Election Issues Today

I hate to say it, but millions of Americans are frantically reading their newspapers and surfing the web to learn about the economic stimulus package and WHY?……TRYING TO FIND OUT HOW MUCH THEY ARE GONNA GET?!

What do you think a 70-year-old social security recipient is going to do with a one-time $250 government handout?  Perhaps stuff it into a coffee can against even more diffucult days to come, or use it to pay next month’s electrical and gas bill.  ONE government handout equals one utility bill. It’s useless; the value is purely symbolic: to ensure that everyone gets something while banks and the auto industry receive billions. 

Extending unemployment benefits and increasing the payments by $25 a week amounts to perhaps $7,000 in free COUCH MONEY over just SIX MONTHS!  Explain that to grandma who is gonna get one $250 payment. (That’s also the amount she would get if grandpa just dies.)  

The housing incentive program that will provide a tax credit of $8,000 to first-time homebuyers this year….even though the credit is going to be gratis–no repayment required, is USELESS to a person who doesn’t have a job.  In fact, even with A job, meaning ONE job, many couples are not able to come up with the minimum three percent….unless they borrow.  And ONE crappy job isn’t going to pay enough to make house payments, insurance, utilities, etc., for even a medium-sized home.   

Yes, there is a glut of homes on the market right now–standing empty.  Many of the former residents are now doubled up with parents or offspring.  There are no buyers because there are so very few jobs that are not in jeopardy.  

The stimulus plans must generate DEMAND for goods and services.  As I have said before, DEMAND precedes SUPPLY.  If there is no demand, then there is no incentive to increase the supply of goods.  I’ve noticed how low the inventories are in big box stores.  Merchandise is being moved to the front of the shelf to conceal the empty shelf space behind it.   

Besides having a job and a few dollars in their pockets, people have to have some sense of security and stability before they will be ready to start spending.  We are a long way from that day.   

“Be prepared to endure difficult days ahead,” are about the only words we hear from economists and others who discuss the coming months for the World’s economies.   

The U.S. government cannot save the World’s economies.  Big corporations and small businessmen alike, whether European, Asian, American, Australian, African or South American, must begin to take some chances, to gamble a little, not hunker down and merely try to conserve and protect what they have. They can’t just “wait this out.”  That is a formula for disaster.