the most widely owned in the world, included in the securities are pension funds, insurance companies and banks.  If the treasuries default, markets across the globe could stop and no longer have the cash or assets to pay out.  Oh yeah, and the face value of our dollar, will take another tank across the globe, which could be the birth of hyper- inflation.  Back in the late 90s, in my own college economics classes, all was blue skies and unicorns, so I had no real reason to spend too many late nights burning the midnight oil for "hyper-inflation".  Now, I wish I would of spent more time in the dusty dark corners of the Non-Fiction aisles in the library, cause this is a big one!  

Hyper-inflation=monetary inflation occurring at a very high rate.

High increase in prices at a rate of 50 % or more a month, on goods and services.

I am no expert, but with stagnant wages, this could be the unneeded push our country doesn't need, over a cliff.  Struggling families could be faced with higher prices for food, gasoline, basic utility services etc., and at a huge rate increase.

Besides the above mentioned, if a default occurs, our government would be faced to make immediate cuts to pay the bills.  If we default and choose to pay creditors first, cuts will have to be made to make the payments.  These cuts could include FBI, Medicare, Social Security, Military pay, USDA Food Inspection etc.  These cuts would lead to mass layoffs, further increasing our high unemployment.  Sadly those living solely by means of Social Security, could find themselves without.

Regardless of which side you are on, one has to realize the devastating effects of defaulting on our loan obligations.  In our personal lives, we know that not making our loan payments, could affect our credit worthiness and ability to pay our bills, for months to come.  The United States has way more to lose, than having a late payment fee applied, for missing their credit card payment.  It's time for the kids to stop playing chicken, and get back in the school house.  Class has begun!

Remember, the best you can do is…..get up, stand up, but please…do something!

Oh Eric.....say it isn't so!!!

Oh Eric………say it isn't so!

Eric Cantor Congress Majority Leader, has been in the midst of debt ceiling negotiations with our president and other members of Congress.  Eric holds the second highest position, and is deputy to Speaker John Boehner.  His latest task in debt negotiations, is to represent his other members, in dealing with a deal of $4 trillion dollar deficit reduction.  The reduction deal talks have included, social security, medicare, medicaid and closing tax loopholes for the wealthy. So far, Republicans seem un-moved on compromise, as they keep their stance of no tax increases.  

As it stands, if our debt ceiling isn't raised by August 2nd, our country will go into default.  No one knows exactly the repercussions of default, but based on our own personal debts, we can assume this could be catastrophic.  Affecting the markets globally, this could make the United States more vulnerable than before, and things could quickly spiral out of control.  So why can't we just get along for the sake of our country's future?  Maybe, if we take a closer look into what driving the debt talks, we can get a clearer picture?

Republicans stand on their firm belief that, increasing taxes will only further burden our businesses, and encourage them to stop doing business in our country. Their main issue being our country is spending out of control on entitlement programs, and until the spending is nipped in its proverbial bud, they won't compromise on the debt negotiation.  Democrats insist on producing new tax revenue from the wealthy, (anyone making over $250,000) and ending tax loopholes for millionaires and billionaires. 

With the debt ceiling fears hanging over the whole country's head, we are hearing of Mr. Cantor, Mr. Boehner and Mitch McConnell, all insisting, they will not budge on their stance of "No New Taxes".  Mr. Cantor even walked out of debt negotiation talks, due to his persistence of the GOP pledge.  Obama, has even laid out the skeleton of medicare and social security for them to lick on, and maybe take a bite at, but so far, no good.  Just when one is left wondering what in the name of all that is good,is going on?There comes a light ahead in the distance.  This light is getting clearer and clearer……..as reported from Huffington Post, Salon, Daily Kos, Politics USA, Wall Street Journal, and many other credible sources, comes a story that could turn your stomach sour.  This is the story of Mr. Eric Cantor, and his bet against the United States of America.  According to news sources, Mr. Cantor bought up to $15,000 in shares of ProShares Trust Ultrashort 20+ Year Treasury ETF~this is to say, he took a short position in long government bonds, or in other words……he is betting on inflation and default.  I remember in history class learning about treason, but I am sure I could use this nibble on a future date.  No, this is not good news, but unfortunately, this is our country's news, so get up, stand up, but please….do something!

Shared Sacrifice

The Fourth of July always reminds me America's great patriotism.  Even as a child I remember watching the fireworks display, and feeling proud of America's great freedom and democracy.  Everyday Americans have given much, for our country to be the greatest to live in.  This is a shared sacrifice among many, for the better good of our great land.  Individuals have come to our great country, in search of the dream, that we call The United States of America.  

