A few days ago a friend of mine asked me what I would say in an open letter to a group of Independents if they asked me what I thought of the financial reform bill that is currently being considered in Washington. The following is my open letter response to those Independents:

The current financial crisis did not happen because investment companies were dealing in derivative products that no one understood (the simplistic general Democratic explanation), nor was it a result of an abnormal growth in homeownership rates in the United States (the simplistic general Republican explanation). The real reason for our current crisis is that our economic leaders allowed Fannie Mae and Freddie Mac to mismanage mortgage rates and thus mismanage a substantial portion of our “debt economy” for more than twenty-five years.

Gold, the safe haven investment for those wishing to hedge against inflation and debt, has been maligned by some traders as an emotional investment. Outspoken economists David Rosenberg and Peter Schiff have called for $3,000/oz and $5,000/oz (and possibly $10,000/oz) gold, respectively. David Rosenberg here and Peter Schiff here.

During the 15-year period between 1992 and 2007 American homeowners increased the total amount of their housing debt from $2.8 trillion to $10.2 trillion, almost a three-fold increase of $7.4 trillion! This increase in housing debt was greater than the increase of the better known National Debt, which went from $4.1 trillion to $9 trillion during the same time period.

China Watch is brought to you by the belief that the Chinese stand to gain the most out of the global economic recession/depression, and the United States’ subsequent response to the financial crisis and sinking economy.

The most frightening element of this ten-year forecast is that an estimated $5.6 trillion of the debt would be interest expense. Yes, that’s right, interest.

There’s a lot of talk out there about green shoots, economic recovery and stabilization. Most people aren’t predicting giant leaps in GDP anytime soon, but some are predicting modest global GDP growth between 2-4 percent for 2010. As Greece goes bankrupt and looks to its EU compatriots for help, remember they’re not the only nation on the belly up path. And from a United States perspective, here are the numbers you should be hearing on a daily basis, but aren’t. It isn’t just a matter of restoring economic growth and reducing unemployment. Surprise, surprise: debt, unfulfillable promises and easy money have consequences. Unfortunately, we have plenty of all three:

The GOP is back, with a new, yet old, face to lead the party. Zombie Ronald Reagan has been reanimated to assure Americans that Republicans have returned to their core values of fiscal responsibility. Reagan’s 8 years in office resulted in an increase in gross federal debt by 18.5% as a percentage of GDP, but perhaps a mutated rabies virus has changed Reagan’s fiscal intentions. (1)

With an annual $2.2 trillion price tag for health care in America, is it possible for people to stop pointing their finger at insurance companies, doctors and Medicare/Medicaid reimbursement caps for one second, and instead use that finger to pry the bear claw out of his or her respective mouth? People should first focus on the economics of their own unhealthiness.