Here’s the deal. Where exactly are these bailouts going? I think that overall, Washington is missing the point of the matter. We keep bolstering large corporate structures to “provide, provide, provide” with lower interest rates, better loans, and everything.
But the real problem? Before, the problem was half the problem of the lenders by giving out “toxic” loans, and the other half were borrowers that were getting into loans they couldn’t afford or could barely afford. That’s an issue of financial responsibility.
Now the problem has changed. It was complicated before, but it’s even more so now because the effect is shown with the stock market and how corporations are responding. With unemployment at a high and layoff forecasts not getting any better in the short term, the Treasury and the federal government needs to stop a second and take a look at the big picture.
Our president has come out and said that the stimulus will be judged by job creation, but I just don’t see that happening. Technology is one of the movers and shakers of Wall Street and if you view just that category specifically, most large technology corporations are all in a hiring freeze and dropping serious attrition numbers in both last quarter and this quarter. This in turn will start the vicious cycle of having consumers stop “consuming” which will put them in a savings mode and thus break down retail. At this point? A tax credit for homebuyers isn’t going to cut it, nor will tax cuts. Let’s face the awful fact:
You can’t take advantage of the best sale in the world, if you have no money in your wallet.
And that’s the crisis that we Americans face, as do many others globally. A consumer culture meltdown with billions of taxpayer dollars thrown at the wrong areas. Tax cuts don’t work, mainly because to pay taxes? You have to actually be employed and something actually is going into your wallet from the sweat equity. So when House Speaker Pelosi is criticizing the Senate (whom is also pushing tax cuts) on cutting the money to build schools, I have to wonder what exactly the House Speaker is pushing. I mean, it’s a stimulus plan to help Americans back on their feet, not a “build our future” plan. The fact that the Democrats are pushing for these pet projects on this bill just sickens me.
While I’m thinking about it, the Republicans criticizing the current stimulus plan are not out of the hot seat either. Why? Most of these politicians are the same ones from before the White House administration change. Less we forget, the last bailout plan had a bunch of pet projects that didn’t support the so-called “small businesses are being hurt” type defense. No one is paying here, except really the taxpayers that are fearing for their jobs, or cannot find a replacement.
In the end, the solution to the problem is to provide financial stability to consumers. That means job creation, or perhaps grants or funds to help small businesses expand. Until you put money in the wallets of your taxpayers, they can’t pay taxes nor can they stimulate consumerism. And isn’t that what the entire toxic loans were all about? We just need to address the problems in a LIFO perspective and work backwards as each issue is solved. That’s the only way to ever get out of this mess.