I guess not too many of us have money to burn (unless, of course, you are the Lake Worth CRA that burned money last night on the illegal labor center) or the luxury of buying anything that you have wanted. If you have extra money in your pocket, and if you are like me, you usually spend it. We just don’t have much left over to put aside for that rainy day even when times are good. The more that we make, the more we spend. It has been tradition—our culture. There is not much extra money these days and we are spending it on paying the mortgage and buying food, the practical and the necessities. And when we do save, it is a small percentage of our paychecks. A lot of this has to do with the terrible economy as our wealth has just evaporated, and 13.2 trillion dollars of it has been lost, poof, up in smoke. We don’t let money burn a hole in our pocket because we are spending more for less and there does not seem to be much relief in sight. Credit card debt is at a whopping $850 billion with the debt service amounting to about $1,500 a year per person. (See allbusiness.com) Now we get excited when gasoline goes down to $2.53 a gallon.
Obama’s Stimulus was to create jobs. It hasn’t. A lot of financial institutions are hording this cash infusion. Goldman Sachs just announced $3.44 billion earning in the 2nd quarter. Banks are still not lending money and it has been reported that $1 trillion has been put on the sidelines. Banks are building up their reserves because they think there is more doom and gloom coming in the commercial market. This is not what the Stimulus was all about.
So, we have a huge national deficit of over $11 trillion dollars, few jobs, unemployment at an all time high and growing and we sink further. A good solution would be to cut taxes, end payroll taxes, extend unemployment benefits, get money to the small business owner and let the spending begin. If these corporations can not compete domestically or globally, then allow them to fail. If our auto industry produces vehicles that no one wants to buy, let them find their own solution rather than us bailing them out.
Leonardo DeVinci said, “Simplicity is the ultimate sophistication.” Let’s just make everything simple and it might just be the remedy we need. Let’s give it back to the people who will actually spend it—you and me. We are the ones who make the market. The companies just have to give us a product we want to buy at a fair price and if the government gives us the stimulus money, we will find a way of spending it—we always do. Once we are buying, companies will prosper, jobs will come back.
You're right--Perhaps this is just too simplistic.
If Uncle Sam Takes Mortgages and Becomes Landlord – 24/7 Wall Street where I come from this is call communism or fascism and , this is in fact what awaits us here in the land of milk and honey. The government will own everything , that is what happen when the cycle of capitalism ends, it's great at the beginning just most all thing but is suck at the end .
ReplyDeleteWe have nobody to blame but ourselves , we did this not the government, we open the door for this and let them (government) drive the car instead of us driving them like it should be. We are just so greedy, more homes more cars more toys more thing for the wifey poo more things and toys for the children more investments more computer and cell phones more more more . I have little and want less , oh well , the withdrawal from the addiction of consumerism will be nasty.