Ryan affirms that all actuaries at the federal government, that is everyone who’s keeping tabs, are predicting that the U.S. government is headed for bankruptcy. The country has grown at an unsustainable pace and it is now more than ever harder to pay the bills. In order to fulfill the commitments and promises for entitlements like social security benefits, medicare and medicaid that the U.S. government has made, which are only the basics, it would take roughly 53 trillion dollars invested at significantly high treasure rates just to pay for these entitlements. If this is not making you nervous, read the paragraph again.

That’s about half a million dollars per household. What’s the solution to this? The congressional budget office, predicts that in order to have these 53 trillion dollars handy the current tax rate for low income families would have to go up to 25%, while the medium bracket income would need to jump to 66%, and the high bracket to 88%. Obviously this is not a realistic plan that can be implemented at anytime for it would simply destroy the economy and trigger another depression.

Keep in mind that this figure of 53 million dollars is only addressing the three major entitlement listed above, these responsibilities currently consume about 60% of the total fiscal budget. This figure does not take into account the need to maintain the national armed forces.

The U.S. has always run under the legacy that each generation confronts the problems of today so that future generations would be better off, safer and wealthier. Unless there are dramatic adjustments to the current spending and necessary changes are made to the entitlement programs so they more realistically reflect today’s economy, there is no doubt that future generations will have inferior living standards, in which we will have massive tax burdens and individual income deficits.

Congressman Ryan further explains that should the government begin to implement the unproposed solution of taxing at higher rates to pay for these programs, the rate of bankruptcies across the country would begin to increase. Further changes to bankruptcy laws can also be expected, while the entire economy would stagnate and surpass Europe in levels of unemployment.

In 10 years time the worse is still to come as the number of baby boomers are increasing every year, the reality will be that these entitlement programs will simply run dry.

In spite of all these facts, it is now harder than ever to get everyone in government to agree that this is a situation that needs immediate attention. It appears that no one really wants to hear it and no one really seems to know what to do about it. Congressman Ryan and his staff however, have proposed a plan, a road map to reform our current spending and taxing that is believed to have accurate and factual data that can restore solvency on a long term basis. The plan was introduced for legislation as (H.R. 6110).

Souther California is one of the hardest hit regions in the country for personal bankruptcy filings, this is highly credited to the over valuation of real estate property during 2001 through 2005 and the sub-prime loans that funded the majority of these properties. The number of people filing for personal bankruptcy, compared to last year are up 90% for LA county, 125% for Riverside county and a staggering 150% for Orange County.

The state of Colorado has seen a rise of 35% since last year, and again it is home owners with high interest mortgage loans that make up over 60% of the bankruptcy cases.

Things are due to get worse according to economic experts, who predict no relief will be seen until two to three years from now. Because gas prices are gradually increasing each day, the cost of commodities and other consumer products have kept up with the price, adding further strain on the already heavily burdened communities of consumers across the country.

Overall the entire country is currently seeing a rise of 50% since last year. It is expected that by the end of 2008, we will see a total number of over one million personal bankruptcy cases which will continue throughout 2009.

Our economy is susceptible to many different factors, including external factors like the overall world economy. A contributor to the price of oil is none other than China. The country has emerged economically demanding more gas, food and quality of life. The once low waged workers are currently climbing the ladders economically and this new demand is now plugged to the main line of distribution for commodities like oil, wheat, and sugar.

It doesn’t matter how much money exists in any one region, it is the demand for these goods that drives up inflation.

So the economic state of the US, which is already affected by the real estate melt down, can expect to see higher prices for commodities and further escapes from debts through bankruptcy filings. Again no solid plan is in place to overcome this, any plan brought forth by the political parties are nothing more than pandering attempts.

Save what you can and invest in hard assets, paper assets will be worthless soon.

Other financial sectors have been affected by the real estate crash and because the signs are too obvious that we’re in a down fall, for the most part consumers are keeping cautious about overspending.

This pessimistic attitude, which is not at all unjustified, can create a problem for the Fed as it has in the past. When the majority of the population views the economy as a sliding trend to disaster, the feeling can spread quickly across the nation like nerve cells. This forces rate cuts and more attempts to revive the economy by printing billions more of our already devalued green backs.

The federal government’s answer to stimulate the economy by sending out tax rebate checks is one that will prove negative. This is an attempt to raise the spirit and enthusiasm of consumers and get us all back in the habit of spending, but without a solid outlook of an economic turn around, there’s very little chance of this actually working its intent. The stimulus checks will be held on to or used to pay off debt and not much else.

Much of this negative attitude is based on the high prices of energy products like gas and electricity. Gasoline in particular has reached an unseen level and shows no signs of moderating by anyone’s efforts. This takes a major toll in the level of confidence that is expected to be induced by this petty plan of tax rebates.

