RE: RE: RE: Thanks Bill, Barney & Sub PrimeCurtis, you need to be corrected.
Most of current debt was incurred by the previous Bush government. Obama came in with a huge structural deficit with real estate, banking, and Wall Street in dire straights. TARP was necessary to keep the banks alive. Look what happened when Lehman Brothers was allowed to go. Fanny and Freddy were bailed out, likely because the US real estate market would have tanked by another chunk, likely about 40%. The US, AND THE WORLD was heading towards a total depression. Adding liquidity to the market, by TARP and the other bailouts, added a safety net. If you will recall, all of this started in late September 2008. In October, the market began their free fall.
By the time Democrats were elected, the markets were already in free fall. The US unemployment rate was already skyrocketing. The liquidity more or less, prevented the jobless rate from heading to 20%. Banks were not loaning money because the banks were illiquid.
The US is only now beginning to reduce the jobless rate. The banks are recovering. The US loan loss provisions at the banks are decreasing. It will be a slow process.
Canada, in the early 1990's had a jobless rate over 9%. Our debt levels was over 70% of GDP, where the US is now. We had to undergo a lot of pain to get it under control. Pensions were not touched except for reduced indexing. Interest rates were high, mortgage rates were 10%. A value added tax was already in place, set at 7%. Our top federal tax rate was already at 45% and the provincial taxes were as high as 64% of the federal tax. Now, our top federal tax rate is 29%, and the Ontario tax rate ranges from a low of 5% of Federal tax to 11%. Our debt level, was 25% of the GDP (now 32% after a few years of deficits) In about 4 years, we will be back at balanced budgets, at least that is the plan.