Why Alstry in Crisis Mode
August 28, 2008
– Comments (9)
Right now our nation is facing an unprecedented financial crisis. Few seem to be addressing the issue.
Tax revenues to our governments is evaporating. Tax revenues are evaporating because earnings are evaporating. When earnings evaporate spending slows causing even further slowing ahead.
Imagine a surgeon who supports 10 families. He lives modestly and is able to save a little at the end of the month. If he loses his hand in an accident, not only does he default, so do the ten families that were dependent on him. In addition to those families, are are those that were dependant on those families spending.
A government is not much different except instead of 10 families, we are dealing with millions of families and employees and thousands of businesses dependant on government spending employing millions.
Our banking, auto, airline, construction, mortgage finance went from making hundreds of billions of dollars a few years ago to making nothing today. The outlook for earnings is even worse. These business were repsonsible for employing millions and paying billions and billions in taxes. Not only are the business not paying taxes because they are losing money, the millions employees that have been fired are not paying income or social security taxes.
Banks that have been profitable for 70 years and more are now losing money even after reducing staff. Further, a money losing bank can't lend and when most of the banks are losing money our system will simply shut down. We are already one full quarter into this process.
As our capitalist system shuts down, the populous growing poorer and poorer and will demand change. As more and more go hungry and more and more go bankrupt, the voices will get louder and louder.
Right now millions are screaming siliently. Soon the silencers will be removed as the situation continues to degrade.
Some complain that I fail to propose solutions......the issue is that the nation must first appreciate the problem before intelligent discourse can be had about solving the problem.
Right now, we are being lied to about the financial condition of many of our important companies. Asset values are not being fairly reflected on the financial statements. As asset values continue to crash the problem gets worse everyday.
If we refuse to stand up and help ourselves, who will help us. We can't help ourselves until as a nation we understand the problem.
In a nutshell, the banks loaned too much money to too many. Now the too many can't pay back the banks. As the too many run out of savings they are defaulting in greater and greater numbers. When too many fail, the entire system fails.
NEVER BEFORE HAS IT BEEN TOO MANY!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
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