There are several other metrics in between the real estate market crash and the rising price of oil and energy products that are in full force at debasing this economy. It’s not too far fetched to say that we could be reaching depression like levels of recession. The real estate market is in a sump that it can’t be dug out of for many years to come. The rising prices of fuel and the other ailing elements within this faulty economy are steering us all into this state and no agreeable plans to rescue the economy are yet available.

Stimulus checks? let’s get real.

One of the issues that’s mentioned in this video is our currency. The Dollars has been on its longest steady decline in decades and it shows no signs of stopping. Our currency is based on nothing, and it is losing the trust it once portrayed so well. There are a lot of fallacies in the handling of our money, starting with a common belief and false confidence that our currency is backed by gold. This is simply not true.

Our national debt is not repayable, that check will bounce. This is the message I get from listening to Congressman Ron Paul and it is very unsettling to think about it because it is always growing, yet we continue to print money that’s already completely debased.

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Her sentence basically came to three years of supervised probation, a $1,000 dollar fine and 40 hours of community service. Even though her husband was not involved and knew nothing about the activities of his wife as concluded by an investigation, he was demoted because of his wife’s case.

The thief and the victim were actually friends in this case. The thief used the victim’s bank account to pay bills and other personal expenses. Yet the victim pleaded with authorities to stop them from prosecuting her friend, but because identity theft is a felony, charges were made and court procedures started.

Perhaps it would surprise most everyone that a friend would do this to a friend, but there really is no boundary when it comes to identity theft, it can come at you from any angle. I’m a little more surprised at the demotion of the deputy who was not involved in these actions and I imagine that to be a decision of the local sheriff’s office rather than the court. The fact that the case involves the wife of a high ranking deputy sheriff makes it hard to believe that the deputy did not know about this until too late.

In the short time that I’ve been blogging about bankruptcy and related subjects such as credit, credit repair and identity theft, I’ve discovered a lot of different facts about all these subjects and while reading news and posts from other blogs and it never really ceases to amaze me how wide open our personal information is and how easily it can be taken even by people we know and trust. Read the original article here.

Of the many ways this can happen, in this case it was a bank account number that was taken. Often times it’s a social security number that can be used to apply for credit under your name, and of course there’s always the potential danger of providing information via the internet.

It is suspected that Countrywide, among other lenders, had attempted to modify loan agreements it originally made with borrowers with questionable credit. The company is also under allegations of harassing borrowers who were under bankruptcy protection, threatening to foreclose even after court proceedings had legally arranged a repayment plan.

Violating the automatic stay is a serious liability, I have pointed out in several posts and in the chapter 7 page how the automatic stay becomes your shield when you’re under going bankruptcy proceedings. Lenders will take chances and sometimes, as it is actually the case with many, their automated computer systems take over when payments are not received. However when representatives of the company begin to call you in person, this is no longer considered an automated response by their system. All “humans” within that company should be aware that you’re account is on hold because of your bankruptcy petition.

If this should happen to you, you need to take action by reporting the event to your attorney at once. This is why it is important to have representation. Your attorney would know exactly what to do, should you become a target of collection during your proceedings. Lawsuits for punitive damages are not uncommon and though most lenders won’t take the risk, for some reason others do, and it not only complicates your process but it can add legal costs.

Countrywide admits to having handled some debts erroneously but denies harassing bankruptcy protected borrowers to collect money.

Foreclosures for the lender have risen dramatically causing share values to slide significantly, however I think the biggest burden the company faces at this point is the surplus of homes in the tens of thousands it now owns across the country that it must now unload at severe discounts.

I’m not a doom and gloom kind of guy and I hate to be right when it comes to negative predictions, which I don’t often make. But we don’t revolve around a partially good economy, the housing crisis and sub prime lending mess are already here and they are costing millions everyday in defaulted loans. Bankruptcy cases are climbing and people are losing their homes and ruining their financial lives. I really do wonder what is going to happen with all those homes left behind when there’s no more demand.

So my findings tell me that while many economic experts believe we’re not in a recession, no one is denying that growth has slowed down everywhere and that to me signifies that a recession has started. Officially the National Bureau of Economic Research (NBER) will declare a recession when we’re half way through it. I fail to see the sense in that.

The only growth I seem to have any control over is my savings account and maybe my 401k if I keep up with it and make necessary changes when market conditions begin to move downward. I think we’re all thinking about the same thing right about now, which is “what’s going to happen in the next year?” Will we be in full recession and what will the Fed’s plan be to get us out of it. Will it be another drop in interest rates to encourage borrowing and spending again? I’m dying to know where we’re headed.

Till then all we can do to gain some protection is to adhere to more conservative spending. Only spend on true necessities and stash away the rest of your available cash, looks like it may turn out to be a tough winter. Many people will argue that this is bad for the economy, but does continuing to spend money really extend as something that’s collectively good for all? Do I really need to buy just to buy as long as it’s good for the economy? Seems very unfair to put that responsibility on consumers in a time like this.

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