I really don’t know why this is so hard for so many to understand.
The Government doesn’t make money, it takes money. All the money it spends comes from taxes and that money comes from you and me. I should say, it’s taken from you and me.
When the Government decides to spend enormous amounts of our money on stimulus programs all they are doing is moving resources from one area to another and creating a temporary shallow relief, if it does anything at all. For example, remember cash for clunkers, cash for caulkers, bank bailout, summer of recovery and the latest the housing tax credit. All of which, did no permanent correction or fix to this economy. After this many attempts, what is it going to take for our leadership to understand…..it’s not working, STOP!
Let’s focus on the recent housing tax credit. Did you see the reports the month after it expired, existing housing sales dropped by 27%, in one month! The worse home sales decline on record, since we started keeping records from 1968. In mid August when these terrible numbers came out, we saw reports that asked, “Has the Housing Recovery Stalled?” I got one thing to ask, Seriously?
A stimulus isn’t a recovery. A stimulus is nothing more than a temporary shallow fix so, if in the mean time you aren’t implementing solid economic strategies that instill confidence, fix corruption and allow business and individuals to make as much money as they can, recovery will never happen.
Today we learned the unemployment numbers rose to 9.6%. Let’s get down to brass tax, if people don’t have an income, people can’t keep or buy homes. Folks, unless the Government gets serious about creating jobs, foreclosure will be around for a long time.
How does anyone create a job?
Mr. and Mrs. John Q. Tax Payer need to be confident enough to invest in their communities by opening up a sandwich shop, a bike retailer, a coffee house, a “you fill in the blank”.
Confidence is key to our housing recovery. Business owners need to know what their expenses are and more importantly that they aren’t going up. This Government has got all of us asking, how much for Obama Care, how much for the next bailout, how much does Barney Frank want to spend, don’t forget, Nancy Pelosi wants some to. Who is going to go out, and put their life savings in an environment where the bottom line is hazy at best?
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But seriously. 1.) Be more strict on those who employ illegal immigrants, 2.) Be strict on companies that employ outside the country, and 3.) Provide incentives to businesses to hire permanent employees, and 4.) Cut people OFF unemployment who are milking it (working under the table part time and collecting benefits).
Now, I'm no economist, but these seem like some common sense things that would work...
You yourself have hit on some of the key points of this transformation in progress. It's time we all see what is really happening around us!
And, if you want a quick fix; we have to have another depression; just remove all economic supports and controls, and just let everything fall. Believe it or not, this current economic mess started the day the 1930s depression ended. Just look at the national debt then and now. Also, look at how the annual budget deficits of all levels of government has been continuously growing through every Presidential administration since the end of the depression.
It would take far more time and space than I have presently for me to fully explain here. But ever since the depression, the American economic mess has obviously grown far outside of the U.S. borders. Now, I have to agree with Bille at this point; when the U.S. stopped manufacturing stuff and selling it to other countries, we began a continous downward spiral. Ocassionally, the economy was pumped up by wars, intentional monetary contractions and expansions, and other government and political trickery.
But, for many years, the good times were artificially enjoyed by government borrowing, borrowing, and more borrowing to avoid an American tax rebellion. This year alone, the U.S. government will borrow and spend over 1 Trillion dollars more than it takes in from us in taxes. Now guess who the U.S. government is borrowing much of the money from? Yep! China.
The U.S. is only able to make interest payments on the debt. Now what do you think would happen if China called for full payment of the funds U.S. owes?. Perhaps, China will just foreclose on the United States. Oh! Oh! That would be a declaration of war, because the U.S. ain't got the money. So to keep the bank (oops! I mean China) happy so U.S. citizens can keep the house (oops! I mean the country), the politicians permit corporate america to "send jobs overseas" by employing the Chinese, Japanese, Mexicans, etc. then allowing the products to be shipped into the country for sale to Americans. So, just to wrap this up for now, you can probably imagine what would happen if the U.S. started a "Buy Only American-made Products" campaign and slapped extremely high tariffs on foreign (China) imports, such that prices on imports would be unable to compete in the U.S. market. Yep! China, Japan, North Korea, Mexico, Indonesia, and all the other cheap labor countries would all declare war on the U.S.
Is there a way out of the mess? Yes; but, the U.S. needs to first payoff its foreign debts. And, there are just two sources of unencumbered funds for the payoff: 1) countries that owe the U.S., and 2) U.S. citizens; (say "more taxes, more taxes...") Clearly, all governments Federal, State, and local would have to grossly slash their annual budgets for a long period of time (say "fewer services, fewer services...")
Of course, recognizing that none of the above solutions are probable due to politics and selfishness, we are only left with continuing the vicious cycle in which we are now in... more to come.
For now check out my post on this site entitled "The 50-50 Compromise...."
REG (Real Estate Guy) Fluker, MBA
Mobile: (313) 516-8822
Also the other problem is with all the baby boomers retiring in the near future and the shortage of jobs, there is going to be a shortage of money to pay social security and retirement benefits to our elder. And we have to keep in mind that thank to medical advancements now people live longer and needs more medical benefits, and it is just right to take care of them and give them dignity in the old age.