Causes of and Remedies for Our Economic Problems

© O. R. Adams Jr. 2011


First, let me say that I do not know the answer to these problems, and I doubt if any other one person does. However, I do want to present some factual information and some ideas to consider.

Today, we have "protesters" occupying Wall Street, and other places around the country, apparently trying to convey the idea that our bankers, big businesses, and people with high incomes are the cause of our unemployment and economic problems. This is not true.

The protesters are not my kind of people. Many defecate and urinate in parks, on lawns, streets, and even on a police car. They trash up things in general. See the article in UK news, Stinking up Wall Street: Protesters accused of living in filth as shocking pictures show one demonstrator defecating on a POLICE CAR .[1] See the picture of our flag being desecrated by one of the hippie looking characters.

Spreading disorder: Unrest is growing in a dozen US cities including Austin, Texas (pictured)

The pictures of this kind of trash tell a lot about them.

Both the American Nazis and the Communist Party USA support the Occupy Wall Street movement.[2] And of course, the public sector unions and teachers' unions support the protesters.[3]

Our radical President Obama supports the Occupy Wall Street protesters.[4] Before he was elected president, Obama displayed his disrespect for our Flag and our Country. See the article on this website under Articles, Barack Hussein Obama is a Fraud.[5]

When  the above picture was taken, the National Anthem was being played. Notice the contrast of Obama, with his hands down at his crotch, and the others. And the country elected this man as its president. The country got what it deserved – he has been a catastrophe.

The liberal media and Democrats, generally, express their support for these radicals. Articles and even a book, are written on the problems of "income inequality." 

Three Harvard professors, Joseph L. Bower, Herman Leonard, and Lynn Sharp Paine, wrote the book, Capitalism at Risk: Rethinking the Role of Business. The following is from a review of the book on a Harvard website:

The spread of capitalism worldwide has made people wealthier than ever before. But capitalism's future is far from assured. The global financial meltdown of 2008 nearly produced a great depression. Economies in Europe are still teetering. Income inequality, resource depletion, mass migrations from poor to rich countries, religious fundamentalism--these are just a few of the threats to continuing prosperity. How can capitalism be sustained? And who should spearhead the effort? Critics turn to government. In Capitalism at Risk, Harvard Business School professors Joseph Bower, Herman Leonard, and Lynn Paine argue that while governments must play a role, businesses should take the lead. For enterprising companies--whether large multinationals, established regional players, or small start-ups--the current threats to market capitalism present important opportunities. Capitalism at Risk draws on discussions with business leaders around the world to identify ten potential disruptors of the global market system. Presenting examples of companies already making a difference, the authors explain how business must serve both as innovator and activist--developing corporate strategies that effect change at the community, national, and international levels.[6]

I haven't read the book, but from the above review, it doesn't appear that even these professors from very liberal Harvard University blame the world's economic problems on Wall Street. It also appears that they recognize that it is capitalism that has made people wealthier than they have ever been before. No specific remedies for "inequality" in wealth are suggested in the review.

On what purports to be a business website, Business Insider, was an article, October 11, 2011, CHARTS: Here's What The Wall Street Protesters Are So Angry About,[7] by Henry Blodget. It has a number of charts, dealing mainly with unequal distribution of income in the United States. It states:

The "Occupy Wall Street" protests are gaining momentum, having spread from a small park in New York to marches to other cities across the country.

So far, the protests seem fueled by a collective sense that things in our economy are not fair or right.  But the protesters have not done a good job of focusing their complaints—and thus have been skewered as malcontents who don't know what they stand for or want.

(An early list of "grievances" included some legitimate beefs, but was otherwise just a vague attack on "corporations." Given that these are the same corporations that employ more than 100 million Americans and make the products we all use every day, this broadside did not resonate with most Americans).

So, what are the protesters so upset about, really?

Do they have legitimate gripes?

To answer the latter question first, yes, they have very legitimate gripes.

And if America cannot figure out a way to address these gripes, the country will likely become increasingly "de-stabilized," as sociologists might say. And in that scenario, the current protests will likely be only the beginning.

The problem in a nutshell is this: Inequality in this country has hit a level that has been seen only once in the nation's history, and unemployment has reached a level that has been seen only once since the Great Depression. And, at the same time, corporate profits are at a record high.

In other words, in the never-ending tug-of-war between "labor" and "capital," there has rarely—if ever—been a time when "capital" was so clearly winning.

In a follow up article on the same website, on October 15, 2011, Here Are Four Charts That Explain What The Protesters Are Angry About,[8] Blodgett states:

The charts explain what the Wall Street protesters are angry about. They also explain why the protesters' message is resonating with the country at large.

The following are the charts with Blodget's explanations:

1. Unemployment is at the highest level since the Great Depression (with the exception of a brief blip in the early 1980s).

2. At the same time, corporate profits are at an all-time high, both in absolute dollars and as a share of the economy.

3. Wages as a percent of the economy are at an all-time low. In other words, corporate profits are at an all-time high, in part, because corporations are paying less of their revenue to employees than they ever have. There are lots of reasons for this, many of which are not the fault of the corporations. (It's a global economy now, and 2-3 billion new low-cost employees in China, India, et al, have recently entered the global workforce. This is putting pressure on wages the world over.)

4. Income and wealth inequality in the US economy is near an all-time high: The owners of the country's assets (capital) are winning, everyone else (labor) is losing.

Three charts illustrate this:

The top earners are capturing a higher share of the national income than they have anytime since the 1920s:

CEO pay and corporate profits have skyrocketed in the past 20 years, "production worker" pay has risen 4%..

After adjusting for inflation, average earnings haven't increased in 50 years.

