The economy is heading into a recession. With dour economic news arriving on a weekly basis, every bad jobs report, housing report, missed earnings expectations report, bank failure, state government budget shortfall, terror attack will create instability in the stock market. Until people have a clear understanding of the problem, the stock market will continue to fall.
When will we understand the problem? Until the average investor understands the exposure every large company has with derivatives such as credit default swaps, we will have a shaky economy. I don't know how long it will take, but these are so complex that it could take years.
Government has failed. The long term obligations federal, state and local governments have made during the good years are going to crush the taxpayers to death. When an unemployed, single female Somali refugee with 5 kids can qualify for $36,000 per year for Section 8 housing allowance, $12,000 for medical expenses, $10,000 unemployment insurance, $5,000 free school lunches, $5,000 automobile and insurance credit, and many other programs, the system is broken beyond belief. We can not have a system that pays $68,000 just for living in this country. When we have refugees who lived on $300 per year in their own country, come to our country and cost American taxpayers the equivalent of 20 taxpayers IRS payments, something is wrong.
Until politicians stop calling America the richest country in the world, we will have a recession.
I predict it will take 10 years for us to figure that out.
I will add links to stories of impending collapse of the economy...
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