The recent decision by the Federal government to eliminate the middle man from student lending programs may prove to be historic. The logic for this policy shift is simple. For years, student loan programs were run, supported, funded and insured by the government, but the banks were the official lending institution. It was a pretty sweet deal for the bankers who pulled in lucrative profits, but had little risk exposure. Essentially, the money brokers raked in profits from the majority of students who paid their loans, but passed off the deadbeats to the government under a cozy arrangement.

It does not take a genius to recognize the immediate cost savings that result from the government cutting out the banks. No middle man translates to lower interest rates which lead to lower payments which results in greater affordability which means fewer defaults which makes more money available for more students. It’s a win-win situation for the students, our government and our economy. The only apparent losers are the banks who have lost their exclusive access to the education money pit.

Why has this monumental hole not been closed earlier? It seems financial institutions have a long history of making money with other people’s money while passing off the risk of doing business to the government. As a result of this comfy situation, the government has enacted guarantees such as the FDIC to protect depositors and the economy from the frequent missteps of the middleman brokers.

Today, the government produces dollars for the banks at interest rates close to zero. The banks then pass the money off to consumers who are forced to pay interest rates of 5 to 25 percent for the privilege of borrowing the money from the middle man. The banks make immense profits until they inevitably get greedy. And when these banks screw up and threaten the viability of our entire economy, the government feels obligated to save them with trillions of free dollars because they have become “too big to fail”.

It seems our government can eliminate the entire private banking system. Hopefully, the government takeover of the student loan program is a first step in abolishing this archaic scheme. It does not make economic sense for our government to produce, distribute and guarantee dollars for banks that have so frequently failed the American people and endangered our way of life.

The official answer claims personal consumption is necessary to restart America’s stalled economic engine. The logic states that once people begin consuming again, then jobs and renewed prosperity will automatically follow. This reasoning might work if the USA was still a prominent manufacturer of automobiles and appliances. Unfortunately, the USA has fallen behind other countries in the production of autos and appliances. For instance, the USA has dropped to third place in the production of autos, behind first place Japan and second place China. The picture is far more dismal for the production of appliances. Ironically, our country is perpetuating our present crisis with their unsound agenda.

Because of our diminishing manufacturing capability, the greater effect of consumption incentive programs winds up stimulating the economies of foreign countries that generate the majority of products Americans use. As a result, the Clunkers boondoggle increases our National Debt, enlarges our Trade Deficit and amplifies our personal debt while utterly failing to increase employment opportunities in the US. It either represents economic policy gone wild or a carefully executed scheme of those who embrace the nebulous cause of globalism.

If the Clunkers programs applied to American made products only, then increased employment would follow. Subsequently, people would have more money for legitimate consumption and the stage would be set for increased prosperity. As it stands, anticipate there will be still another stimulus with more government sponsored hand-outs. And one day, when government’s flawed policies renders the dollar worthless, we will all learn that there is no free ride. Hopefully, Americans will then understand they must produce in order to consume.

For example, the award of trillions of dollars of taxpayers’ money to subsidize the errors of America’s financial institutions was far less scrutinized than healthcare. Sure, there was some debate and concern about the immense bailout, but it measured as a minor quake on the Richter scale when compared to the violent earth shaking reaction that preceded and follows the controversial healthcare law. And just what can be more socialistic and anti-capitalistic than the expenditure of a nation’s resources for the benefit of a handful of inept and failed businesses?

And what of the contentious Jobs and Growth Tax Reconciliation Act of 2003 whereby tax relief was supposedly granted to the general population? The end result of fewer jobs, lost wages, skyrocketing National Debt and the housing crisis speaks volumes of the social inequities contained in this aristocratic legislation. Where was the public indignation when the tax burden was shifted from the rich to the middle and working classes thereby further increasing the level of income and wealth inequality? Where the public outrage as the National Debt grows to unsustainable levels creating an immense obligation for generations of unborn Americans? The cries for economic and social justice pale when compared to the current healthcare controversy.

What are the social, economic and political priorities of our nation? It appears people are most radical when they are asked to share basic living accommodations with their fellow Americans. At the same time, these same people become reluctant to rail against the far more detrimental aristocratic practices that have created an economic dependence on a relatively few wealthy elitists.

Are we so brain washed by the political spin of the Democrats and Republicans that we are unable to decipher what truly works for America and her citizens? Have we inadvertently surrendered the independence and liberty we all seek to defend to a hidden power that already controls us through its influence on our political officials? It is good the populist rebellion is now in place and is being heard. Hopefully, we will begin to understand who or what we should rebel against before it is too late!

Inflation comes as a result of putting too much money into the economy. In essence, it is the consequence of too much money chasing too few goods. No one can question there has been a massive injection of dollars, but there is negligible inflation according to our government. One reason for this anomaly may be the fact that few of these newly minted dollars are reaching the consumer. Most of the money has gone to failing financial institutions and was largely used to pay their old debts which insured the viability of wealthy investors. Therefore, there is no new economic activity that can spike inflation rates. Suffice it to say the average taxpayer will pay a hefty price for their compulsory participation in this scheme to save the wealthy from their poor investment decisions.