It's worth noting that the US has been in a similar situation before: At the end of the "Roaring '20s," just before the start of the Great Depression. (See some of the charts above).

It took the country 15-20 years to pull out of that slump and fix the imbalances. But by the mid-1950s, employment, corporate profits, wages, and inequality had all returned to more normal levels. And the country enjoyed a couple of decades of relatively well-balanced prosperity. But now, everything's out of whack again.

Importantly, the inequality that has developed in the economy over the past couple of decades is not just a moral issue. It's a practical one. It is, as sociologists might say, "de-stabilizing." It leads directly to the sort of social unrest that we're seeing right now.

It is rather ridiculous to assume that many, if any, of the protesters ever saw these charts, or have any idea about the basis of Blodget's argument. They are his ideas – not the protesters' ideas. Some of the protesters are there because they just like to participate in such things – they are truly the hippie drug culture types. Others are there because they are encouraged to do so by the Nazi and Communist parties, and by the unions named. Others are there because Democrats think that such things might help President Obama get reelected. I believe and hope that this is misguided.

It is interesting that Blodget does not suggest any specific remedies. Do he and such people just want to arbitrarily take the income away from the corporations and people who earned it, and give it away to those who didn't? Just what methods do they wish to use, and how and by whom will these things be decided, and how will these deciders (or dictators) determine who is entitled to this money taken away from those to whom it belongs?

I believe that such people want to kill the geese that have been laying the golden eggs. Even the three Harvard professors recognize that "the spread of capitalism worldwide has made people wealthier than ever before." These are the people and companies that supply the meaningful jobs so badly needed in our economy and in the world today. They produce the goods and services needed and wanted by the people. The people who want to arbitrarily change this sound like the people of the bloody French Revolution which began at the end of the 1700's, when many of the best and brightest people in the country were beheaded, with the guillotines, by the mobs. That was an extreme example of what rule by the mobs can do.

All companies and their stockholders are not the fat cats the liberals would have us believe. General Motors and Chrysler, two of our largest auto manufacturers, got in deep financial trouble and were bailed out by the government. Under the Obama administration, and the Democrat plan, the government put money in to shore up General Motors, but its stockholders were effectively wiped out.[9] Their stock was arbitrarily taken from them and was in effect given to the auto union. Even the bondholders were shafted in favor of the unions.[10] Ford Motor Company had its problems, but seems to have worked its way out without government help or interference. A number of banks went under, and some are still in trouble. The recent news is that Bank of America and Goldman Sachs are posting large losses. 

As for Blodget's charts and statistics, they are interesting. But there are other statistics that tell a more important story about the jobs, goods, and services created by these corporations and their stockholders who supply the capital. They show what they have done for the people of America, which has led the way for freedom and capitalism.  

For many years, the United States has been the leader of the world in basic individual freedoms, including property rights. This produced a capitalism that also led the world in production. Although the United States has been losing jobs, particularly in the important area of manufacturing, to countries such as China, India, and Mexico, where the work is done for much lower wages than in this country; the United States still produces more gross domestic products than any country in the world, even though it does not have the greatest population.  

                                                          World Bank Data[11]


Gross domestic product 2010










(Millions of




US dollars)









United States

























United Kingdom

























Russian Federation















Korea , Rep.













































Saudi Arabia










Venezuela , RB















South Africa





Iran , Islamic Rep.
































With its small population in comparison to China, which is now considered a great industrial power, the United States produced about 2 ½ times the GDP of China. And 2010 was a year of severe economic crisis in America. Japan produced almost as much as China. Freedom and democracy facilitate economic growth. There is nothing like a free enterprise system, which many, like some of our protesting radicals, want to get rid of. They apparently would rather have a government like China, where the people have none of our basic freedoms.

Another important factor is the GDP per capita for 2010[12]:

Although I could not find the exact date for the above information on the website from which I got it, I have compared the above to the same information in Wikipedia, and it shows that the information is for 2010.

Another interesting thing is that China and India, which ranked high on the gross domestic product chart, are not even on the above chart. Because of their great population, their production is comparatively small per person. Russia also did not make it on the chart of the top 30 countries of GDP per capita. We see that the United States, with its current high unemployment, current economic problems, and after having lost so much of our manufacturing and services to countries like China, India, and Mexico, where labor is so cheap, still produces by far the highest per capita GDP of any of the big countries of the world.

An even more important factor relating to the arguments about inequality of income is the median average income of the households in the countries. A median average shows more about what the greatest number of people are earning. It is not as much affected by the highest and lowest income brackets as a mean average would be.

Median household income[13]

Data are in United States dollars at current prices and

current purchasing power parities for the reference year.








 United States


















 United Kingdom



























 New Zealand









 South Korea


















 Czech Republic












 Slovak Republic














Only the people of Luxembourg had a higher median income than in the U. S. Luxembourg is a uniquely situated little country in Europe that is known as the richest country in the world. It has an average household income of about $80,000. (That would be a mean average -- note the difference between the mean average of $80,000, and the median average of $34,407, from the chart, above.) It has a population of only a half of a million people. The government ensures that taxes are kept relatively low and that the financial environment is favorable to investors. The people are incredibly well educated.[14] Luxembourg does not have our problem of a large number of people who have made a career of being on welfare, and an illegal immigration problem that lowers the average standard of living.

