So the President is going to save the Economy (again)?...
Chief Economists are now saying that we are most likely heading into (not towards) a recession. I suppose just about any American family could have seen this coming a long time ago. This report comes just days after the Fed announces that home foreclosures are at a record high in this country. Besides that, and to make matters worse...the latest reports show that 60 percent of Americans are over extended on their credit cards.
Over the past several years some have said that inflation was on the rise and that sooner or later it would lead to a recession. It has been our observation that the government and our president (aren't they one in the same anyways?) has given the same answer when this issue has been brought forth. That answer being; that spending has increased and more homes are being built, so there is not a problem. Alright, so why is gasoline, bread and milk double to triple the price it was 4 to 5 years ago? you know, the day to day things that we need to survive.
But let's look at the situations that our elected leadership has provided answers for:
Of coarse spending has increased, it has to because prices are going up. If you take the stance that the increased spending is for durable goods (electronics, cars, etc) and not just inflated prices, that is also true. But...the money being spent is for items that are from foreign owned companies. Only 4 percent of American owned companies showed a growth last year.
And yes, homes have been springing up all over the land at record levels. The government will lend money to build homes under almost any circumstances because homes are an investment in the American dream and more importantly the mortgage payments made are the life's blood of the banks that support this nation.
So what is our Presidents plan ?...
The very same plan he used to gain the hearts of the public in 2001. Americans are going to get another check in the mail from the government. This as he says will be the "shot in the arm" the country needs. Remember that last check you got? it was supposed to be 500 to 800 dollars, and ended up being 300 to 500 dollars. Well, Economists say that it will most likely be the same thing again except the range is 300 dollars to 1200 dollars this time.
Also, the last rebate deal in 2001 was actually "up front" money. It was a portion of your projected refund over the next couple of years being given to you at that time. Basicly borrowing money from yourself. Remember now, it is seven years later than the first "shot in the arm" and the money amount will almost be the same.
The cutting point: This to little to late. A mere 500 or even 1200 dollars will not do anything for a home that is being repossessed when the average house payment is 800 to 1200 dollars a month. This money will not even allow the average family living from paycheck to paycheck to invest in American stock or bonds as the government tells us will happen. The true state of the economy should have been looked at and dealt with years ago (about the time of the start of the war).
All this will do is let a family go out and buy some extra groceries or some new shoes (made by a foreign company) for the kids. Why?...because the average family has done without for too long and the kids need new shoes and the price of a gallon of milk has just gone up again.
