Sunday, July 31, 2011

July 31, 2011

Dear Kids,

   Americans get into the worse time in the recession and come to the point that the 2 parties in the Government are going to extend the debt ceiling within 24 hours to lose the triple "A" credit rating to the world.  What is the debt ceiling and why they are opposition to each other and the Republican party agrees to default the debt and the Democratic party trying to rising the debt ceiling to remain everything the same.  American had a very bad recession in 1930's after the civil war and the First War war with so many things were happening around the war including the Soviet revolution in 1900's.  China became the National Party by kicing out the Chang Dynasty in 1911 etc. They were suffering and willing to pay the debt to support the American Dream at that time.    When the baby boomers were taking over the administration after the Second World War and most of the people were starting from the scratch and the basic.  People were conservative and hard working.  The dream for the whole world at that time was putting their countries and nation to the number one.  This was no only applying to the USA; also China, Germany, Italy and Japan etc.
   After the Atomic bomb destroying Japan, the whole nation was putting from a destroyed city to a modern city today.  Americans were developing all the weapon and high tech selling to the world such as computer etc.  China and Taiwan were working very hard to competite each other to show one of them is the leader for the Chinese and to the world leader as well.  Germany started to build all the high tech for the nation and ship out to the world market such as automobiles and same as Italy.  There are shortage of everything after the wars.   Therefore, the economy was booming all over and American is the top nation in the world.  The influx immigrants came to USA bring in the cheap labor, capital and technology to this land to build their American Dream since then.
   After the peak of baby boomer is over, the new generation has a lot of things built up for them to enjoy.  Therefore, the new generation become a little bit lazy than before for example, in the olden days, most of the people were taking bus or public transit to work or school because cars were one of the luxury item in the daily life and average family was about 5 to 10 kids after the war due to shortage of people.  The new generation doesn't work hard as the baby boomer because the baby boomers need to build from the basic.  Without that they will suffering everything due to the provity and lack of the high university education to provide the knowledge to proceed further level.
    After Clinton's administration, he saved a lot of capital for USA because he came from a poor family.  During his administration, the nation was happy because there was a big surplus for the Government budget.  Most of the people had a few jobs and everything was booming.  However, when Bush took over the administration, he spent money like crazy by giving back the tax money to people so that poor people were very happy after receiving 500 per family and Bush never thought about to save the money in the rainy days.  Bush had also financed the 2 wars by increasing the debt ceiling and hoping they would gain the benefit of the Middle East Oil market to compensate the debt with the revenue in the future.  The results of the two wars were opposite what he had expected.  On the other hand, he tried to bust the economy by using the real estate market by introducing the sub-prime mortgage to the local people.  It means that he tried to let the banks to lend the money to the people who did not qualify for the loan and ending up most of the properties sold to the unqualified buyers were defaulting to the all the bank loans.  This policy was causing the Wall Street Financial losing the credit by selling all the Real Estate Bond to the whole world and Leman Brother was one of them.  During his administration, it costs the American people responsible for the national debt 10 trillion.  Now that the US President trying to cut all the benefit to offset the debt and he can't predict the revenue by raising the debt ceiling.  What is the debt ceiling? It means to raise the credit card to the higher credit limit to pay the debt.  The Republican party was questioning the President where the money coming from to pay the bill and the President was telling the Republican party that raising the tax to the rich.  Since the Republican party is a rich party and they opposite this proposal until today.  The last meeting they agreed that they are not cutting the benefit and no tax increasing with the debt ceiling increased.  The revenue to pay the debt will be another story after resolving the debt ceiling issues.  The most important things what the President needs to do is to increase the jobs for the people so that people can pay the tax and people can pay the bills instead of collecting the social security benefits. We all hope they can resolve it before the deadline, Tuesday this week.
    As a conclusion, the cash flow is very important to individual and a country so you need to be alert looking around for the other sources of income in case the one you have gotten the problem.


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