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Negative effects of greed
Negative effects of greed
Negative effects of greed
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There is a perfect storm brewing in America that could ultimately destroy our economy, as we know it. The storm envelops four massive financial areas essential for a stable economy including: home foreclosures, bankrupt businesses, double digit unemployment and runaway inflation. These storms have been formulated by greed from the highest government levels, continued down through the corporate level and ultimately joined in collusion by greedy investors and uneducated buyers. All parties hoped to cash in on a skyrocketing real estate market.
The foreclosure crisis in America began with a chain of events that has depreciated home values across our nation and added to an already suffering job market by increasing unemployment levels. Before this dramatic escalation developed, many investors who turned houses for a profit were busy fixing multiple properties. They were buying new construction materials, fixtures and supplies from retailers. They were also employing contractors, and handymen to repair or renovate these homes. As the housing bubble inflated homes beyond their value, many home owners with substantial equity, sold existing homes for large profits, and then hired contractors to build the homes of their dreams. There seemed to be a shortage of workers and homes to keep up with the demand, as new homeowners (mostly first time, sub prime borrowers) flooded the market. Everyone wanted a piece of the American Dream, Americans as well as immigrants.
An influx of immigrants from all over the world kept the buyer’s market flooded for existing starter homes. Unfortunately, a side effect occurred in a job market overwhelmed with cheaper labor competing for existing jobs. This negative effect caused a lot of hard working, higher ...
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...h higher interest penalties, late fees, and other excessive charges has never solved a creditors collection problem
There is no single answer to solving the foreclosure crisis. All these problems must be addressed and resolved. Lenders, as well as the government, should read the writing on the wall and plan ahead by retaining larger numbers of paying customers. Unemployed people cannot pay mortgages or taxes.
Individual, working taxpayers and thriving businesses are the only hope for solving this problem. Reduce taxes, institute a flat tax or a fair tax as a consumption tax, and abolish the IRS. The tax burden cannot be absorbed only by the few, while the many enjoy the benefits. Without income from taxes by all consumers and thriving businesses employing the masses, we are only increasing the debt and feeding the strength of the coming Economic Perfect Storm.
The housing market is very unique as unlike other goods and services, houses have permanence, it is a fixed location good causing the rules of supply and demand to be taken to new extremes. In the case of the Toronto housing market we can view in almost real time the role supply and demand play on he ever increasing house prices, additionally the fundamental economic issue of scarcity is made extremely apparent by the limited size of the city of Toronto.
Through the use of statistics, expert testimony, appeals to emotions, and a few comparisons, Scurlock tries to convey his message saying that because the lending industry’s main concern is maximizing profits, they have made it impossible to not have a credit card and avoid being taken advantage of. He accomplishes his goal of clearly relaying his argument to the audience with the high amount of credible support he provides.
Should the American tax system remain the same, where individuals’ income is taxed based on how much one makes with loopholes and deductions? Should we consider a system that would eliminate progressive income taxes, taxing everyone at an equal rate through the Flat Rate Tax, or should taxes be collected through national consumption of retail goods and the Fair Tax System? Our current system of taxation is a varied percentage rate based on different income brackets. Many say that it violates our constitutional rights through unequal taxation. Multiple deductions, loopholes, special rates, and a complex system of regulations all characterize our Federal Income Tax System, prompting many to question why it is still being used (Peters, 2013).
“The housing market will get worse before it gets better” –James Wilson. The collapse of the United States housing market in in 2008 was one of the most devastating moments for the world economy. The United Sates being arguably the most important and powerful nation in the world really brought everyone down with this event. Canada was very lucky, thanks to good planning and proper preventatives to avoid what happened to the United States. There were many precursor events that occurred that showed a distinct path that led to the collapse of the housing market. People were buying house way out of their range because of low interest rates, the banks seemingly easily giving out massive loans and banks betting against the housing market. There were
II. Implementing a flat tax without significantly increasing the deficit is impossible without shifting the burden from the rich to the middle-class, instead our current progressive tax policy needs to be changed so that it is simpler and does not allow corporations to abuse the tax loopholes.
