Warren Warns Of Coming Economic Crisis - But Has A PLAN

All politicians (of both parties) love to complain about what is wrong in our country, and many of them are right. But complaining is not enough. Senator Elizabeth Warren (D-Massachusetts) not only identifies the problems of this country, but has come up with real plans to fix those problems.

She is now warning of a new economic crisis that will soon hit this country. Fortunately, she has a plan to prevent it. Here what she has written:

I’ve spent most of my career studying what’s happening to working families in America. And when I saw the seeds of the 2008 crisis growing, I rang the alarm as loud as I could.

Back then, people with the power to stop the crisis didn’t listen. And when the crisis hit in 2008, working families lost it all while the big banks that broke the economy got a fat taxpayer bailout.

When I look at the economy today, I see a lot to worry about again. 

Here are some of the warning signs I see flashing in our economy:

A generation of stagnant wages and rising costs have forced American families to take on more debt than ever before. The student debt load has more than doubled since the financial crisis, and credit card debt is at another high. Families may be able to afford some of those debt payments now, but a slowdown in income could plunge families over a cliff.

Corporations are also deeply in debt. Leveraged lending — lending to companies that are already seriously in debt — has jumped by 40% since Trump took office. These bets look a lot like the pre-2008 subprime mortgages: poorly-underwritten high-risk loans, with minimal protections. Just like last time, their risk-taking is dangerous for all of us.

Despite Donald Trump’s promises of a manufacturing “renaissance,” the country is now in a manufacturing recession. The manufacturing sector has just gone through a second straight quarter of decline, and for the first time ever, the average hourly wage for manufacturing workers has dropped below the national average.

The country’s economic foundation is fragile. A single shock could bring it all down. And the Trump administration’s reckless behavior is increasing the odds. The administration may hit the debt ceiling in September, leading to economic turmoil that some have compared to the collapse of Lehman Brothers. Trump’s trade war with China also threatens American manufacturing and has already hurt American companies that investors think of as bellwethers.

But the good news is, we can still head off another crisis if we act now. Here’s my plan to put our economy — and our families — on firmer ground:

Reduce household debt. We need to reduce household debt by raising wages and by bringing down working families’ costs.That is the heart of my economic agenda.

We can raise incomes by increasing the minimum wage to $15 an hour, strengthening unions, and ensuring that women of color get the wages they deserve. We can slash household debt by cancelling student loan debt, bringing down the cost of rent, providing universal affordable child care, and making tuition free at public colleges.

Monitor and reduce leveraged corporate lending: In response to the 2008 crisis, Congress created the Financial Stability Oversight Council to monitor risks across that cut across different markets. But right now, Trump-era regulators are falling down on the job. They should focus on the risks posed by highly indebted companies and stop banks from issuing these risky loans in the first place.

Strengthen manufacturing: We need policies that reverse the manufacturing job losses of the past twenty years. My Green Manufacturing Plan will mobilize our industrial base by making a $2 trillion investment in American green research, manufacturing, and exporting over the next decade. This will create more than a million high-quality jobs and help address the existential threat of climate change.

Limit potential shocks to the economy: The Trump Administration should replace the trade-war-by-tweet with China with a coherent strategy — working with our allies — to respond to China’s trade tactics. We need to invest in strengthening critical American industries, instead of undercutting American companies.

Whether it’s this year or next year, the odds of another economic downturn are high — and growing. Congress and regulators should act immediately to tamp down these threats.