We see that our country has supplied its people with living conditions that are really unsurpassed for a large industrial country. So we should be very careful about complaining that there are others in the country that have more. The United States did this with severe problems, that drive down income, that the countries near the top of the median income do not have. We have illegal immigrants form Mexico that drive down wages in the country and reduce the average income. We have a welfare system that encourages able-bodied people to be on welfare and have babies that will necessarily be cared for by the work of others. We have generations of people that follow their parents in being on welfare and living off others. We have a black population that has a lower average income that reduces median income. Black's have been severely damaged by false liberal teachings that somehow they are entitled to live off of others, because many were descendants of slaves, and are being discriminated against. All of these things substantially lower our median income – consider what it would be without them. None of the other higher median income countries have such problems to near the extent of the United States.

Since the attacks on this country by Islamic extremists, on September 11, 2001, we have been recovering from that disaster, and fighting several wars. Also, the United States has spent more money and lost more lives in combat defending the freedom of others than any other country in the world. We continue to do so. This substantially reduces the assets of the country. 

It is also quite interesting that China, which has the highest GDP, next to the United States, does not even have enough median household income to be on the above chart. This tells us something about how China is able to manufacture things at such a low price, and why when we look at many of the products we buy we see "Made in China." We have freedom in this country that the people of China do not have, and with it comes our prosperity. Let's not ruin it by mimicking China in not respecting the rights of people to earn income and dispose of it as they wish, instead of having it taken away from them and used as some bureaucrat thinks is best.

In some respects, it is good for poorer countries to get work and help from U. S. companies, allowing the people in those countries to have a better existence. But it reduces jobs here, and it is allowing China, a totalitarian country, to build up its military forces, and become a bigger threat to this country. And it reduces the median income in this country.

One might think that some of the European countries, with more democratic socialism, and particularly a country like Norway, with more GDP per capita than the United States, might have a higher median income, but the U.S. is higher. And this is with all of the complaints about the wealthy having all of the income, here. No doubt, the fact that we have the wealthy, with capital to invest in companies that produce our great GDP, helps all of us. This is something people should keep in mind when "redistribution of wealth" is considered. The people with the median income do the work, but they do not supply the jobs they work at, unless they are among the small independent business owners.

I do not believe in equality of wealth for everyone – only in equal opportunity . I believe that people who supply capital for companies that produce valuable goods and services, and thereby create jobs, are entitled to be rewarded according to a free market economy, without government control of prices or profits. I believe that those who work at producing goods and services are entitled to more than those who do not produce, and live off of those who do. I believe that when an able-bodied person gets money, he or she should work for it. There is always work that needs to be done. With our welfare mindset, we have made it difficult for employers who need people for hard manual work, such as farming and harvesting, to get people to work, unless they are illegal immigrants from Mexico. I do not believe that anyone is too good to do any kind of work, and that if it is necessary to make a living people should take on the hard manual work. Not everyone is equipped for or is capable of being business managers or executives.

President Obama, and such socialist types, claim that the rich are not paying their fair share of our income taxes. Let's look at the facts. The following statistics are from the Congressional Budget Office.[15]

Share of Individual Income Tax Liabilities According to Income

Year   ___Quintiles (One-Fifths)____   __Top Income Percents__ 

           1st      2nd     3rd       4th       5th       All      10%      5%     1% 

1979    0.0    4.1    10.7    20.2    64.9    100.0    48.1    35.6    18.3

1980    0.1    4.2    10.8    20.2    64.8    100.0    47.6    34.9    17.4

1981    0.2    4.4    10.9    20.6    63.9    100.0    46.6    33.9    16.3

1982    0.2    4.0    10.6    20.2    64.9    100.0    47.6    35.0    17.7

1983    0.2    3.8    10.2    19.7    66.1    100.0    49.1    36.6    19.6

1984    0.3    4.1    10.1    19.2    66.3    100.0    49.9    37.7    20.7

1985    0.2    4.0     9.9    19.0     66.9    100.0    50.5    38.3    21.2

1986    0.2    3.7     9.2    18.0     68.9    100.0    53.4    41.6    24.6

1987   -0.3    3.1     8.7    17.5     70.9    100.0    54.7    42.1    23.5

1988   -0.4    2.9     8.5    17.2     71.9    100.0    56.3    44.5    26.6

1989   -0.7    2.8     8.9    17.6    71.4     100.0    55.3    42.9    24.3

1990   -0.4    3.3     8.9     17.8    70.4     100.0    54.3    42.1   23.8

1991   -0.8    2.9     9.0    18.0    70.8     100.0     54.5    42.1   23.4

1992   -0.9    2.5     8.4    17.1    73.0     100.0    57.2    44.9    26.2

1993   -1.0    2.3     8.1    16.8    73.8     100.0    58.4    46.4    27.6

1994   -1.7    1.8     8.1    16.9    74.9     100.0    59.3    46.9    27.8

1995    -2.0    1.9    7.7    16.2    76.1     100.0    60.8    48.5    29.0

1996    -2.1    1.6    7.3    15.5    77.6     100.0    62.9    50.9    31.4

1997    -2.0    1.7    7.2    14.9    78.2     100.0    63.7    51.8    32.3

1998    -2.1    1.3    6.4    14.6    79.8     100.0    65.4    53.4    33.5

1999    -1.9    1.3    6.1    14.0    80.6     100.0    66.7    55.1    35.0

2000    -1.6    1.1    5.7    13.5    81.2     100.0    67.7    56.2    36.5

2001    -2.3    0.3    5.3    14.3    82.4     100.0    67.7    55.2    34.4

2002    -2.7    -0.2    5.4    14.7   82.7     100.0    67.5    54.5    33.0

2003    -3.0    -1.1    4.7    14.6    84.8    100.0    69.6    56.6    34.6

2004    -2.9    -0.9    4.7    13.8    85.3    100.0    70.8    58.5    36.7

2005    -2.9    -0.9    4.4    13.1    86.3    100.0    72.7    60.7    38.8

2006    -2.8    -0.8    4.4    12.9    86.3    100.0    72.8    60.9    39.1

2007    -3.0    -0.3    4.6    12.7    86.0     100.0    72.7    61.0   39.5

The above was the latest information on the subject that I was able to find. But perhaps it is just as well, because it was before the Obama administration, and in more normal times. Also, our tax structure has not substantially changed since 2007, due to the resistance of the Republicans in Congress against increases in taxes "on the rich" proposed by Democrats.

