Friday, February 06, 2009
OUR SILENCE WILL BE DEVASTATING
Sorry I have been so silent lately. You may get an earfull today to try to make up for it. I regret my recent silence; now is not the time to be silent.
This economy thing we're in is way more serious than the now-in-development economic stimulus package gives it credit for being. This package, if not changed drastically (and, believe me, it won't be) is going to go down in history as one of the worst things to ever happen to our country.
President Obama is, during one of our toughest times ever, using fear to entirely mortgage or perhaps even give up on, our future in order to push his agenda with massive spending that is not going to have the desired positive economic impact.
The proposed bills from the Senate and House, by all expert analysis and accounts, have very little spending that is really geared toward fast economic stimulus -- something like less than 15% of the 800+ billion.
Do they not realize what kind of money $800 billion is? Do they not realize where much of that will have to come from -- foreign borrowing with massive tax hikes in the future in attempt to repay it? Oh yeah, wait a minute, they probably do understand all of that.
There are also three key things that truly do not seem to even be on their radar screen. They are:
1) Main Street is going to be devastated by this economy. Small and medium sized businesses all over are doing their best to hang in there but huge numbers of them are going to fall in coming months. While large businesses can attempt to survive by shifting numbers and laying people off, smaller businesses do not so much have that as an option. These businesses are just going to close. Look for shuttered businesses to be appearing soon in huge numbers in neighborhoods near you.
2) A huge banking crisis, perhaps even bigger than the mortgage crisis and certainly impacting some of the banks which have been pretty stable of late, will ensue as business loans and lines of credit go bad. And also as mortgages on the homes of Main Street business owners and their workers go bad. I do not know the numbers but this could very well eclipse what we have seen thus far in the banking crisis.
3) We talk about the current rapidly growing unemployment numbers but we also cannot ignore the fact that businesses simply are not and can not hire people right now. We will have a huge number of high school and college graduates hitting the streets in a few months, unable to find work. College loans will go unpaid and social infrastructure will be further stressed. We ain't seen nothin' yet.
Folks, I know this post is ugly. I know I sound pessimistic. I am telling you, though -- this is serious. We cannot support this economic stimulus package and, if you're being silent about it and not squawking to your congresspeople and everyone you run into, you are by your silence supporting something that, mark my words, will be devastating to our country.
$800 billion is a huge amount of money. The piper will have to be paid. We must not go down this road unless we have assurance that every penny will go for rapid economic stimulus.
And, even at that, it is questionable how effective it would be. Read this article on Japan.
This is going to be devastating, folks. Now is not the time to be silent.
This economy thing we're in is way more serious than the now-in-development economic stimulus package gives it credit for being. This package, if not changed drastically (and, believe me, it won't be) is going to go down in history as one of the worst things to ever happen to our country.
President Obama is, during one of our toughest times ever, using fear to entirely mortgage or perhaps even give up on, our future in order to push his agenda with massive spending that is not going to have the desired positive economic impact.
The proposed bills from the Senate and House, by all expert analysis and accounts, have very little spending that is really geared toward fast economic stimulus -- something like less than 15% of the 800+ billion.
Do they not realize what kind of money $800 billion is? Do they not realize where much of that will have to come from -- foreign borrowing with massive tax hikes in the future in attempt to repay it? Oh yeah, wait a minute, they probably do understand all of that.
There are also three key things that truly do not seem to even be on their radar screen. They are:
1) Main Street is going to be devastated by this economy. Small and medium sized businesses all over are doing their best to hang in there but huge numbers of them are going to fall in coming months. While large businesses can attempt to survive by shifting numbers and laying people off, smaller businesses do not so much have that as an option. These businesses are just going to close. Look for shuttered businesses to be appearing soon in huge numbers in neighborhoods near you.
2) A huge banking crisis, perhaps even bigger than the mortgage crisis and certainly impacting some of the banks which have been pretty stable of late, will ensue as business loans and lines of credit go bad. And also as mortgages on the homes of Main Street business owners and their workers go bad. I do not know the numbers but this could very well eclipse what we have seen thus far in the banking crisis.
3) We talk about the current rapidly growing unemployment numbers but we also cannot ignore the fact that businesses simply are not and can not hire people right now. We will have a huge number of high school and college graduates hitting the streets in a few months, unable to find work. College loans will go unpaid and social infrastructure will be further stressed. We ain't seen nothin' yet.
Folks, I know this post is ugly. I know I sound pessimistic. I am telling you, though -- this is serious. We cannot support this economic stimulus package and, if you're being silent about it and not squawking to your congresspeople and everyone you run into, you are by your silence supporting something that, mark my words, will be devastating to our country.
$800 billion is a huge amount of money. The piper will have to be paid. We must not go down this road unless we have assurance that every penny will go for rapid economic stimulus.
And, even at that, it is questionable how effective it would be. Read this article on Japan.
This is going to be devastating, folks. Now is not the time to be silent.
Name:
2 Comments:
Hey Todd,
A few thoughts on the stimulus. The article on Japan seems to be calling into question the effectiveness of rapid economic stimulus, doesn't it? I don't think rapid stimulus and long-term effectiveness are completely exclusive, but it seems that they are at least in tension with each other. It seems more complicated than too just throw money at whatever works the fastest.
Do you think we can effectively do both fast and long-term? The energy spending seems to be especially geared towards that end. Would you argue that if we don't favor rapid stimulus over long-term then the recession will take too long to climb out of and be more detrimental in the long run?
Lately I'm learning about the skyrocketing federal debt and am slightly concerned that if we don't worry about the long-term now, the hole's going to be too deep to climb out of later. Maybe the lack of rapid stimulus is at least partially strategic (and not just political). What do you think? I really don't have answers one way or the other, just lots of questions.
All that said, I am also really concerned about the size of the stimulus package. I saw Obama's remarks yesterday to the House Democrats and was concerned he now seems to be forcing the bill through--flexing a little Presidential muscle. At this point I agree with Senate Republicans, I'd much rather take a few weeks and get a good bill than push through a bad one.
Thanks Michael. I will respond more later but I think the Senate needs to band together and hold this thing back a little bit in order to get it better figured out. In light of the president's stance, this is going to make the Senate look like bad guys but I hope that they have the backbone to do it. He is trying to flex his muscle and he really wants a conferenced bill by President's Day.
The media we hear, which is also primarily where I think congress folks get their info, is not talking much about the looming impact on Main Street nor what happens to unemployment when this year's graduates start to enter the market. There is a clear implication by watching media that the banking crisis is at or very near its worst.
I am convinced that is not the case ... things are likely headed to much worse levels as the banking crisis is going to spread way beyond mortgages.
I am also concerned we're digging a hole we will not be able to get out of.
I would be for one of two things --My preference is short term stimulus with a goal to have a long term plan in place by year end ... or else just let things flow and not do anything. I think the latter is probably not a good idea but it is less irresponsible than a huge plan right now that does indeed have more of a long term focus, as well as a lot of junk in my opinion, until we better see how this thing is going to progress.
Should we see deflation start to kick in, then we have a whole different situation on our hands that will be very difficult to figure out though rest assured it will require money ... but yet with the act as it now stands, we ain't gonna have access to any money for a long long time.
Okay, I guess I said all I have to say now after all.
Thanks for your wise thoughts!
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