Deflation is the effect of too few dollars chasing too many goods. In this situation, prices decline due to an oversupply of goods in the market place. The housing crisis is an excellent example of deflation in the US economy. There is a case for declining prices in other areas as well. For instance, productive capacity in the USA and the world continues to increase even as wages decrease and jobs are eliminated. In other words, more products are being created, but there is a reduced capacity to purchase the increased supply. This is a recipe for massive deflation if the trend persists.

At the core of the inflation-deflation argument is the worker/consumer who has been left out of the current economic equation. Inflation or deflation will come proportional to the ability of the average person to participate in the economy. Deny too many people a job or a living wage in an environment of increased productivity and deflation is the logical conclusion. Alternatively, inflation will inevitably develop in a full employment economy when the Fed is loose with its money making policy.

Our inept leaders are charged with the responsibility of determining our nation’s economic future. Is it any wonder the USA finds itself in the current dilemma? Our future will continue to be clouded until those in control understand economic policy must be made to benefit all Americans and not just a handful of wealthy elitists.

One must first recognize the nature of unemployment in the USA if there is to be a realistic solution. Our political and business leaders have ignored the genesis of our current problem for far too long. Through their inaction, they may have created permanent structural unemployment in our country. The consequences of free trade and illegal immigration have debilitated our economy and produced the high unemployment rates we are currently experiencing.

Since 1976, the USA has had a horrific string of uninterrupted trade deficits which has cost our economy over 7.2 trillion dollars. During the same period, tens of millions of jobs were lost to foreign manufacturers who have the clear advantage of a penny labor force, hardly any labor laws and very few environmental concerns. None the less, our leaders continue to expand the losing trade relationships by incentivizing American producers to shift their production to foreign countries. It makes no financial sense for the vast majority of Americans, but it is obviously quite profitable for our multi-national corporations and our corrupted congress. It appears we are intent on committing national economic suicide, for a profit.

The issue of illegal immigration is another financial nail in the coffin of the USA economy. Both parties have railed against the illegals, but neither party has done anything to enforce existing laws. The undocumented worker is willing and able to work for lower pay and subsequently has caused the loss of work for millions of American citizens. In addition, the scale of wages in related career fields has fallen due to the increased competition for the available jobs. Essentially, our government leaders at the request of their corporate sponsors have artificially inflated the labor force resulting in an oversupply of workers. Businesses love this situation because lower wages generally means higher profits.

The solution to the present day economic crisis is clear. The USA needs good paying work. The living wage jobs are immediately available if our leaders do the right thing for America. Repealing the free trade agreements and enforcing the immigration laws would result in a revitalized economy with increased opportunities for every American citizen. It’s time we all be concerned with the future of our country!

It’s unfortunate because there are significant problems hidden behind the debates. Healthcare costs have raced out of control for over 20 years. In fact, the radical increases have fractured the budgets of the majority of our countrymen. Efforts to understand the anomaly have been frustrated and relief from the staggering costs has been elusive. Add to this disparity the fact that over 46 million people are uninsured and the need for reform becomes painfully apparent.

On the other side of the debate is a solid block of legislators who believe that the present proposal is full of hidden agendas which will ultimately result in higher and more uncontrollable costs. This group claims corruptive influences in the form of special favors has tainted the legislation. They have injected fears of lost benefits and restricted medical access for those presently insured. They have raised concerns among the elderly about planned death initiatives. They have effectively presented a case against reform.

No one misses the fact that the proponents and opponents of healthcare are divided by party affiliation. For the diligent observer, one can easily surmise how this succinct division can occur. Our representatives are so beholden to their respective parties that their only allegiance is to the position adopted by the Democrats or Republicans? If so, what is the fate of the representative government? What happens to our country when an issue is not resolved in the interest of the greater good, but rather on the basis of political affiliation?

This scenario is not new to American politics. The concept of divide and conquer has been successfully used by both the Republicans and Democrats to split and confuse the masses. In turn, the electorate has shown their disdain by fleeing the two parties and choosing to become Independent. Unfortunately, this gesture of contempt is unproductive. If our leadership is poor, they must be replaced. If the two parties are in collusion, they must be destroyed. Representative government is dead and only the fanatical intervention of an aroused citizenry can restore a responsive leadership!

The minimum wage should be replaced with a living wage. Every American, with some exceptions, who works a full time job, should be able to make an income sufficient to adequately feed, house and care for a family. The social benefits would be immense. With everyone making a living wage, there would be additional consumption, less crime, increased innovation and new opportunities. In addition, the federal, state and local government would be relieved of the burden of subsidizing underpaid laborers with food stamps, housing allowances, medical assistance, earned income credits and a host of other programs designed to permit lowly paid Americans to live at a subsistence level.

