We now have a full year ahead of us.  This means that we have 12 months to create a more realistic plan for our immediate and long-term future.  We must learn from the mistakes we have made in the past.  Americans in general are operating at 130% debt to income ratio.  Is that realistic?  We spent $700 billion on fast food in the 6 years leading up to this nationwide financial debacle.  Does that make sense?  We transferred the use of crops from food to fuel.  Is that a wise idea?  We are quickly exhausting our natural resources.  What will we do when they are gone?  This type of unrealistic thinking has not only gotten us into trouble, but is also keeping us in and deepening these dire straits we are experiencing. 

There are thousands of Americans experiencing severe financial distress.  We can see how we got to this stage; however, even our most intelligent minds cannot seem to see a rational way out of it.  For example, let’s consider for a moment Obama’s new stimulus plan.  His plan, of course, rests heavily on top of the first bailout plan of $700 billion.  We can, at least initially, use this as an example of how we have started to show some limited foresight.  With Bush’s bailout, we accomplished very little, although we have only spent about half of the money so far.  The credit situation has certainly not been alleviated.  So, seizing on that information, and wanting to make a splash with a strong move as he comes into office, Obama wrote policy into his stimulus package that seeks to correct the economy by adding more jobs.  One could argue that he is simply following Roosevelt’s lead by instituting changes similar to The New Deal.  And by well he should, as our country grew exponentially after the changes brought about by the Depression. 

The creation of jobs by improving our infrastructure is a wise move.  Seeking alternate means of energy makes sense.  Both of these policies have been quite delayed, but at least there is now hope they will actually occur.  However, the third part of Obama’s plan makes no sense at all.  Saying so is probably not what the general American public would want to hear.  Nevertheless, tax cuts for individuals and businesses are probably not going to have tangible effects other than increasing Obama’s popularity.  For most Americans, a few hundred dollar tax cut is not going to mean anything except that another bill gets paid.  In order for the money to be used to boost the economy, we need consumers to use the money on consumables- televisions, automobiles, snow-blowers, and virtually anything sold at the retail level.  Try asking someone in Nassau County who is considering Chapter 7 Bankruptcy to spend their money on a new flat screen T.V.  This is laughable.  People are going to use the money to pay the bills they are already or nearly behind on.  It is going to go to mortgage payments, utility payments, loans, other bills, and possibly groceries and gasoline.  If Americans use the money for these items, as they have in the past when given stimulus checks, then the purpose of providing those funds in the first place are null and void. 

But above all else, let us not forget who is going to pay for all of this- the same people getting the “stimulus” checks.  We’ll all be made to suffer when taxes increase in order to fund these congressional bills.  Talk about robbing Peter to pay Paul.  Is the fleecing of America beginning all over again?    

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This entry was posted on Thursday, January 22nd, 2009 at 7:00 am and is filed under Economy & Politics, Financial Market. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.