From the years of 1892 and 1954, over 12 million people entered our great country through Ellis Island, off the New York Bay.  People came from all over the world, in search of our American dream.  The United States became the great melting pot for cultures and religions.  A country diversified enough to embrace everyone's differences, and mold our country into the great stellar force that it is.  

To protect what we have built for our future generations, our country has had many men and women serve, and unfortunately die, protecting these freedoms of our great land.  Patriotism, is the driving force, to mold individuals, into one.  Our great constitution and patriotism, makes The United States of America, exceptional.  

During World War II, looking back in history, you find that shared sacrifice, for the better good of the country, was everyone's duty.  The government rationed food, gas, clothing etc., to control the supply and demand.  Rationing prevented the wealthy from buying up all the supplies, and then causing shortages and high prices.  Through sacrifice, times were tough, but there was a boom in employment, as everyone had a job to do.  People even planted their own "Victory Gardens", to grow their own fruits and vegetables, to keep costs down.  Few complained, or didn't comply, for everyone knew the men and women serving were the true sacrificers.  

Times may seem grim, currently with our economic status, but sacrifice in our country, has always been a foundation for what makes our country thrive.  Everyone must share in sacrifice, for the greater good of our country.  If paying taxes, and working longer hours to pay off our debts is the only solution, then we all must do our parts for the greater good.  What better way for the big businesses of our great country, to give back to a nation that has made them leading entrepreneurs, than to pay their fair share.  With everyone sharing the same motive, our country can get back on track to being, our great land of liberty.  

Remember, corporations are not people, and get up, stand up, but please do something!

My Grandma Can't Drive Your Porsche

What's happening here in the United States, has been a devastating situation already felt in other countries.  The economies of Iceland, Spain, Ireland, United Kingdom, Singapore and Greece have hit crisis levels recently.  It seems here in the States, we focus all too much on our own problems, while giving little thought to other countries in distress.  Could these countries be leading a precursor of what is to come?

Ireland became the first of many to enter into recession after the Wall Street scandal.  With Ireland's unemployment reported at 14.1% in May of 2011, experts fear for the worst, as the cloud of default hangs over the country's head.  Ireland's bankers, were just as guilty as here at home.  These larger than life banks, received public funded bailouts, after the failures of their lending in the housing scam.  Publicly funded austerity measures, have only led to compounded debts, which more than likely will never get paid back, and will eventually lead to an expected default or defaults.

Although free market lovers try to blame socialism for the decline of Greece, I myself, along with the Greek public, know better.  Greece paid the heavy price for capitalism, with each bank bailout the citizens funded.  In 2008, when the U.S. was funding our own set of bank bailouts, the citizens of Greece were giving their own bailouts to the greedy banking industries.  In a country where 1 out of 3 jobs is government involved, the Greek government wants the people to finance this massive bailout before a default occurs.  Sound familiar?  Similarities in low GDP resound with our country also.  With no way of paying back the ever growing debt, the governments are forced to look inside to find ways of cutting entitlement programs, to just make their minimum payments.  

The stories ring familiar across the globe, as Spain has the highest unemployment rate in the industrialized world at 20%.  This percentage is small in comparison to the young people of Spain, who at  25 and younger, are at 44.3%.  These youths have taken to rioting in the streets in protest of bank bailouts, and repayments on the backs of the working class.  Fears of a "Lehman Brothers style tsunami" of default across the globe, are hitting us here at home.

Talks are on the tables in the United States of debt ceiling.  Both political parties seemed determined to make the average citizens pick up the tabs of the greedy bankers.  I highly doubt my grandmother was playing a death match of poker, against the average joe paying back their high priced mortgages.  Unfortunately now, grandma's Medicare is on the table.  Her and millions of others may be forced to carry the debt of greedy bankers.  This privileged attitude in America, has got people at each other's throats.  Citizens are blaming the defenseless and the poor for the debt, and demanding a government cut, to help slice away at the national debt.  These cuts will do no more than barely make the minimum payment on our credit cards.  Americans should unite together, and realize where these problems originated….The bankers and Wall Street fat cats.  What a great deception they have played, when they can create this crisis, then convince us we have to pay for it too!   When you realize that Apple corporation, is sitting on enough cash in a off shore bank account, that holds enough money to pay Greece's entire debt off, you realize the problem.  

Is this the future we are giving our children?  The every man for himself future?  In a country were we hold religious values so dear, I can hardly imagine taking away entitlement programs represents their beliefs.  If we don't stand United, it is divided we fall.  Remember corporations are not people, and stand up, get up, but please…Do Something!

Our Small Communities Can Survive

Every piece of news I read, always has the best part towards the end of the article; the reader's comments.  People are irritated with the country's state of affairs; unemployment, corporate tax dodging, no new job creation etc.  Every once in a while though, a story from a small town business, will arise from the smoking comments, and sink into my mind, and even make me smile.  These are the stories of survival.  These are our stories of Main Street.