The many employees caught in the trap of minimum wages and the degrading need to obtain government handouts would have a new sense of fulfillment which is the very essence of the American dream. Once businesses are no longer dependent on the government to support their employees, they will be forced to develop a new business plan in order to properly pay their employees. This will not be a simple task, but it has been done in the past and it is very doable now.

Obviously, there will be a groundswell of opposition from business. Once again, they will have to be self-sufficient and will have to learn how to become independent of the government crutch that has insured their profitability. In order to keep good, productive and healthy employees, businesses will have to provide a living wage. No doubt, businesses will fight back with fears of economic stagnation, declining income and possible bankruptcy. For some, this scenario will become a reality. But for those who are able to adjust, their success will be a tribute to American spirit of self- reliance and autonomy which made our country great.

Millions of businesses in the USA already pay a living wage or better to their employees. They understand that in order to attract and keep good help, it is their obligation to meet basic financial standards. It hasn’t always been this way. The struggle for equitable wages has been a battle for generations of Americans. The task may be daunting, but it quite possible.

In January of 1914, Henry Ford made history when he voluntarily doubled the wages of his employees to $5 a day. He was berated by many of his colleagues, but he had a higher goal. Ford ascertained that his generosity would pay off in the form of loyal employees who would now be capable of buying his automobiles. Ford was right and he went on to become a leading industrialist of his age.

Some may recall the promise of a new information economy where the USA would lead the world with an enhanced computer technology that would recast the way business is conducted. Sure enough, the technology did develop, but the USA cannot lay claim to being an insightful leader in this growing and innovative field. To the contrary, many American businesses had elected to export our knowledge base to foreign engineers, architects, accountants and other professionals whose cost effectiveness outweighed their American counterparts. Americans were left with immense computing power which is largely used to play a never ending array of complex games. We can readily socially connect with lost classmates and old friends, but we can’t find a living wage job that provides an outlet for our latent creativity. Once again, we were instructed not to worry as “free trade” and “market forces” would provide for our nation’s future.

And so the USA had arrived at its new position as a global leader which entailed continual consumption using a currency that was the envy of the world. For a while, everything seemed to work quite well. Americans went on a buying spree gobbling up inexpensive foreign products using dollars to pay for their endless appetite. Foreign countries gladly supplied the products in exchange for the coveted dollar. It appeared that American capitalism had developed a new paradigm as a super power.
American financiers became the new productive mode. They developed innovative and exotic monetary products which were used to drain the world of their excess dollars. Mortgages, credit cards, school loans, car loans and every other instrument of American debt were presented to the world for their consumption. The financial geniuses even provided guarantees of profitability in the form of insurance policies. And then the inevitable collapse came as the American consumer defaulted on their obligations. They simply did not make enough money to support their spendthrift habits. The disease spread to the banks infecting the American economy before contaminating the world.

The banks and their wealthy allies were “bailed out” by a taxpayer injection of trillions of dollars effectively aborting the concept of “free markets”. It appears a temporary reprieve as the economy totters for lack of direction. Mixed signals betray the confusion that prevails. Wall Street responds with optimistic growth while Main Street struggles to stay in their homes. The ill-conceived theory of consumption without production has been firmly crushed. There is no free ride- America must go back to work and begin producing for her own needs if we are to have a viable economy.

The horror stories are abundant but the details of the nefarious scheme are remarkably similar. The tale of a distressed applicant enrolled in HAMP for over a year speaks of the uncaring and frivolous attitude of the bank handling her application. She lost one of two full time jobs and had her hours cut back in her second job. This mother of three promptly notified Wachovia Bank of her difficulty. Wachovia responded with requests for various documents, a complete review of her financial situation and the promise of relief if she satisfactorily completed a three month trial period. The woman sent in the required payments and responded promptly to additional requests for documents. At the end of the trial period, she was notified by Wachovia that there would be another trial period. Once again, she faithfully adhered to trial period only to be disappointed. At the last moment, she was notified her loan now was owned by Wells Fargo.

Wells Fargo started the process over again requesting documents and placing the dejected woman in another trial program. Recently, she completed the trial and was placed in a fourth trial period. To date, she has sent in 14 copies of near identical documentation, made 38 phone calls, had required home counseling, written 3 hardship letters and has been visited by a bank representative. She continues to respond to this idiotic procedure. She really wants to keep her home.

This is not a lone instance nor is Wells Fargo the only screwed up bank. Bank of America, Citi Bank and many other organizations have been accused of comparable devious tactics. These institutions lack either a heart or a brain and should be reprimanded for their complete lack of ethics. They have an obligation to be forthcoming with the financially impaired homeowners. Banks should promptly resolve the issues rather than holding distressed residents on a whimsical string with their veiled inferences of a successful outcome. It is all the more appalling that these same banks received billions of dollars of bailout funds to rescue them from their financial blunders.

Some homeowners have combined in an effort to sue the banks for their reprehensible behavior. If anyone is interested in joining a similar law suit, please respond to this article and perhaps you can hold the banks accountable for the misery they continue to inflict. People need to be able to go on with their lives without the phony promise of something that will never happen!