We see from the above that in 2007 the top 1% of the people was paying over 1/3 of the total income tax burden of the country. They were paying 39.5 times their pro-rata share. It would seem to me that those are the people that are being treated unfairly. Having a lower income than others does not entitle people to have a free ride on the backs of the others.

Notice that the lowest 40% not only paid no income tax, but that negative figures are shown for them. This is something the Democrat controlled congress pushed through that is the most unfair thing in our tax system. These people got "low income tax refunds" even though they paid no income taxes. They were made gifts, which they did not earn, from the taxes which were, by law, taken away from the people who earned the money by doing productive work or by investment. I do no call this fair. But that is the way of the "tax the rich" Democrats in this country. It is their way of "redistributing the wealth" – the Robin Hood mentality of take from the rich and give to the poor. And it makes a country far less productive and a weaker country.

In 2009, approximately 51% of American households paid no federal income tax.[16] Over half of the people lived off of the other half, insofar as bearing the cost of government is concerned.

It is argued that the low income segment may not have paid income taxes, but they paid unemployment and social security taxes, which some did. But that was for their own benefit. Not only that, but their employers were also paying a large part of those taxes for the benefit of those who actually did some work. The Robin Hood types apparently think that the people who do the least for our country, should get a free ride on the backs of the more productive half of our country.

But even this is not enough for the socialists like Obama. He even suggested that perhaps the United States Supreme Court should engage in the redistribution of wealth in this country. He is a man that has no respect whatsoever for our Constitution, and our traditional American values.[17]

In regard to our economic crisis, we should first consider the causes. Due to excessive government spending, and increasing our national debt to astronomical sums, it has been building up for some time. Then there were several factors that added to and precipitated the problem.

We had a huge unrealistic bubble in housing prices. Loans were made to buy houses based on those prices. The housing price bubble was caused by an unrealistic demand for housing brought on by the government, by law and by pressure, causing banks and lending institutions to make loans to low income people that could not afford those loans. Since they could not afford the loans in the first place, many started to default on the loans, causing foreclosures and these houses to be put back on the market, which ran down housing real estate prices. Also, lenders were forced to tighten up and require more evidence of ability to pay the loans, which further reduced the housing demand. Soon many people found that the values of their houses were less than the money owed on them, which caused further loan defaults, and further reductions in the value of real estate. It was a snowballing situation. It was also something that was foreseen and foretold, and should have been corrected. Of course it should never have happened in the first place. But the Democrats brought it on, catering to their low income constituents, and the Democrats fought against correcting it. Another important factor was that due to actions of the Democrats, catering to radical environmentalists, preventing the drilling for oil, there was a steep rise in gasoline prices, with gasoline going up in some places to over $4.00 per gallon. This added to inflation of other prices, and we had a recession with inflation. Whenever you have inflation during a recession, there is something wrong with the government. The price of gasoline resulted in large transfers of our wealth from this country to Islamic countries. These causes of our economic problems are explained at length, with evidence and support, in an article on this website, Our 2008 Financial Crisis was Caused by Democrats.[18]

The history of the bank and lending crisis, and resulting inflation in housing prices, goes clear back to the Carter administration and its push for "affordable housing for the poor." The first boondoggles were the building of apartment houses for mainly black tenants. These were terribly trashed and were a complete failure. Later, the ideas developed on having the "poor" be able to buy their own homes. This could have been a good idea had it been handled right. Fannie Mae and Freddie Mac were brought into play. These two quasi-government organizations ended up guaranteeing or owning "about half of the U.S.'s $12 trillion mortgage market." (Try writing out 12 trillion and see what it looks like.) Legal actions were brought against lending institutions that were requiring borrowers to show the financial ability to pay the loans before they were made.

The New York Times had a comprehensive article, in 1999, on the actions of the Clinton Administration in its efforts "to help increase home ownership among minorities and low income consumers." The Department of Housing and Urban Development "proposed that by the year 2001 50% of Fannie Mae's and Freddie Mac's portfolios be made up of loans to low and moderate income borrowers." "The pilot program involved 24 banks and 15 markets." Over three times as many loans went to "black borrowers" with these "subprime" loans than by conventional loans, where borrowers are required to show an ability to repay. The article recognized that with this "significantly more risk" the organizations "may run into trouble in an economic downturn." Home ownership "exploded."

It appears that there was also some serious misbehavior and "book cooking" in both Fannie Mae and Freddy Mac, and the Democrats fought against the efforts of President Bush and others, including in particular, Senator John McCain, for reforms to get their accounting methods straightened out, and to get oversight that would prohibit their reckless loaning of money to people that could not be reasonably expected to repay it. The Democrats fought this at every turn. This "helping the poor" was one of the ways they were buying votes to keep themselves in power. Also, both Fannie Mae and Freddie Mac were "contributing" large sums of money to our congressmen – mostly Democrats.