From the corners of the west coast, to the farthest stretch of the east, there are stories of small towns pulling together and getting dirty.  High unemployment and economic hard times, have left Main Streets across the United States empty.  Towns that were unfortunate enough to have had a box store enter their proud communities, have fought back harder.  Luckily enough for our towns, the choices are clearer for consumers; shop local.   Fact: "For every $100 spent at a locally owned business, $68 stays in the community, versus $43 if spent in box stores."~ Civic Economics Study.

Keeping our money circulating in our small towns, will inevitably cause a "trickle down" economics for our community.  Shopping local keeps our neighbors employed, who in turn shop local and keep their neighbors surviving also.  

For every business that would fail = a job or jobs lost =less money in the community.  Local merchants have fully stocked shelves ready to fill your orders, so why go to Wal-Mart?  Wal-Mart and other corporations like them, have started the demise of local Main Streets,  so why give your money back to them?  By our small towns refusing to shop in box stores, this will refresh our Main Streets business and workers, with a flush of revenue, that once went to Sam Walton's heiress.  Seeing the bigger picture is of the utmost importance in times like these.  

Fact:  "A  10% shift in market share from chains to locals could result in : Nearly $140 million in new economic activity, over 1600 new jobs, and provide over $50 million in new wages" ~Civic Economics Study.

Can our small town avoid the darkening cloud hanging over America?  Sure we can!   Fact: If each household simply redirected just $100 of planned holiday spending from chain stores to locally owned merchants, the local economic impact would reach approximately $10 million"~AIBA Economic Impact Case Study. 

We are lucky enough in our small town to have a grocery store, gas station, craft store, hardware store, shopping center, local gym etc.  Citizens can have their appliances fixed here, their cars worked on, along with having their child's birthday cake baked here.  The limitations are few.  I encourage everyone to keep their banking local, and to get out there and get involved.  Join our Chamber of Commerce or our Main Street program, and help plan the activites, that drive in consumers.  

I love living in Prophetstown! .  I couldn't imagine living anywhere else and raising my kids.  I want the success of our small town and our surrounding small towns,  to trump the success of CEOs across the Unites States.  In many ways, I feel like this town is "Mayberry", and we are excluded from the outside world.  Our "Mayberry", that sits in Prophetstown, Illinois, can best be described as "Practically Perfect".

So remember, corporations are not people, and get up, stand up, but please do something.

Get to Know Your Hostile Take Over

Get to know your hostile take over:

You may or may not have heard of billionaires David H. Koch and Charles G. Koch, but I felt pressed to enlighten you.  These brothers, are the owners of the second largest US owned business.  You may have heard of their Georgia Pacific brand; Brawny paper towels, Angel Soft toilet paper, Dixie paper cups, Quilted Northern, many wood and building materials and a wide range of plastics.  They have mostly been in the business of oil, with many of their products derived from petroleum base.  With annual revenues around a $100 billion dollars a year, they can afford to have political influence in our country.  

In 1980, David Koch ran on a Libertarian ticket for Vice-President.  His tactics were too aggressive, as he called for the end of Social Security, federal agencies, welfare, FBI, CIA and public schools.  After his election loss, the brothers continued to stay involved in politics, but this time they had a new approach.  They would buy the kind of country that their business could thrive in.  

Ever sat and wondered about the beginning of the United States "Tea Party"?  Besides spending $12 million dollars for a multitude of Tea Party groups, the Koch brothers have contributed millions of dollars on candidates.  To a tune of $196 million dollars, has been spent by the brothers between lobbying and candidates this past decade.  You may have heard of a couple of their beloved candidates; Scott Walker of Wisconsin, who single handedly is destroying the teacher's union, and Governor Rick Scott of Florida who is pushing the cost of tax cuts for corporations, onto the teachers, correctional officers, state workers and police officers.  Let us not forget Paul Broun Representative in Georgia who referred to jobs lost due to budget cuts across the nation as "there are a lot of government employees that need to go find a real job!".  The Koch brothers have found a way to bend the system to their will of their capitalistic hearts.  They were well aware, their empire would thrive, if the likes of the EPA, FBI and heavy taxations were out of the picture.  Thanks to George Bush Jr., the heavy taxations on corporations and the rich have subsided, but now to deal with those meddling government regulators.  No better way to do it, then to buy your way into our government!

Think back to the summer of 2008.  This summer was known to many, as the beginning of spiking gas prices.  The House passed legislation to oversee the oil speculation, but some Koch paid Senate members, killed the bill.  In 2009 Koch Industries was now considered to be on the same level as multi-national banks, so they were now among the world's top five oil speculators.  (Remember they make plastics-with petroleum base). By 2010, their new founded Tea Parties are full force fighting tooth and nail against reforms of the energy market.  If you are mad about gas prices, consider this….due to oil speculation, the price of a barrel of oil is raised by $27 dollars.  This means we are overpaying by at least a dollar a gallon at the pump, and the conflict of interest Koch Industries' pocketed the difference.  

