2008 was a rough year for many investors, and may be remembered as one of the worst years in history for U.S. financial markets. The Dow Jones, S & P 500, Nasdaq and other major indexes fell as much as 44%. The year closed with the Dow losing just over 33% and foreign markets fared even worse.
The entire financial system has become overlevereged as individuals, corporations, hedge funds and even the U.S. Government has taken on to much debt. As late as March of 2008, Treasury Secretary Paulson made statements about our financial and banking system as being strong, by mid July Paulson and other Government officials were proposing a mere $25 Billion bailout of Freddie Mac and Fannie Mae, only to be followed in Octover by the largest taxpayer bailout in the history of our Nation, to the tune of over $700 Billion.
By November the Treasury had loaned over $1.5 Trillion to U.S. Institutions, as a result world markets panicked as banks stopped lending money to each other. Citigroup, AIG, Goldman Sachs, Lehman Bros and a multitude of other financial institutions world wide faced immediate insolvency. The news agency Bloomberg sued the Treasury in an attempt to find out where all the taxpayer money went, but as of yet there has been no accounting and the Fed so far is remaining tight lipped about what these institutions have done with bailout money.
The FDIC also guaranteed over $139 Billion of debt by GE Capital, one of the most prestigous financial institutions in the Country. Immediately American Express and many other companies filed to convert to bank status to qualify for the funds being handed out by the Government.
All this money will be footed by the U.S. taxpayer, and this bill will have to be paid back. This comes at a time when the first Babyboomer filed for Social Security Benefits in January of 2008. This is the largest, most ill-prepared generation to ever retire and will certainly place additional stresses on the Social Security system to provide benefits.
To many people it is clear that the Federal Government will have to increase taxes or reduce services (or probably both) to meet it's obligations. This increased risk of higher taxes in the near future has resulted in an unprecendented rush of Americans to create a tax free income using tax rule 7702.
The entire financial system has become overlevereged as individuals, corporations, hedge funds and even the U.S. Government has taken on to much debt. As late as March of 2008, Treasury Secretary Paulson made statements about our financial and banking system as being strong, by mid July Paulson and other Government officials were proposing a mere $25 Billion bailout of Freddie Mac and Fannie Mae, only to be followed in Octover by the largest taxpayer bailout in the history of our Nation, to the tune of over $700 Billion.
By November the Treasury had loaned over $1.5 Trillion to U.S. Institutions, as a result world markets panicked as banks stopped lending money to each other. Citigroup, AIG, Goldman Sachs, Lehman Bros and a multitude of other financial institutions world wide faced immediate insolvency. The news agency Bloomberg sued the Treasury in an attempt to find out where all the taxpayer money went, but as of yet there has been no accounting and the Fed so far is remaining tight lipped about what these institutions have done with bailout money.
The FDIC also guaranteed over $139 Billion of debt by GE Capital, one of the most prestigous financial institutions in the Country. Immediately American Express and many other companies filed to convert to bank status to qualify for the funds being handed out by the Government.
All this money will be footed by the U.S. taxpayer, and this bill will have to be paid back. This comes at a time when the first Babyboomer filed for Social Security Benefits in January of 2008. This is the largest, most ill-prepared generation to ever retire and will certainly place additional stresses on the Social Security system to provide benefits.
To many people it is clear that the Federal Government will have to increase taxes or reduce services (or probably both) to meet it's obligations. This increased risk of higher taxes in the near future has resulted in an unprecendented rush of Americans to create a tax free income using tax rule 7702.
U.S. National Debt is currently at post WWII levels, combined with the first of over 70 million Babyboomers filing for Social Security Benefits in January of 2008 many experts believe taxes will increase and services will decrease in order for the Government to meet it's obligations.
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