President George W. Bush was sworn in as our forty-third president in January, 2001. Beginning in 2001, and in every year since, President Bush and members of his cabinet and staff warned Congress of the problems and the wrongful and unlawful actions of Fannie Mae and Freddie Mac, and continually recommended legislation to reform them. The President called for reform legislation 17 times in 2008, alone. Now, Obama and the Democrats presently blame our financial crisis on Bush. Senator McCain said on the Senate floor on May 26, 2006:

I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole. [Emphasis added]

 Due to opposition of the Democrats, the reform was never accomplished. In the 2006 election, the Democrats regained control of the Senate. On January 4, 2007, Senator Christopher Dodd (Dem. Conn.) became Chairman of the Senate Committee on Banking, Housing, and Urban Affairs, knocking out all chances for reform of Fannie Mae and Freddie Mac. Dodd opposed reform – even in 2008, until it became clear that the organizations were hopelessly insolvent. (Read the Wikipedia accounts of the many times Dodd opposed reform of these organizations, and his connections with the failed lending institution, Countrywide Financial, where it was claimed he got favorable loans.)

Of course the officials of Fannie Mae and Freddie Mac, who were milking large sums of money from them, did not want reform. Johnson earned $21 million in just his last year serving as Fannie Mae CEO from 1991 to 1998; Raines earned $90 million in his five years as Fannie Mae CEO, from 1999 to 2004; and Gorelick earned an estimated $26 million serving as vice chair of Fannie Mae from 1998 to 2003.

What did Senator Christopher Dodd, a primary opponent of reform, get? He led the pack in "contributions" from these organizations' PACs and employees, getting a total of $165,400 from 1989 to 2008. Do you really believe that this kind of money is passed out for nothing?  

Two other prominent Democrat leaders who continually resisted reform of Fannie Mae and Freddie Mac were Senator Charles Schumer, member of the Committee on Banking, Housing, and Urban Affairs, and Representative Barney Frank, Chairman of the House Financial Services Committee For the periods from 1989 to 2008, Schumer got $24,250 and Frank got $42,350 from the PACs and employees of these organizations. Both the Senate and the House of representatives reeked of corruption.

Apparently Barack Obama learned his Chicago type politics well. He quickly developed connections with the above named company officials, and in the short time that he was a Senator, he received a total of $126,349 from the same sources. This was the second highest amount received by any Congressman. Obama became a Senator in 2004, and he was a Senator when McCain made his speech on the Senate floor trying to get these organizations reformed. Certainly, he personally bears a considerable responsibility for the failure to reform these organizations, and the resulting economic crisis. As previously stated, all of the above information about the loan problems, and actions of the Democrats is explained in detail, with references to support it, in an article on this website, Our 2008 Financial Crisis was Caused by Democrats.

Obama had close ties to the radical organization, ACORN, which was shown to have been guilty of voting fraud. Just how close was Obama to ACORN? Michelle Malkin reports that he hid an $800,000 contribution to ACORN out of his campaign funds. Barack Obama represented ACORN in lawsuits against Citi Bank. In these lawsuits, ACORN makes a bogus claim of Redlining (denying poor people loans because of their ethnic heritage).[19] Details on Obama's and ACORNS parts in these scandalous affairs are given in the article on this website, under Articles, Obama and ACORN Directly Contributed to Our 2008 Economic Crisis.[20]

Some of the first things that should be done to remedy our economic problems, are to get rid of Fannie Mae and Freddie Mac, and repeal all laws designed to force banks to make bad loans to low income people. Banks are still going broke because of this scandalous misbehavior by our government.

The basic and long term cause of our economic problems is the welfare-state and socialist mentality of the Democrats like our President Obama. It has led to excessive taxation and excessive spending, and the spending of large amounts of money we did not have – increasing our national debt tremendously. Our national debt became so excessive and the actions of Congress so irresponsible, that in 2011 Standard & Poors downgraded the credit rating of the Unites States from AAA for the first time in history.[21] Such socialist type policies are currently catching up with many countries. Obama and the Democrats continually try to blame everything on President George W. Bush. How ridiculous! They should also explain how Bush caused similar problems in the other countries.

In the Albuquerque Journal, October 20, 2011, was an Associated Press article, Greece at Precipice, about the riots, protests and strikes in Greece. Greece has a typical democratic socialist government. Shown in a picture with the article was a raging fire caused by a firebomb used by one of the rioters. Greece is broke, and to get help from other countries it is required to cut back on welfare spending and wages of government employees, and increase taxes. Many do not want their government succor reduced. They want to remain dependent on the income, goods and services produced by others. The problem is that this socialist welfare mentality has made Greece bankrupt, and they want others to bail them out.

The socialist and welfare state policies are putting the governments in economic jeopardy all over Europe – and there are riots and protests everywhere. Britain, France, Italy, and Spain are among them. Wall Street did not cause their problems – socialism and too many people existing on the work and production of others is the cause. Their government run healthcare for all is a large part of it. Investors are worrying about a "global meltdown" of the economy.

The national debt of the United States has increased tremendously in the last thirty years, and the increase has been astronomical under the Obama administration. Below is a chart.[22]

Chart 1: Government Debt 1900-2016

The part of the debt after currently available figures is necessarily estimated. However, we know that the present debt continues and extends into the future, because we are not paying any of it.

Just the interest on our national debt is huge. For the fiscal year 2011, it is over $454 Billion.[23]

Even the liberal CBS News reports that our national debt increased over $4 trillion under President Obama, and his first term has not even ended. It is the largest increase under any president.[24]

A large part of it was due to Obama's healthcare plan he was able to push through with a Democrat controlled congress. His administration has been a total disaster. Even worse, the government continues to print more money. That makes the dollar worth less, and adds to our economic problems.

A Washington Times article, November 3, 2010, Fed buys $900B in bonds to spur growth,[25] states:

But even before the central bank formally announced that it would print money to buy the federal government’s debt, it already had run into heavy criticism from global investors and conservatives at home for its potential to spark inflation by driving down the value of the dollar — a process that is well under way in global markets.