To a new country we could be heading.  A country were our Universities are reshaping the way they teach us.  At Florida State University, the Koch Brothers have started to reshape the way Americans learn, through their dirty money.  Their $1.5 million dollar donation to the Florida State University, will ensure the economics department is only allowed to hire Koch brothers approved faculty and teach their approved texts.  This could be a new Milton Freedman type learning.  Similar stories are found at Brown University, George Mason University and dozens of other public and private colleges.  This type of learning could eventually eliminate truths in our history books.

Until the people have finally had enough of our "bought and paid for" politicians, the Koch brothers and countless others like them, will continue to reshape our country into their capitalistic utopia.  True campaign finance reform needs to happen in this country to remove the greed factor, and replace it with the patriotic factor.  Big business should not be able to buy their way out of pollution and regulations.  Once the power of campaign contributions is back into the people's hands, this country will thrive.  Remember, corporations are not people, and get up, stand up, but please….do something.

Flashback 1933

                                                   Flashback 1933

(characters names have been changed to protect identity, and similarities, is purely coincidental) 

The year is 1933, a few years into some of the worst times of the United States, The Great Depression.  Originating in the United States, it began with fallen stock prices, and eventually the stock market crash. Spreading across the globe, no country was safe from the astronomical unemployment rates and poverty.

Some short years before the crash, the economy was on a boom, from the widespread of electricity and electrical products, to Ford Motor Company's assembly line for auto production.  These years are when Wall Street got their heads filled with visions of big dollar bills dancing in their heads.  Credit terms eased, and pretty soon, anyone could buy stocks on margin.  Expecting their long-expectant ships to come in, everyday people were borrowing money from a broker, and buying into the market this way, through a type of marginal loan that would be payable immediately if stock prices fell below the loan amount.  

The money seemed such a sure thing, that American companies were buying stock in the market and banks were placing their customer's money in the market without their knowledge.

As a warning sign, on March 25, 1929, the market began to take a small dive.  Panic began to swell up on Wall Street.  Banks made announcements they would continue lending, so everyone breathed a sigh of relief, and continued buying the risky stocks.  On Thursday, October 24, 1929, the stocks began to tank.  Since most people bought their stocks marginally, they would have to immediately pay pay what was owed.  Fearing the worst, bankers reinvested their own money back into the market, and by the end of the day they had sold double their previous record of stocks!  October 29, 1929, this day is notably referred to as Black Tuesday.  This day, even the bankers would be selling.  The panic had caused over 16 million shares of stock to be sold, and collapsing the US economy.

The effects of the crash were felt for years.  In 1933, Senator Carter Glass and Henry S. Steagall drafted a new legislation that would prohibit commercial banks from engaging in investment business.  Nearly 11,000 banks failed, or had to merge, during the Great Depression, due to the risky investments.  The Glass-Steagall Act became a permanent  part of Franklin D. Roosevelt's "New Deal" in 1945, and established the Federal Deposit Insurance Corporation, along with strict banking reforms.  The Act was intended to keep banks from doing business on Wall Street.  Senator Glass believed bank involvement with the stock market was ruining the Federal Reserve and responsible for stock market speculation.  The Glass-Steagall Act, became law in 1933.

Fast forward to the year 1998.  Referred to as Gramm Leach Bliley, this will be known as the repeal of the Glass-Steagall Act.  This new legislation, will allow banks to merge with insurance companies and investment banks, and to take on all the risk they wished.  From Bank of America to JP Morgan, they must of been dancing in the streets, when they realized their lobbyists had pulled this one off!

The new act was drafted and passed by a Republican congress, but signed into legislation by Democratic president Bill Clinton.  

These new mega banks were now free to sell to consumers, all the risky mortgages they could pull off, and thanks to the new act, they could manipulate the structure of investments, to ensure they never have to clean up their own messes.  It's a win-win situation.  To put some extra icing on your garbage cupcake, Robert Rubin was Secretary of Treasury at the time, and had oversight of the Glass-Steagall regulations.  When the act was repealed, he resigned, and days later accepted his new position at Citi Bank, as executive committee member earning $40 million dollars a year.  That icing tasted terrible didn't it?

Looking to point a finger for the housing bubble and foreclosures, look no further than Wall Street and the BIG banking industry (oh and don't forget those people that are supposed to be representing us, but instead are making piles of money of bending our system for their benefit).  So remember, get up, stand up, but most importantly, do something!