From The Ramparts

Signs Point To Deeper Economic Problems

Signs Point To Deeper Economic Problems

“Bankruptcy filings are on the rise. Chapter 7 filings were up 54% in the 2nd quarter versus the 1st quarter. Thus filings are running 2,300 per business day, more than 4 times the level of November 2005, after the bankruptcy law went into effect. In the 3-months ended June, 85,449 Chapter 7 cases were filed and 142,815 cases overall, a 39% increase from the previous quarter. Chapter 13’s rose 21.3%. Even with much more difficult criteria the bankruptcy juggernaut was just stalled, not cured by the new law. Credit counselors say filers have to undergo counseling before they can proceed with their cases, and the sessions comprise 1/3rd to ½ of their caseloads, plus the attendees cannot pay for the counseling and so the services lose money. As we predicted, consumers are being unduly punished and nothing happens to the irresponsible lenders. So what else is new? Credit counselors are reporting an increase in the number of debtors seeking help because of high gasoline prices and adjustable rate mortgages that have been reset at higher rates. Those debtors may well enter the bankruptcy pipeline in the next year or so. The new higher fees will keep people who have nothing from filing. It costs $2,000 to file for Chapter 7 and $4,000 to file for Chapter 11. Experts say filings will eventually return to 90% of the old rate.” Robert Chapman http://www.theinternationalforecaster.com/trainwreck.

AmeriKKKa is in deep do do. The government is broke, forced to borrow two billion dollars a day to survive and much of that goes to fund the imperialist occupations of Afghanistan, Iraq and other bases of occupation around the world. On the personal but collective microeconomic level, home foreclosures and bankruptcies are on the rise, more and more average AmeriKKKans, home owners and businessperson are drowning in a sea of debt. The new bankruptcy law that went into effect in October 2005 was written by the credit card companies and banks was designed to stem the rising tide of people seeking bankruptcy relief from their debt problems. AmeriKKKans, like their government, are way over our heads in debt. But unlike the government, Joe and Jane Sixpack cannot run up credit card or mortgage refinancing debt and depend on foreign banks and investors to bail us out (at a profit) to keep our disastrous consumption addiction going.
George Bu$h and his NeoCon cabal with the support of the corporate mind control apparatus and a compliant Congress, passed huge tax cuts and fiscally irresponsible spending programs, the same type of tax cuts Bu$h’s father called “Voodoo Economics” when he ran against Ronald Reagan during the presidential primaries in 1980. Reagan and Bu$h eventually went on to team up to usher in the “Reagan Conservative Revolution” which was neither conservative nor a revolution. The “trickle down effect” Reagan promised would result from his outlandish fiscal policies never materialized. To be sure the Reagan era did produce the tax and spending cuts for social programs Reagan championed, but his policies bankrupted the nation. This is a lesson the Bu$h cabal and more importantly the AmeriKKKan voters failed to learn! Unlike when Reagan came into office where the Federal Reserve Central Bank had set double digit interest rates, under Bu$h II, the Fed’s extraordinarily low interest policies set the stage for increased debt accumulation both by the government and US citizens. This debt explosion fueled the housing construction boom that is now cooling off. The chickens are coming home to roost!
Calling themselves Neo Conservatives the Bu$h gang bum rushed tax cuts for the rich through Congress and increased spending boondoggles for their corporate buddies that are now drowning the government in red ink! “George W. Bush is a big spender. He has never vetoed a spending bill. When Congress serves up a big slab of fat, crackling pork, Mr. Bush responds with one big question: Got any barbecue sauce? The great Bush spending spree is about an arguably shrewd but ultimately unhelpful reading of history, domestic politics, Iraq and, I believe, vanity. This, I believe, is the administration's shrewd if unhelpful reading of history: In a 50-50 nation, people expect and accept high spending. They don't like partisan bickering, there's nothing to gain by arguing around the edges, and arguing around the edges of spending bills is all we get to do anymore. The administration believes there's nothing in it for the Republicans to run around whining about cost. We will spend a lot and the Democrats will spend a lot. But the White House is more competent and will not raise taxes, so they believe Republicans win on this one in the long term.” Whatever It Takes' Is Bush's big spending a bridge to nowhere? Peggy Noonan http://www.opinionjournal.com/columnists/pnoonan In her Wall Street Journal Op-Ed piece Ms Noonan points out both parties are spending money which is exactly the problem, there is no fiscal responsibility to be found in Washington. The government like its citizens is spending far more money than it takes in and has to audacity to continue to reduce its income (taxes) and increase its’ spending at a time when it should be doing the exact opposite!
The US consumer is in the same predicament. For Africans in AmeriKKKa and Latinos the situation is alarming. According to a report entitled Costly Credit African-Americans and Latinos In Debt by Javier Silva and Rebecca Epstein found: “african americans
•Between 1992 and 2001,average credit card debt for African Americans increased from
$2,416 to $2,950 —a 22 percent increase over the period.
•Nearly 60 percent of African Americans held a credit card in 2001,and nearly 84 percent
of these card holders carried a balance.
•In 2001,the average credit card indebted African-American household spent nearly 20
percent of its income on debt payments.
•Nearly one out of five credit card indebted African Americans earning less than $50,000
was in debt hardship —in other words 40 percent of their income was spent on debt
service payments in 2001.
hispanics
•The average credit card debt among Hispanics increased by nearly 20 percent between
1992 and 2001 from $3,082 to $3,691.
•While just over 50 percent of Hispanics held a credit card in 2001,more than 75 percent
of cardholders carried a balance.
•In 2001,the average credit card indebted Hispanic household spent 19 percent of its
income on debt payments.
•One in seven credit card indebted Hispanic households earning less than $50,000 was in
debt hardship in 2001.
Debt hardship is a key indicator of household financial health.A family is considered to be in debt hardship when monthly debt service payments equal 40 percent or more of household income.Regardless of racial or ethnic backgrounds,debt hardship remained high throughout the 1990s for very low-income families.As a result of increasing debt hardship,families must make tough choices to remain solvent.To manage debt payments which take a larger and larger share of monthly income,many families turn to predatory lenders such as payday lenders and pawnshops.Unfortunately, African-American and Hispanic families are more likely to fall victim to high cost financial services because many predatory lenders open offices,and market aggressively,in these communities.These predatory lenders provide illusory solutions and contribute to worsening household finances.”
Take a look at the statistics, AmeriKKKans are in stultifying debt due to a myriad of reasons, but now the banks and credit card companies are about to exact their pound of flesh. The Fed had the US treasury print and pump billions in fiat (worthless) paper money into circulation last Spring which along with rising energy costs are putting a strain on people’s household budgets because their wages have remained stagnant. The US economy contrary to the lies the Bu$h administrations is telling is not doing well. Ford and GM two industrial giants are staggering on the ropes and may go under. Both have announced huge lay-offs which will have a rippling effect on the economy. What can we do to keep from drowning in debt? Formulate a strategy to reduce your debt and develop a long range plan to get out of debt. Cut out superfluous spending, budget wisely during these inflationary times, establish a priority to cut spending and get out of debt. If you have to, seek counseling and begin to scale back on your spending in these inflationary times. Don’t despair, be optimistic be proactive and count your blessings.

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posted by Junious Ricardo Stanton @ 5:40 PM