While putting the strength of the dollar at risk, these critics argue that the bond purchases will do very little to spur business investment or aid a collapsed housing market that seems destined to be weighted down with bad debt problems for years to come.

Greg Hunter (Watchdog USA) on April 21, 2010, reported that Fed Chairman Ben Bernanke admitted to printing $1.3 Trillion to buy mortgaged securities.[26] This was prior to the purchase of the $900 Billion of Treasury Bonds. Together, that makes $2 Trillion, just in 2010. No wonder gold prices have been climbing so rapidly. Printing all of this money very substantially decreases the value of a dollar.

The Federal Reserve Bank is a quasi government organization, created and operating under federal law, which is nevertheless a very secrete organization. No one seems to really know how much money it is printing. Chairman Ben Bernanke gives contradictory answers and a lot of double talk about Federal Reserve Notes, which are money or currency, issued by the Federal Reserve Bank. He apparently sometimes tries to hedge and say the FED isn't printing it – it is actually printed by the government printing office on order of the FED. He also tries to say that it doesn't add to the currency circulation because it is being held in the reserves of banks. At other times he has candidly admitted that the Federal Reserve was issuing money to buy bonds.[27] Once the money leaves the Federal Reserve, it is in circulation. Each dollar of the new money makes one more outstanding Federal Reserve Note dollar. Congressman Ron Paul believes that these activities of the FED are unconstitutional, and that it should be done away with. Ron Paul is also opposed to the secrecy of the Federal Reserve Bank, and has introduced a bill to provide transparency of its operations. He wrote a Washington Times article, June 22, 2011, on this problem, Time to End Federal Reserve Secrecy.[28] After spending considerable time in research, I have never been able find any official records of the issues of Federal Reserve Notes (our currency). The Federal Reserve either ought to be eliminated, or brought under control, and complete public records that are available to the public should be kept of the currency it issues.

In one respect, the FED printing money is like a stock split. The total stock of the corporation is not worth more, there are just more shares. But there is a big difference. For example, in a two-to-one stock split, each shareholder has twice the number of shares he had before. But when new money is printed, the people who already have money are not given any more. What they have is just worth less.

This printing of our currency (Federal Reserve Notes), to do such things as buy bonds, devalues the dollar by the proportion this huge sum is of our outstanding currency, and increases inflation so that our dollar is worth less, because of that action. This together with continued excessive government spending, and the action of the labor unions that drive up prices, hurts everyone in the country. It is particularly destructive to older people and retired people that have built up their savings prior to the latest rounds of inflation, and see their money worth much less than what they expected to have for their old age.

We need to cut our spending, at both the state and federal level, balance the federal budget, and start paying down our national debt. We should live within our means, and not saddle our descendants with a huge national debt.

We should begin with our healthcare system. The entire Obamacare laws should be repealed. They are probably unconstitutional, anyway. Under this plan the government would micromanage the hospitals and care givers in this country from their record keeping to their costs, and the kind of care they give. Some of it would even regulate drug companies.

We need some healthcare reform, and a safety net for those who cannot provide medical care for themselves. Perhaps it would be better for such things to be run by states, who are better acquainted with their particular problems, and closer to the people requiring the services. It is not wise or economical to give free healthcare to everyone. I think that the best and most economical healthcare system is one where healthcare and the providers are not controlled by the government. Competition encourages better care and less expensive care. All people who have any income from any source should have to pay enough when they go to a doctor or a hospital that they would be discouraged from seeking unneeded medical care, and would be interested in holding down costs. It may also be a good idea for each person, or their employer, to contribute some money toward any healthcare plan they may get. It would encourage them to seek healthcare plans that supply the best care for the least cost. We have many good competitive private healthcare plans in America, today. Some are in the form of Medicare supplement plans for people on Social Security and Medicare, and others are various plans used by employers, and plans such as Blue Cross plans that anyone can purchase. Competition between healthcare providers lowers the costs and works toward giving people better healthcare for their money. States and private health care providers should be allowed to purchase drugs at the best price possible, even from sources in other countries, and certainly there should be no restrictions on out of state purchases, as there are today.

We should reform our tort laws, particularly in regard to medical malpractice. A large part of our healthcare costs are due to frivolous lawsuits; and excessive damages, including excessive punitive damages, awarded in valid lawsuits. The trial lawyers' organizations have long been successful in prohibiting meaningful tort reform through Democrats they support, including President Obama.

Everyone in this country now who is badly in need of health care is getting it – even illegal emigrants who are clogging the emergency rooms in our hospitals. Medical care given illegals is a large expense that we should not be incurring. More ideas are given in the article on this website, under Articles, Should We or Government Bureaucrats Determine Our Healthcare Needs.[29]

Our Borders should be secured, and illegal immigrants should be sent back to their own country. It could be started by merely deporting illegals who have been picked up by federal or state law enforcement offices, because of suspicion of other crimes. The "anchor baby" situation, where illegals come into this country and have babies here so that they will be citizens of the U. S., should be ended, even if it takes a constitutional amendment. Illegal aliens, put a drain on our unemployment and welfare systems, on our medical care facilities, and on our schools. They run down wages, cause unemployment for citizens, and cause our average national income to be lower.

Labor unions have become a major problem in this country. An employee union can be a good thing if the employer is a private company, and the union does not make excessive demands such as "featherbedding" to create unneeded jobs, and wages that are exorbitant. But unions have been killing a number of businesses that provide their members employment, by demanding excessive wages, and excessive retirement and healthcare benefits. Examples are our U. S. auto manufacturers. Unions have run a lot of our manufacturing and services to other countries where the workers have lower incomes. This hurts the workers in this country and causes unemployment – it hurts everyone.