In “The Big Short”, this movie about the economic collapse of 2008 in America highlights how Americans of all racial backgrounds were hit hard when the housing market collapsed. The film provides a very compelling argument and describes how the market crashed because banks began to give out more unstable loans out to people in order to sell more properties, which eventually led to the housing market to be built upon millions of risky loans. This practice grew until the housing market became too unstable because of all the risky loans and resulted in an economic crash. The housing market collapse led to millions of Americans to lose their homes because of foreclosures and led to massive amount of homelessness and unemployment since the Great
People commonly believe that property values decline when blacks or non-white move into a neighborhood. However, the real reason why property values decline is because of whites moving away and taking their resources with them. White homebuyers fear that property values will decline rapidly when nonwhite residents begin moving into a neighborhood. What they do not take into consideration is that the nonwhite residents may be their socioeconomic equals. Instead, they focus on race—they categorize individuals into socioeconomic classes on the basis of race. When whites or well-intentioned residents move away, businesses and jobs soon follow suit, thus, creating improvised neighborhoods.
The core of this problem is the low standard for minimum wage. Due to resistance put forth by businesses, the government has only enforced wages that produce lifestyles well below the line of poverty. This standard is leaving 9 million Americans living far under 18,850 a year! “Currently, full-time, full-year work at the federal minimum wage of 5.15$ and hour yields an annual income of 10,300$. If the minimum wage had kept pace with inflation since the late 1960s, as it had done in the previous two decades, its current level would be more than 7.50$ and hour, or 15,000$ a year” (The American Pros...
The United States cannot afford to lose the economic gains that come from immigrant labor. The economy would be suffering a greater loss if it weren’t for immigrants and their labor contributions, especially during the 2008 U.S. recession. The U.S. economy would most likely worsen if it weren’t for the strong labor force immigrants have provided this country. Despite the mostly negative views native-born Americans have towards immigrants and the economy, their strong representation in the labor forces continues today. Immigrants aren’t taking “American” jobs, they are taking the jobs that Americans don’t want (Delener & Ventilato, 2008). Immigrants contribute to various aspects of the economy, including brining valuable skills to their jobs, contributing to the cost of living through taxes, and the lacked use of welfare, healthcare, and social security when compared to native-born Americans, showing that the United States cannot afford to lose the contribution immigrants bring into the economy.
In essence, the problem leading to the foreclosure crisis is the recent decrease in people’s ability to make their loan payments due to job loss and lower wages brought on by the economy’s weak state. Rather than throw billions of dollars at big banks in the hope that they find ways to help the homeowners’ loans, the government should attack the problem through the individual. Simply, the government aid being spent in the hopes of stimulating the economy should be funneled toward reducing the balance of home loans to make the monthly payments affordable for the owner. By funneling the government aid directly to the American home owner in need, the economy would greatly benefit as homeowners regain their footing with their budget because the economy and foreclosure are directly related. When one hurts, so does the other; when one prospers, the other does as we...
Credit card debt is one of this nation’s leading internal problems. When credit was first introduced, and up until around the late 1970’s, the standards for getting a credit card were very high. The bar got lowered and lowered to where, eventually, an 18 year-old college student with almost no income and nothing to base a credit score on previously could obtain a credit card (much like myself). The national credit card debt for families residing in the United States alone is in the trillions (Maxed Out). The average American family has around $9,000 in debt, and pays around $1,3000 a year on interest payments (Maxed Out). Many people have the concern today that these interest rates and fees are skyrocketing; and many do not understand why. Most of these people have to try to avoid harassing collecting agents from different agencies, which takes an emotional and psychological toll on them. While a lot of the newly recognized “risky” people (those with a doubted ability to make sufficient payments) are actually older people who have been customers of certain companies for decades, the credit card companies are actually consciously targeting a different, much more vulnerable group of people: college students. James Scurlock produced a documentary called Maxed Out on this growing problem, in which Senator Jack Reed of (Democrat) of Rhode Island emphasizes the targeting of college students in the Consumer Credit Hearings of 2005
Cohen, Y and Zach. T. (1997). The Labor Market status of Immigrants: Effects of the
Morici, Peter. “Forgiving College Debt Won’t Help Students.” CNBC. 14 May 2013. Web. 24 Feb. 2015.
Efforts to confront this issue were initiated by affects of World War II. Before the war, the Great Depression devastated the United States of America causing production of homes to stop. World War II soon followed and the country switched into productions for war, which also caused a halt i...
The housing market crash was a response to a chain of businesses and people who believed that the old laws of banking were no longer important. Banks were no longer required to hold on to mortgages for 30 years which gave them the ability to sell off to other companies, without concern for the mortgage holders. David Harvey, a renowned geographer, warned us of this problem, stating that “labor markets and consumption function more as an outcome of search for financial solutions to the crisis-tendencies of capitalism, rather than the other way around. This would imply that the financial system has achieved a degree of autonomy from real production unprecedented in capitalism’s history, carrying capitalism into an era of equally unprecedented dangers” (Coe, Kelly, and Yeung, 2013)