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Wednesday, October 1, 2008

Financial Melt Down?

I am not an economist, financial planner, broker, accountant or Wall Street guru. In fact, no matter how much I read or hear, my questions and confusion never cease. However, for months I have been analyzing the stock market, the politicians and the laws of the United States and I have arrived at
a conclusion that I have yet to hear anyone else clearly discuss.

I conclude that until recently I lived under an illusion that the US economy was experiencing an economic boom. While everyone was buying expensive homes, cars, clothes, electronics and enjoying vacations, in other words spending, this country's economy slowly drifted closer to the edge. There was no boom. There was no "real cash" fueling and powering the country.

Credit fueled the economy. How many times this week alone have you heard your congressman or senator say "our economy runs on credit"? But credit does not equal cash. So then I must conclude that our economic boom was simply an "Artificial Boom" created and disguised as something wonderful when in fact the notion that if consumers spent more, more of what they didn't have, the economy would therefore grow. Well I guess the economy grew, but grew into what? Based on what? Founded on what?

What happened to making responsible and educated decisions? Where has common decency and respect gone? How about logic and common sense... have they too disappeared?

This bail out plan everyone is clamoring about includes bailing out foreign investors. Think about it. If the bill passes, our government officials will distribute our tax dollars to foreign companies, banks or individuals, who invested their money in the US economy in hopes of making a profit. We would never want to anger our friends, our foreign investors our allies especially when the US owes the world more than we could possibly repay. The United States of America has spent and spent and spent and now the creditors are calling and the country must pay up.

So then what does the United States have of value? Not the dollar, not real estate, not stocks, not banks, not automotive companies, not the airlines...what then? Many manufacturing companies have left the US thanks to cheaper labor and lower taxes abroad. What's left? I have it! We can all just work for the government on the city, state or federal level. The government can take care of us all, redistribute our wealth equally and we could all live happily ever after.

Sorry. I know. I am starting to lose it. But I hope you understand my frustration and concern. I continue searching for someone who speaks English, plain English and could tell me this whole economic mess is not insane. Have I been living in La La land all these years thinking that the US housed some of the most incredibly intelligent and innovative people in the world? Could no one in Washington, Wall Street or Main Street not predict a total collapse if we continued the reckless pursuit of becoming a "Spend, Spend, Spend" nation while creating no back up plan, no plan B or plan C? Did our leaders just not care about the overall welfare of this nation?

As I try to interpret the words of these important looking and important sounding individuals who get up in front of a microphone and speak generalities, all I am really hearing is that if I don't spend profusely and get into debt up to my eyeballs, then the economy will further collapse. Credit means debt and debt means I really do not own what I think I own. I don't have what I think I have. Cash is now King, but Dave Ramsey already knew that and so did those of you who followed him. The next few years may be difficult, but if you saved when everyone and everything was telling you to spend, maybe you'll survive and come out stronger, more experienced and better prepared for next time. Oh yes. I don't doubt there will be a next time.

I found this very interesting video over at From Melissa's Desk. I thought it fit perfectly with my piece.

Read Proposed Bill
Join Dave Ramsey's 3 Steps to Change the Nations Future
Read how your state Representative voted on the Bail Out Bill
Read the Community Reinvestment Act

Email your Senators US Senate
Email your Representatives US House



    Here is a site you might find interesting. This whole issue with money and bail out yadda, yadda, yadda was predicted by some past presidents way before our time.

  2. I was aware of most of what is in the video, but what I don't understand is why McCain is seemingly silent on these issues.


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