Democrats pass laws to favor unions, and laws to make contractors for government jobs be union employers, which unreasonably runs up the costs of government born by the people.

There should be no government employee unions with power to bargain for wages or benefits, or strike, like exist in some states and municipalities. Some have forced membership and payment of dues. They use a part of the dues to contribute to Democrats that support them, who are elected as officials that deal with them. Such elected officials do not represent the people – they favor the unions who help them get elected. Salaries and benefits quickly become excessive when compared to the private sector. Government salaries should be determined by law, and those who pass the laws should be fair to both the public and the workers. This does not happen when one side is buying off the lawmakers – no one represents the people. This includes teachers' unions.

Excessive government regulations – particularly environmental regulations – help cause much of our business to go to other countries. They stifle business that remains in the country, and actually eliminate a lot of our business. An example are the regulations that prohibit us from fully using our natural resources, such as coal, oil, and natural gas. Drilling for oil is severely restricted, and so is the building of refineries. This tremendously adds to our gasoline and other fuel prices. This situation should be drastically changed.

The Obama Administration has set out, intentionally, to do things that anyone has to know would harm our economy. An article on this on the Townhall website, October 27, 2011, Global Warming – RIP,[30] states:

... Obama promised to cool the planet and lower the rising seas. Indeed, he campaigned on passing "cap-and-trade" legislation, a radical, costly effort to reduce America's traditional carbon energy use. ...

The theory was that new taxes and greater regulations would make Americans pay more for fossil-fuel energy -- a good thing if it reduced our burning of coal, oil and gas. Obama was not shy in admitting that under his green plans, electricity prices would "necessarily skyrocket." His energy secretary, Steven Chu, at one point had even said, "Somehow we have to figure out how to boost the price of gasoline to the levels in Europe" -- that is, about $8-$10 per gallon. Fairly or not, the warming movement seemed to cast a tiny elite imposing costs on a poorer and supposedly less informed middle class. ...

So what happened to the global warming craze?

Corruption within the climate-change industry explains some of the sudden turnoff. "Climategate" -- the unauthorized 2009 release of private emails from the Climatic Research Unit in the United Kingdom -- revealed that many of the world's top climate scientists were knee-deep in manipulating scientific evidence to support preconceived conclusions and personal agendas. Shrill warnings about everything from melting Himalayan glaciers to shrinking polar bear populations turned out not always to be supported by scientific facts.

Unfortunately, "green" during the last three years has also become synonymous with Solyndra-style crony capitalism. Common-sense ideas like more windmills, solar panels, retrofitted houses and electric cars have all been in the news lately. But the common themes were depressingly similar: few jobs created and little competitively priced energy produced, but plenty of political donors who landed hundreds of millions of dollars in low-interest loans from the government.

The Obama administration continually tries to cram the "Green" manure down our throats – doing extensive damage to the country, and adding greatly to its financial crisis. It appears that there were clearly law violations involved in a scandal where $527 million was loaned to Solyndra, a solar manufacturing company that was in financial trouble when the loan was made, and members of the administration knew it. It promptly went into bankruptcy.[31] It appears that laws were knowingly violated in making the loan to an insolvent company, and in subordinating the rights of the government to cronies of Obama, thereby costing the taxpayers over one-half billion dollars, and this not all of such loans. We cannot even find out what went with the money so quickly. Solyndra officials are claiming the Fifth Amendment to avoid testifying on the matter.[32] The Solyndra deal allowed a billionaire friend of Obama (George Kaiser's foundation) to be paid before the government, in violation of the law.[33]

"Tulsa billionaire George Kaiser, a key Obama backer who raised between $50,000 and $100,000 for the president’s election campaign, is one of Solyndra’s primary investors. Kaiser himself donated $53,500 to Obama’s 2008 election campaign, split between the DSCC and Obama For America. Kaiser also made several visits to the White House and appeared at some White House events next to Obama officials. Campaign finance records show Kaiser and Solyndra executives and board members donated $87,050 total to Obama’s election campaign."[34]  Was this Obama's payoff to Kaiser? This administration reeks of corruption from the top to the bottom.

But cronies of Obama are not prosecuted for their crimes by the Obama Justice Department. Other examples are the voting fraud violations of ACORN, the well documented voter intimidation of the Black Panthers, and involvement of the Justice Department in the selling of firearms to Mexican drug dealers. Erik Holder, Obama's Attorney General, was personally involved in both the sale of firearms to the Mexican Drug dealers and the dismissal of the prosecution of the Black Panthers. "A top-level, career prosecutor with the U.S. Department of Justice, J. Christian Adams, has resigned his post in protest against alleged racially biased enforcement of federal voting rights laws under Obama Attorney General, Eric Holder. The final straw was 'untruthful' testimony given by an Obama political appointee about the merits of the New Black Panther voter intimidation case in Pennsylvania."[35]

I hope that the voters now have enough sense to rid the country of Obama, and of Democrat control of the Senate in the 2012 election. If this corrupt administration remains in power, traditional American values are destined for destruction, and America will deteriorate to nothing more than a third world country 

While we are plagued with a serious financial crisis, we are giving foreign aid to China, a rising competitor to the U. S., both militarily and economically; and to other foreign countries that do not benefit this country in any way. "This year [2011] the requested amount for Russia was $68.7 million. For China, it’s $12.9 million. A whopping $647.7 million has been allocated for Nigeria. Even $20 million is set aside for communist Cuba. Again, these figures are the requested amounts for 2011 – Congress is still trying to figure out how much to spend during the current fiscal year–and they only include aid to be managed by State and US AID. They don’t include money that finds its way into these countries through U.S. regional foreign assistance offices or offices that deal with specific issues like health or agriculture."[36] This waste of money should be stopped.

