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Originally Posted by Stormieweather
Anyone able to clearly describe this (economic crisis origins), in terms a 12yr old can understand?
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People at the highest levels of the business and government played money games so that real estate, companies, investment paper (ie bonds), etc were all declared as worth more. These vampires then took massive rewards while using those mythical values to justify their incomes and to create a ponzi scheme. A ponzi scheme can be explained to a kid by example.
The ponzi scheme has collapsed. Now America needs money to keep going and pay outstanding bills (including those for "Mission Accomplished"). No money today means jobs are lost up to four years later. America must sell things to foreigners for money – desperate to pay off personal and government credit cards. But the world no longer trusts these American businessmen who claimed everything was great. Foreigners need to see houes and companies decrease in value maybe up to 50% before they will buy. Government must buy up homes, companies, and investment paper. Then sell it to the world in a desperate attempt to find money. If government will not sell them, then foreigners will not trust who is selling them. America is now so short of actual money. We must sell things cheap.
Yes, it does get more complex. A ponzi scheme (using Enron accounting standards and CA energy crisis myths), that openly encouraged this past eight year party, has collapsed. Suddenly there is a shortage of money everywhere - and, worse, a shortage of trust in American businessmen. So government is also printing money. They will not admit it. Otherwise you might realize that massive inflation or stagflation is looming. Years later, prices for everything increase and adults lose jobs.
Today the Fed said it has unlimited funds. For adults, the Fed and Treasury will pump money into the economy that is does not really have and as if more money will create productive economic activity. Well yes. Jobs will be saved today. Then four years later, economic forces again take revenge for all that 'free' money. Americans will see a lower standard of living imposed either by 1) increased inflation (even though George Jr says there is not inflation), or 2) selling off American real estate and companies (meaning foreigners reap the profits), or 3) massive more government debt like we have not yet seen (meaning American will be paying higher interest payments to the world), or a dropping dollar (means less products for sale in America, higher gasoline prices, and increases in things such as grocery prices).
Bottom line - the American standards of living will be punished for a party we gave to the rich. Did you enjoy the party as your income dropped two percent during that period? Those who profited kept telling us how much better we were and how much lower our taxes were. Those were the best times.
A child must first learn how a ponzi scheme works. Only then can a child appreciate why so many adults these past years have been lying to themselves saying, "The fundamentals of this economy are sound". An economy always looks sound during a ponzi scheme. Debts of those fundamentals will now be paid mostly by those who are not so rich. Good thing your Federal income taxes were 20% lower these past six years. Oh? Your taxes did not go down? How could this be. The same people that said the economy is sound also said your taxes were lower. They would lie? What else were they saying while running a Ponzi scheme? They must have been telling the truth. After all, we reelected them?