Frankly, I think the U.S. needed to see a stronger, stead-fast hand by the Federal Government and a pro-active approach by the government in spending. I’m uncertain of what is happening and where we might go with what steps have been taken. Inflation is something that is bringing fear to investors, Unemployment seems to be rising which might indicate a reduction in production, and Consumption falls, then we are in for a very scary roller coaster ride.
Last week Federal Reserve Chairman Ben Bernanke acknowledged that even dramatic Fed interest rate cuts and a huge tax rebate program are not getting the economy back on track — and are not helping homeowners keep their homes. In fact, all these measures are just destroying the value of the U.S. dollar as the world recognizes we will continue to borrow.
Even staunch “free-market solution” advocates are coming to recognize that the cost to our society of these foreclosures and bankruptcies could be worse than the cost of some sort of rescue plan, backed by the government, to stem the mortgage credit disaster.
Today we heard reports that the Consumer Price Index (CPI) was unchanged and many of the streets top dogs are wondering whether to take that as a good sign or just read past it and move on with life.
If you ask me, I was one to think that the report would show signs of inflation, especially with what we can see in our own lives, grocery prices going up; oil prices a well, etc. Everything fundamental about our economy seems points to a decline in the dollar. Take into consideration the rising prices of commodities like gold! In the late 1970’s there was an increase in commodities due to the fear of increased inflation.
However, the important question is… What can the government or Federal Reserve do about this?
Even though we hear about possible legislation and even a federal interest rate cut that might take place again next week when the Fed meets up again in an attempt to try and make this recession a little less unpleasant for us all…awww. Give me a break! What we need is a good spank in the hand! Americans need to know that they should not play with their credit they way they have!
What the Depression did to folks in the thirties was, if anything, show them that saving is important and being thrifty is a neat way to have moolah when you really need it! As that generation of folks decreases we start to see big spenders and high rollers that inherited some moolah from their folks! Remember, they weren’t wealthy because they had tons of tricks in their pocket but rather because they knew about the value of saving and being thrifty.
If you want to gain wealth even in an economy like today, read my article “Reaching Financial Freedom In Today’s Economy.”
However, the question remains, what can they do to help us? Well, here are my suggestions:
1. 1. Have the government and state gain a little more insight and provision on mortgage lenders.
a. The government should provide a monetary package to allow state and even government institution to purchase loans and create new terms with the homeowners (Lenders lose money on the mortgages and instead take in possible treasury bonds).
b. As in 1993, the government could have a corporation like the Home Owner’s Loan Corporation doing the same thing as in option a.
2. The government has already taken the Keynesian economic approach.
2. Creating a stimulus package that that has been given to the people in order to stimulate consumer spending.
Honestly, I think they took this approach because it is the quickest way to try and boost the economy. If they would have done the smart thing for the long term they would have provided more jobs and work by creating more government spending as oppose to giving the money to consumers and having part or most of the moolah going abroad due to purchases of imported goods. We have yet to see the affect of such approach as it has been delayed a bit. Let us hope we see something good come of all this. I have hoped we might have seen it sooner.
In any case, I will continue to update this if I find or think up a way that might help out the economy. Frankly, I think the U.S. needed to see a stronger, stead-fast hand by the Federal Government and a pro-active approach by the government in spending. I’m uncertain of what is happening and where we might go with what steps have been taken. Inflation is something that is bringing fear to investors, Unemployment seems to be rising which might indicate a reduction in production, and Consumption falls, then we are in for a very scary rollercoaster ride. What do ya’ll think?
Respectfully,
Tony Tovar
P.S. I would love to hear a bit of what you guys think of all this!
Recession is the best Medicine
Update: 3/20/08′
It seems as though the economy is making a turn for the good. The aggressive step in of the Fed has definitely given many a new sign of hope and opportunity. I for one am glad if this rise in stocks and fall in commodities continues. These are still tough times none the less and you should all be keeping an eye open for anything that might occur. He though Bear would sink like it did. Its too early to tell if we are out in the clear but boy does relief let you breathe a little better or what? 
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