We should also consider saving some large sums of money by bringing our troops home from foreign countries, wherever possible. For example, I fail to see why we should still keep troops in Germany. It is time that the European countries step up to the plate and start bearing the costs of their own defense from possible threats of foreign powers.

We pay out all kinds of subsidies, from farmers to "green" companies and enterprises, and oil and gas companies. It is time that this waste of money is stopped. It is not just the Democrats that are guilty, although they are the most culpable; Republicans bear a share of the blame. 

Our Social Security and Medicare funds are going broke. Congress should muster the courage to tackle these problems, and it should have been undertaken long ago. One thing that can easily be done is to raise the retirement age for those who are not nearing retirement, and have not built up any substantial rights to such benefits. People live much longer than they did in prior years and, and have the ability to work to a much later age.

The United States tax rates on corporations make no sense, for a number of reasons. Look at the table of rates, below, and try to make some sense out of them.

Corporate Income Tax Rates--2011, 2010, 2009, 2008, 2007, 2006, 2005[37]

Taxable income over     Not over      Tax rate

           $         0        $    50,000        15%
               50,000             75,000        25%
               75,000            100,000        34%
              100,000            335,000        39%
              335,000         10,000,000        34%
           10,000,000         15,000,000        35%
           15,000,000         18,333,333        38%
           18,333,333         ..........        35%

Our top bracket corporate tax rates are higher than any other large industrialized country in the world. Some of the top rates are the following: China, 25%; Russia, 20%; United Kingdom, 28%; Japan, 30%; Canada, 16.5%; Mexico, 30%.[38]

High corporate tax rates help run some of our manufacturing and service industry business overseas. Substantially lowering corporate tax rates, on companies that have their manufacturing and service work done in the United States, could bring a lot of jobs back to American workers. Particularly if done in connection with some needed labor union reform, such as right-to-work laws – that give workers a choice on whether or not they belong to a union, and not forcing non-union members to pay union dues. Another needed reform is insuring that when workers vote on whether or not to have a company union, it is done by secret ballot. All elections in the unions, such as election of officers, should also be done by secret ballot.

Republican presidential candidate, Rick Santorum, has an idea that would help bring jobs back to this country. “One big idea that I've proposed is to cut the corporate tax for all manufacturers from 35 percent to zero,” said Santorum. “You cut the tax rate to zero, you create a real launching pad for exports here in America.” Santorum stressed the need to “revitalize” the nation’s manufacturing base. “We went from about 21 percent of jobs in this country when I was a kid being in manufacturing down to 9. That's -- we lost those jobs overseas. We need to bring them back,” he said.[39] Perhaps it would be more helpful if the zero rates would be limited to companies that have their manufacturing and services done in the United States .

Eliminating corporate income taxes could also work toward lowering income of people in the top brackets. High executive salaries are taxed at high rates. Directors would be encouraged to keep that money in the corporation, where it would not be taxed and could be used for business expansion that would mean more jobs. The same is true of corporate dividends. Ordinary dividends that are not "qualified dividends," are fully taxable. Even qualified dividends are taxed at capital gains rates. Corporations would be encouraged to keep their capital and pay less dividends. Wages paid to workers and executives are fully deductible, and reduce the income on which corporations have to pay income tax under present law. This encourages higher pay for their executives. Using our tax code to bring about desired economic results is called "social engineering." It can be beneficial when used in the right way, such as encouraging business and jobs, by encouraging charitable donations by making them deductible, and by encouraging and helping people buy homes by making the interest on home mortgages deductible. It can also be very detrimental when used to "redistribute" income form the productive to the less productive in our society.

Removing corporate income taxes might have some unexpected consequences. One is that people who operate businesses in the form of Limited Liability companies ( LLB 's), would be encouraged to incorporate, and leave their money in them, so that the income would not be taxed on their individual income tax returns. This could result in considerable tax revenue loss, as would eliminating corporate taxes, and other revenue sources might need to be considered. On the other hand, creating more jobs and business would increase tax revenues, because of the additional income in this country.

Social engineering has made our tax code so complicated that no human can know or remember all of its provisions, and the best of practitioners make errors, as do the best of government agents who work with it. Because of its pitfalls, unfairness, and the monstrous size the code has grown to, several Republican presidential candidates are proposing various kinds of flat taxes. Steve Forbes, former  presidential candidate, business man, and publisher of the well-known business magazine, Forbes, has long advocated a flat tax. It would do away with most of our enormous tax code, and should be simple enough that people could understand. It also could eliminate the filing of income tax returns. All of the work that goes into keeping up with income and estate taxes, and filing of income and estate tax returns, could be put to more productive use.

These are some ideas for people to consider on how to get us out of our economic problems, and increase employment in this country. The welfare-state mentality of Obama, and the Democrats, that has been running this country into the ground, needs to be eliminated from our government. A Democrat president, John F. Kennedy, once said: "Ask not what your country can do for you – ask what you can do for your country." How that has changed! People should learn the issues and vote for people to run our country that have the interest of our whole country at heart, and not just special interest groups. People who "vote for their pocketbook" are putting their selfish interests over the interest of their country. We need to vote for dedicated and competent people who believe in and work toward restoring our traditional American values. An important one of these values is the principle that an able-bodied person should work and earn his own living, and that each should bear his share of the burden of our government, and not depend on others to support him and the government in his behalf.

















[17] See the article on this website, under Articles, Obama Would Have the Supreme Court Redistribute the Wealth in this Country.











[28] .